People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 13

April 05, 2009


CITU Flays Central Labour Ministry’s Criminal Inaction

Ardhendu Dakshi

THE crisis has descended on the Indian economy in the last few months, and is causing serious effects on the working class all over India, covering almost all industries. Everyday news are pouring in from all corners that thousands, if not lakhs, of workers are losing their jobs, many more have to accept lower wages under duress, and total uncertainty is prevailing in some other sectors as thousands of industrial units are out of commission. The government is sitting silently, however, just watching the calamity that has come down on the workers and their families.

The great pundits of economics who were so long propagating the virtues of globalisation, market economy, liberalisation, privatisation and so on, are still there but they refuse to accept that their theories have miserably failed and that the New (sic!) Economic Policy has brought tremendous misery to the workers, peasants and other common people at the end of the day. Those worthies do not have the guts to accept their mistakes and failures. They are analysing with all their great store of knowledge as to what and why it went wrong in their heaven, the United States of America. The government of India did take no steps other than bailing out big corporate and some financial institutions just to save the share market. The central government and its labour ministry have not uttered a word or taken a single step to come in support of the workers who have run into dark days of job-loss and starvation.



The CITU has all along warned the government about the fallout of the slowdown and wrote a number of letters, made several representations and organised a massive demonstration in New Delhi on January 20 last to highlight the problems facing the workers. The biggest demonstration of helpless suffering workers was held just under the nose of the union labour ministry. The ministry did not react.

The CITU was prompt enough to highlight the problems of the workers in the context of the looming crisis in the economy as early as in October 2008. With slightest sign of economic slowdown, the employers, big and small, started throwing workers out of job and/or cutting down their wages. The employers sent a clear message that in the event of economic crisis the workers only will have to pay the cost to save the capital and capitalists. Obviously, there was a furore and the situation prevailing among the entire working class was of anger. In that situation, the prime minister had a meeting with the big industrialists and corporate bosses, and requested them not to make any “knee jerk reaction” and to avoid throwing out workers out of job. It was only a soft and benign advice that nobody bothered to follow. Rather, retrenchment and wage cuts intensified across the board thereafter.

CITU president M K Pandhe wrote letters to the prime minister urging him that the trade unions must be consulted to ward off the dangers of retrenchment unemployment and wage depression. He complained that the PM did always discuss the workers’ problems with the industrialists and corporate bosses but not with the trade unions which he promised long back. Pandhe also wrote a letter to Oscar Fernandez, the labour minister, on October 30, 2008, which read:

I invite your immediate attention to the spectre of alarm and uncertainty looming large over the workers in the country caused by the threats of retrenchment and lay-off by the employers…… the statement by ASSOCHAM about the plan of steel, cement, IT/ITES/BPO, construction, real estate and aviation to curtail their workforce by 25 percent is bound to add further sense of disquiet and apprehension among the workers….. In view of the above, the government should immediately intervene to ensure that the jobs of the workers and their interests are protected before any relief is extended to any industry…. I request you to call immediately a meeting of all the central trade unions for detailed discussions. You will agree that discussions being conducted by the union finance minster only with the corporate leaving aside the labour will be totally counter-productive.”

But the request for IMMEDIATE meeting was responded by the labour ministry after only three and a half months, on February 17, 2009. The invitation letter also, conspicuously, mentioned that a the meeting was being called since M K Pandhe had pointed out that the workers are facing threats of retrenchment, layoff and wage loss. It is a good thing that the concern expressed by Pandhe was recognised but what the whole thing exposes is that the labour ministry remained insensitive to the reports appearing in the media that millions of workers have already lost their jobs.



However, the meeting was indeed held, presided over by the labour minister and attended by senior leaders of central trade unions. Pandhe and Ardhendu Dakshi represented the CITU in the meeting. It was also attended by the secretary (labour), additional and joint secretaries in charge of welfare, social security, and also the director general of ESI, DGET, CPFC, and other senior officials.

The minister asked for suggestions on how to deal with the crisis, but did not specify any step that his ministry was going to take to come to the rescue of the workers. Pandhe was called upon to initiate the discussion as the meeting was called at his instance.

Pandhe severely criticised the ministry for its slow and casual response to the problems that have affected millions of homes. It was silently watching the situation while it was holding parleys with the employers. The LEM was unconcerned to intervene and to ensure that bailout packages took care of the workers and saved their jobs. Even in the United States, the bailout packages have some content that protects the workers’ and employees’ jobs. The labour ministry here has willingly abrogated its role as `labour’ ministry. This is reprehensible.

Pandhe reminded that the National Common Minimum Programme (NCMP) committed to the people that “The UPA government will immediately enact a National Employment Guarantee Act to begin with on asset creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower middle class house hold.” The reality today is that, even after 5 years, there is no National Urban Employment Guarantee Scheme; therefore unemployment among the urban poor and lower middle class is very high and now thousands are losing jobs in the wake of the economic slowdown while the ministry of labour and employment is only watching the situation. Pandhe asserted that the ministry should immediately promulgate and ordinance banning retrenchments, wage cuts, layoff and closures in all sectors and quickly find out ways and means to protect the jobs. The government should provide funds for that.

Pandhe demanded certain immediate steps to help the economy and the workers, such as a ban on import of 1250 items or, at least, control on the imports to help domestic producers and at the same time a bailout package for small and medium size enterprises (SMEs). He wanted that the import of rubber and other items which resulted in crash of domestic prices must be banned or restricted to help the agriculture and plantation sectors.



Pandhe strongly criticised that the employers are pushing for higher productivity and longer hours of work, and when the workers are complying with their demand, the employers are retrenching some workers declaring them surplus. In Gujarat, the diamond industry workers are forced to work for 12 to 16 hours a day. A strict enforcement of 8-hours work per day can save many jobs. This is the situation in many more industries if not universal in the entire unorganised sector. The labour ministry so far has sided with the employers, shirking its responsibility as “labour” ministry.

The most serious offence committed by the government is that the bailout largesse has been given to them who have actually created the present crisis, Pandhe complained. As an example, he cited the case of private airlines who created excess capacity, went all-out for unethical practices in the name of competition and then went bust. The workers have suffered wage cut as also the pilots and now the government is giving them cheap fuel, long credit facility resulting in thousands of crores of rupees unpaid so far. The airlines case is visible to us, but there are many other cases where the employers have created crisis and yet want to be bailed out. This is not acceptable to us.

Pandhe pointed to a National Labour Institute survey has found the IT centres are actually “19th Century Roman Prison Ships.” The workers are totally unprotected, they suffer humiliation and ignominy unthinkable for a modern day educated qualified young person. The employers have been given free hand to exploit their workers.

The most dangerous aspect of the recent scenario is that the bailout or stimulus packages are being awarded to help them get financial stability and, in some cases, retain a profitable level of production. On the ground, when retrenchments, layoffs, wage cuts and closures are going on unabated, the market is continuously shrinking as the standard of living of the middle class downwards is falling. The biggest question remains: Who is going to buy the products? Such bailout packages have failed to stop job losses or income depression.

Pandhe reminded that the situation is going out of hand. Hence the labour ministry must come out with specific steps to ensure protection of jobs, wages and interests of the workers.

Dakshi pointed out that the labour ministry is coming out with figures of job losses, which are ridiculously low. This means that most of the retrenched workers are not even on the roll of the enterprises officially. The real impact of the slowdown is, in absence of data and documentation, not getting reflected in the official documents. He said newspaper reports showed that in some areas 99 percent of the workers are not covered by PF. It is like an egg on the labour ministry’s face.

G Sanjeeva Reddy from the INTUC, H Mahadevan from the AITUC, Ashok Ghose of the UTUC and leaders from the AIUTUC, AICCTU and LPF (DMK) also spoke, giving their suggestions. While supporting the views and the apprehensions expressed by M K Pandhe, they reiterated the demands for strict implementation of labour laws, effective implementation and enlargement of social security benefits, guarantee for jobs for urban poor, ban on lay-of and retrenchment.

All the participants strongly criticised that, in spite of the tall talks about aam aadmi, the UPA government has failed to protect the poor workers who make 94 percent of the entire workforce. The status of compliance of labour laws and social security schemes is miserable to say the least.

The unions demanded immediate action from the government, particularly the labour ministry, to stem the rot and protect the workers, their jobs and their wages.