Bharat Bhushan - Targeting labour laws: On whose behalf do states operate?
In an attempt to keep
corporate profitability afloat during the pandemic, a nightmarish scenario is
emerging for the workers with the suspension of labour
laws. With fewer workers
allowed in factories due to partial lifting of the lockdown, production can be
kept at a profitable level either by extracting more work within the working
day or by extending it. The intensification of labour means for the same pay the
job descriptions are expanded to include more tasks. The extension of the
working day aims at fewer workers producing more by working longer hours. These
changes worsen working conditions and prevent new hiring.
The strategic shift to
extend the working day was initiated by a Gujarat government notification on
April 7 to allow 12 hour shifts, six days a week for three months from April
29. The notification also denied the provisions under the Factories Act of 1948
of paying overtime at double the normal rate for the extra hours. Rajasthan
(April 11), Punjab and Himachal followed suit (both on April 20), but retained
overtime for extra hours of work.
Labour law experts
believe that these states are in violation of the Factories Act which permits
the extension of the working week to a maximum of 60 hours. Moreover, the
denial of overtime payments by the Gujarat government effectively qualifies the
extra hours of work as forced labour and would contravene the International
Labour Organisation’s Forced Labour Convention (1930) to which India is a
signatory. The convention gives an exemption in the case of “violent epidemic
or epizootic diseases”, but only for the “shortest possible time.” The only
legal cover the Gujarat government may have for not paying overtime rates would
be the removal of Articles 3-24 of the 1930 Convention by the Protocol of 2014.
Earlier, Article 13 had mandated that such labour “shall be remunerated at the
rates prevailing in the case of overtime for voluntary labour”. That India’s
'model' state has to go for forced labour is shameful.
Meanwhile, Uttar
Pradesh apparently to protect existing employment and provide jobs to returning
migrants has suspended all but three existing labour
laws for the next three years. Only laws relating to bonded labour,
construction workers, and for compensation for injuries or death remain. In
Madhya Pradesh, all new manufacturing units have been exempted from most
provisions of the Factories Act of 1948 for 1,000 days; managements allowed to
resolve disputes without adjudication by the Labour Courts and the coverage of
the Industrial Disputes Act diluted.
This largesse that
state governments are giving away to employers is not theirs to distribute. The
whole gamut of laws relating to wages and work conditions has evolved out of
decades and in some cases, like the eight-hour day, over a century of national
and international struggle to make factory work civilised, equitable and safe.
However, as “Labour” is a concurrent subject in the Constitution these measures
have been brought in through ordinances which need ratification by the Centre.
More importantly, is it possible that the UP Chief Minister is unaware of the
consequences of making infructuous laws like the Minimum Wages Act, Maternity
Benefits Act, Equal Remuneration Act, Industrial Disputes Act, Employees’
Provident Fund Act, Employees’ State Insurance Act and the Trade Unions Act,
among a plethora of other progressive labour
laws? Or that the MP Chief Minister does not know the consequences of
suspending the Factories Act or making Labour Courts redundant? Would they have
dared to act so audaciously unless their actions had the blessing of higher
powers?
Perhaps the Centre
wants to advance changes in the labour law by manipulating the states. Of its
four labour code bills on Wages, Industrial Relations, Social Security and
Occupational Safety and Health and Working Conditions only two have been passed
and two are still in the pipeline. They also dilute existing labour laws and
empower the states to change laws relating to working hours, wages, dispute
resolution process and organising trade unions.
The removal of legal
safety nets will increase low income and exploitative jobs. Already poor
quality of jobs and high degree of informality are responsible for the large
number of the working poor in India. According to the International Labour
Organisation, of the 535 million workforce in India (2019), nearly 398.6
million suffered from poor quality jobs or vulnerable employment. With legal
dilution, the number of working poor (those living on incomes of less than
Rs.198 per day) will go up further.
The Indian
economy was not creating enough jobs before the pandemic (unemployment
rate is estimated at a staggering 27 per cent by Centre for Monitoring Indian
Economy), but it was nonetheless adding 12 million people to the labour market
annually. Now the lockdown and subsequent suspension of labour laws will lead
to further immiserisation of the working poor, lowering their consumption of
goods and services. The profitability crisis of the corporates will not be
solved unless demand revives and these policy changes do not address that
question.
The hope that India
could become the next hub in the global supply-chain as capital seeks to
relocate from China is unrealistic. Despite claims of moving up the ladder in
“Ease of Doing Business”, Vietnam, Thailand and Mexico are emerging as the
preferred destinations. It is difficult to
imagine how UP and MP can offer a stable and safe environment for foreign
capital and become global manufacturing hubs. They are among India’s most
regressive states with high level of social instability. Poor infrastructure
and lack of connectivity to deep sea ports already takes away the advantages of
cheap and plentiful labour. Low skill levels place them far below states like
Tamil Nadu and Karnataka where there is the largest cluster of Japanese
investments.
A feverish rush to the
bottom by diluting labour laws is unlikely to yield sustainable solutions.
These legal protections for workers evolved as social stabilisers in times of
crises and helped build public trust in state institutions and government.
Suspending them will come with social and political consequences.
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