Events
& Issues
New Delhi,
20 May 2020
Easing Labour Laws
DRAW VENTURES OR EXPLOITATIVE?
By Dhurjati Mukherjee
The recent decision of States such as Uttar
Pradesh, Madhya Pradesh, Gujarat, Maharashtra and Odisha to ease labour laws has
been the subject of concern and discussion. On the one hand there are employers
who are supporting the move and on other trade unions and labour experts vociferously
opposing it.
The changes in the labour laws include allowing
employers to raise or change working hours, such as by four hours (under the
Factories act to increase daily working hours to 12) and up to 72 hours a week
in overtime for workers who are willing; allowing third party inspections for
new units; more flexibility in hire and fire policy, determining wages,
reducing liabilities viz employee benefits. These are being justified to do away
with rigidities that have hamstrung the existing concerns and deterred fresh
investments.
The UP government on May 6 passed the Uttar
Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020, that
exempts businesses, manufacturing mostly, for three years from a range of
labour laws. And other States decided to follow suit.
The reasons given for the proposed changes
are obviously meant to attract investment but which clearly lack logic and
justification. Over working of labour is not an established norm in any part of
the world and these changes cannot be expected to bring foreign investments.
Some economists are of the opinion that this may be a ploy to further exploit
labour, which is near normal in this country.
Besides, few political parties, mainly from
the Left have written to President Ram Nath Kovind registering their protest at
the dilution of labour laws. Even the RSS-affiliated Bharatiya Mazdoor Sangh
(BMS)), has stoutly opposed the changes. Further, Central trade unions are
contemplating to lodge a complaint with the ILO against government’s
misadventure of gross violation of labour standards and in the meantime, as
many as 10 trade unions have given a nation-wide strike on May 22 to protest
the suspension of labour laws by these States.
According to a professor and labour economist
at XLRI the changes posed considerable cause for concern as these spell labour
market anarchy. This is based on certain presumptions such as labour laws are
not needed in society, which means that the state will have no role in
monitoring, that workers have to depend on the employer’s goodwill and that the
labour rigidities are the principle irritants that halt investment and hence
economic growth. But these assumptions are difficult to accept as employees
can’t possibly be at the mercy of employers, who have been found to cheat them
and that investment does not depend on labour but more on infrastructure and
competitiveness of the industry.
Well-known labour economist and chairperson, Centre
of Informal Sector & Labour Studies at JNU, Santosh Mehrotra, referred to a
survey eight years ago of the World Bank to find out from employers in South
Asia what they considered the most important barriers to industrial growth. It
was found that electricity, infrastructure and logistics were considered the
most critical impediments. Mehrotra added that the findings were particularly
true for the Hindi belt States, where agriculture is the main source of
employment and that not following labour laws was not welcome. Other economists
expressed worry over reduction in labour standards and in labour cost to
benefit employers at the cost of poor labourers.
Those who talk of getting rid of archaic laws
do not realise that in this country most of these regulations as it is are not
adhered to due to lack of monitoring. As such, exploitation of labour is
rampant as without these changes, they have to work at least 2 hours more that
the stipulated 8 hours without any extra payment. Increasing this to 12 hours a
day appears unrealistic as it will be a strain on the human body and not
necessarily productive and even a health hazard. Moreover, optimistically
speaking, not more than 50 per cent of units would give them overtime.
Another aspect for consideration is whether the
changes would actually be for a period of three months only as claimed. If that
be so, till labourers join back to work, the proposed changes are welcome but
it must be ensured that these cannot continue beyond July 31, at the latest.
Also extra work should come for extra payment which should have the approval of
the respective labour directorate of the States who need to ensure compliance.
The question on unemployment and
underemployment is quite severe in the country and by allowing labour to do
extra work would obviously lead to curtailing the workforce. As it is,
unemployment has reached around 28 per cent and if this is allowed, one can
easily visualise the situation at the end of this fiscal. Besides, under-employment
is a fact of life as around 40 per cent of the rural workforce fall in this
category.
An additional fact is that if one delves deep
into the migration problem, it is very much manifest that lakhs have returned
to the eastern States. Thus, the problem of unemployment is grave for the
migrants who have entered these States and, as statistics reveal, are backward
and face critical problems.
Meanwhile, it is known fact that globalisation
and automation are job destroyers as hard figures will demonstrate. There is
also a tendency to go for automation and hire less labour. Those who talk about
jobs being created, it can very well be said that most of these are in the
informal sector with salaries being rather low and job security much less.
The political leadership which speaks of
labour reforms should at least try to find out the real conditions of labour
and the actual salary they get in their hands before talking of reforms. While big corporates pay adequately, the small
and micro sectors are those that fail to give sufficient compensation to their
labour.
Observations the CEO of Niti Aayog in a
national daily recently are worth noting wherein he stressed that what States
must ensure is that terminated employee must get 45 days’ worth of salary. The big
question is whether he has tried to find out how many SMEs follow this? Is
there any mechanism at the State or Central level to ensure compliance? Or, for
that matter, how many of these units pay minimum salary to their employees? Or
keep a small percentage of the total workforce as employees, while the rest are
treated as temporary workers for years together.
In these unprecedented times, clamouring for
labour reforms without even delving deep into the problems that labourers already
face needs re-thinking. Issues need to be examined, not by bureaucrats but by
labour economists and civil society groups. Genuine attempts need to be made to
ensure that, in an emerging economy, the conditions of their livelihood improve
for the better and not worse. ---INFA
(Copyright, India
News & Feature Alliance)
New Delhi
18 May 2020
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