Labour pains

As in land Bill, labour changes could unite Op­po­si­tion

The Financial Express - - COMPANIES -

Given the need to im­press upon in­dus­try that the gov­ern­ment is com­mit­ted to re­forms vi­tal to Make-in-In­dia, it plans to push through a slew of labour-re­lated Bills aimed at mak­ing life eas­ier for in­dus­try while, at the same time, also giv­ing some more rights to work­ers. The most im­por­tant of all the Bills, in terms of what they will do for busi­ness sen­ti­ment, is the In­dus­trial Re­la­tions one that al­lows firms to shut down with­out ap­ply­ing for gov­ern­ment per­mis­sion if they em­ploy un­der 300 peo­ple—this pro­vi­sion was first thought of by the BJP when it was in power in the 2000s but noth­ing ever came of it due to pres­sure from the unions. In­deed, when the unions vo­cif­er­ously protested against rais­ing the limit from the cur­rent 100 when the BJP revived the move last year, the gov­ern­ment formed a 5-mem­ber com­mit­tee, in­clud­ing the finance min­is­ter, to ex­am­ine the is­sue—the fact that the gov­ern­ment is go­ing ahead sig­nals its re­solve.

There are sev­eral other pro­gres­sive fea­tures in the var­i­ous Bills planned. Given the dif­fer­ence be­tween peak and trough pro­duc­tion—1.4 times in the case of Maruti, for in­stance—com­pa­nies need a way to re­duce em­ploy­ment dur­ing cer­tain months. Since this is dif­fi­cult with full­time em­ploy­ees, com­pa­nies go in for con­trac­tors and that leads to other prob­lems since con­trac­tors of­ten pay work­ers less than what the com­pany is giv­ing them. What is pro­posed is fixed-term em­ploy­ment, but with the same terms given to per­ma­nent em­ploy­ees, which means both work­ers and em­ploy­ers ben­e­fit—the changes in the Ap­pren­tices Act also gives man­age­ments more flex­i­bil­ity in hir­ing while train­ing work­ers on the job. Also pro­posed is au­to­matic con­cil­i­a­tion once a strike no­tice is given and clas­si­fy­ing gheraos and go-slows as co­er­cive ac­tion—since a con­cil­i­a­tion process will be deemed to have be­gun once a strike no­tice is given, and no strike can take place dur­ing a con­cil­i­a­tion, this means no flash strikes are pos­si­ble. Of­fice bear­ers of unions will have to be ei­ther em­ployed in that unit or in the in­dus­try—in sev­eral high-pro­file strikes in the past, it was found out­siders were egging on the work­ers in a big way.

Though smooth worker-em­ployer re­la­tions lead to more em­ploy­ment in the long run, there are sev­eral im­me­di­ate sops for work­ers as well. Apart from fixed-term work­ers hav­ing to be paid as much as per­ma­nent em­ploy­ees, re­trench­ment com­pen­sa­tion has been tre­bled and a work­er­reskilling fund for re­trenched work­ers is to be set up, funded by em­ploy­ers. An in­dus­trial re­la­tions board is to be set up to help ad­dress work­ers’ griev­ances if the con­cil­i­a­tion process fails and man­age­ments will have to ne­go­ti­ate with the largest union in the fac­tory in case there are mul­ti­ple unions. There is, of course, merit in the view that, like the land Act where the gov­ern­ment was only try­ing to undo the dam­age done by the UPA’s Act, the pro­posed changes in the labour Bills will also unite the Op­po­si­tion against the gov­ern­ment. In which case, a bet­ter so­lu­tion would be to let the laws be and en­cour­age state gov­ern­ments to come out with their own labour laws and ap­prove them un­der Ar­ti­cle 254(2)—Ra­jasthan’s labour law, for in­stance, doesn’t al­low unions to be formed un­less 30% of the work­ers are mem­bers as com­pared to 10% ear­lier. But with the gov­ern­ment need­ing to but­tress its re­forms cre­den­tials, per­haps it needs to get the labour Bills through and then let the states bet­ter them.

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