Nobody in his right mind would dispute that the socialist era labour laws need to be changed in order to bring them in consonance with the present-day economic conditions. Under the old labour law regime, industry was expected to compete globally with one hand tied behind its back. Back in the early 90s, when Narasimha Rao ushered in the first spurt of economic liberalisation, reform of archaic labour laws was also on the agenda. At the time, it was mistakenly suggested that these reforms would take the form of an exit policy, making it easy for employers to hire and fire at will. But, in effect, that was not what outright deletions, modifications and upgrading of the Factories Act of 1947 and the Industrial Disputes Act of 1948 were expected to achieve.
Even in the capitalist countries, hiring and firing is rule-based, guaranteeing workers due compensation and a mechanism for redressal of grievances. Due to the stringent labour laws, in recent years employers had routinely bypassed them by hiring workers on contract. This freed them from the burden of obligatory health and social security contribution as also bonus, gratuity, etc. Contracted employees were tempted by bigger pay packets in hand than they would receive otherwise if they were to be on the regular rolls. Yet, the changes announced by the Madhya Pradesh and Uttar Pradesh governments in the labour laws by stealth and subterfuge during the coronavirus pandemic, shift the pendulum fully towards employers. Workers are sought to be denuded of virtually all protections which should not have been the aim of labour reforms. An egregious provision in the ordinance by the UP Government increases the working shift from eight to twelve hours. New and old industries for three years would be exempt from the existing 40-odd labour laws. This is extraordinary. If the idea behind a 12-hour shift is to compensate for the loss of production during the lockdown, a second eight-hour shift could be sanctioned or, better still, new employees could be hired. Why inflict back-breaking 12-hour shifts as a matter of routine and not in case of a contingency. Among the laws nullified by the ordinance are provisions relating to safety, sanitary conditions, canteen, rest room, wages, etc. This is tantamount to giving the employers a free pass. It is one thing not to recognise trade unions, but quite another to do away with the industrial dispute mechanism.
The argument that this is the most opportune time, when there is a strong likelihood of foreign manufacturing firms reducing dependence on China, does not justify the blanket erasure of workers’ rights. Capital in India has always been irresponsible and exploitative. A fair balance between employers’ and employees’ rights has to be guaranteed. Flexible labour laws are alright as long as workers are assured of just and fair treatment. Forced labour is repugnant to the very idea of a republican democracy which guarantees equal civic freedoms to all citizens. Yet, Madhya Pradesh’s executive order amending labour laws for new industries for a period of one thousand days has got it right insofar as it seeks to minimise the menace of inspectors.
Myriad inspections are a source of corruption and an unnecessary brake on productivity. The Bhopal Gas tragedy is an outstanding example how easily the inspector regime could be toyed with with little greasing of bureaucratic and political palms. The boiler and other machinery at the Union Carbide plant were duly certified in good order by respective inspectors when within a few weeks the catastrophic accident occurred. Minimising the role of inspectors and other authorities in the day-to-day working of industries can by itself be a huge relief for employers. Meanwhile, the hurry with which the two BJP-run States have pushed the labour reforms would suggest the intention was to avoid a backlash from the labour unions and their political allies. It is notable that the Bharatiya Mazdoor Sangh, the largest trade union by membership in the country and allied to the Sangh Parivar, has already voiced its reservations about the changes in labour laws in UP and MP. More voices from the Opposition are expected to protest the ‘reforms’ by stealth. Following a promise of new labour codes made in the last Union Budget, a parliamentary committee had submitted its report on the proposed Industrial Relations Code.
It would be wise if all State governments were to model their laws on the select committee report and thus ensure a semblance of uniformity in labour laws across the country. The present effort by UP and MP is haphazard and ill-considered, though it reinforces the urgent need for reforms but in an absolutely fair and transparent manner only.