Voltaire once said, “labour preserves us from three great evils — weariness, vice, and want“. Labour has been the bulwark over which civilisations were built and global dynamics changed. Even today, migration of labour and market forces form one of the key pillars, if not the key pillar, of international political economy. It is estimated that over 600 million new jobs have to be created by 2030 to keep pace with the growth of the working age population in the world. We also need to do more for those who already are a part of the work-force with some 780 million men and women not earning enough to lift themselves and their families out of the $2 a day poverty thresh-hold. This is in line with the objective set by Goal 8 of the 2030 Agenda for Sustainable Development, which states

Promote inclusive and sustainable economic growth, employment and decent work for all

In many places, having a job does not ensure an individual’s ability to escape poverty. Lack of opportunities for decent work, insufficient investments and under-consumption erode the basic social contract that is an integral part of any democratic society. As per the International Labour Organization’s World Employment and Social Outlook – Trends 2018 document,  the global unemployment rate was at 5.6% in 2017, which corresponded to 192.7 million unemployed individuals [1].  This was expected to fall by 0.1% in 2018, thereby keeping the number of unemployed essentially unchanged despite the presence of a labour force that is growing. What is more important and interesting is to look at the contribution of various countries to these trends and realities. While developed countries gave a strong performance with the unemployment rate projected to fall by an additional 0.2%, the picture is not as good in emerging and developing countries: employment growth is slated to fall short of the growth in the labour force, raising the headcount  of unemployed persons by 0.9 million in 2018. In India, the unemployment rate is projected to remain at 3.5% over the period 2017-2019, which, due to rising population will be equivalent to 18.3 million, 18.6 million and 18.9 million unemployed people in 2017, 2018 and 2019 respectively.

Realities of the Labour Market in India

India has always had a large labour market due to the human resource it has.  While the primary sector faces its own fair share of issues and problems in India, the share of informal employment has risen within most of the manufacturing industries. This is partially due to the labour market rigidities that prevent creation of employment opportunities. Lately, while there has been significant job creation in some services that are Information and Communication Technology (ICT)-intensive over the past two decades, a significant number of these jobs have been in traditional low value added services, where there is a certain element of informality and where vulnerable forms of employment are usually dominant. The spurt in these specific kind of jobs has not been successful in meeting the employment demands of India’s population [2].

If we look at the Annual Report 2017-2018 of the Ministry of Labour and Employment, Government of India, the numbers therein show the problems in great detail [3]. In the 5th Employment Unemployment Survey (2015-2016), the Labour Force Participation Rate (LFPR), which is is the sum of all employed workers divided by the working age population, was 75%, 23.7% and 50.4% for men, women and in total respectively. For the same period, Worker Population Ratio (WPR), which is the the proportion of an economy’s working-age population that is employed, was 72.1%, 21.7% and 47.8% for men, women and in total respectively, and the unemployment rate was 4%, 8.7% and 4.3% for men, women and in total respectively. The unemployment rate has plateaued at around 3.5% this year.

India has two major provisions to safeguard the interests of workers: the Payment of Wages Act 1936 and the Minimum Wages Act 1948. While the former ensures the timely payment of wages and that no unauthorised deductions are made from the wages of the workers, the latter was enacted to safeguard the interests of the workers mostly in the unorganised sector.  Under the provision of the Minimum Wages Act,

both the Central Government and State Governments are the appropriate authorities to fix, revise, review and enforce the payment of minimum wages to workers in respect of scheduled employments under their respective jurisdictions.

There are 45 scheduled employments in the Central Sphere and more than 1700 in the State Sphere. The enforcement of the Minimum Wages Act, 1948 is ensured at two levels. While in the Central Sphere, the enforcement is done through the Central Industrial Relations Machinery (CIRM), the compliance in the State Sphere is ensured through the State Enforcement Machinery. It is, however, not only the minimum wages but also the wage ceiling that matters. In exercise of the powers conferred by sub-section (6) of Section 1 of the Payment of Wages 1936 Act, the Central Government, on the basis of figures of the Consumer Expenditure Survey published by National Sample Survey Office, has recently enhanced the wage ceiling to Rs. 24,000/- per month with effect from August 2017, for the benefit of the workers. Due to the influence of the state government in setting the wages in a state, there are large differences in the wages across the country today. In urban areas, regular wages are highest in Haryana, with Assam, Jharkhand, Jammu and Kashmir, and Karnataka not far behind, while the lowest regular wages prevail in Gujarat. In rural India, the states that had the highest wages for regular workers were Jharkhand, Jammu and Kashmir, Uttarakhand, Bihar and Himachal Pradesh, while those with the lowest wages were Karnataka, Odisha, Andhra Pradesh, West Bengal and Madhya Pradesh.

India has been making steady growth in its economy with a regular rise in its GDP. However, this rise is not necessarily translated into money for the workers. While GDP per worker, including the self-employed, in 2011–12 was estimated at Rs. 1,75,539 per annum, the average income of wage workers was Rs. 81,819 per annum, or approximately 46.6% of the GDP per worker. This showed the discrepancy between the GDP growth and the income-patterns of workers. In India, the labour income share of the total national income declined from 38.5% in 1981 to 35.4% in 2013. This suggests that the profits, investments and other income from capital were increasing much faster than the compensation towards labour. It also implies that income is concentrated in the richer sections of society, which increases the inequality. This decline in labour income share has been found to be a global trend. On top of this, one needs to look at the subtle nuances of wage inequalities as well. As per the International Labour Organization’s recent reports published in 2018, for regular workers in rural India, wage inequality increased sharply in 2004–05 and declined slightly in 2011–12, but to a level higher than in 1993-94.  For all casual workers, particularly rural women workers, the levels of inequality reduced over the period of the study, mainly because of public policy through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). An adequate enforcement of minimum wages could close the gap between the lowest and the middle wage groups.

The wages earned by workers in India are closely found to be tied to social identities. Discrimination along social lines is still as prevalent as it was when India got independence. One of the major forms of wage-related discrimination is along the gender divide. As per the International Labour Organization’s India Wage Report 2018, regular rural female workers who are not highly educated received roughly 53% of men’s wages, while women with ‘high educational attainment’ are found to earn around 73% of men’s wages [4]. Regular female workers in urban areas with a primary education or less earn around 60% of what their male counterparts earn, while women with a secondary or higher education earn about 77% of their male counterparts’ incomes [4]. The wage differential also exists along the lines of caste and social groups, with the schedules castes and tribes seen to be well behind people from the General category in urban as well as rural areas.

Initiatives by the Government of India

The Indian government has been trying to take the initiative on starting a lot of programmes to alleviate the problems faced by the labour market. The Ministry of Labour and Employment has recently started the implementation of the National Career Service (NCS) Project as a Mission Mode Project for transformation of the National Employment Service to provide a variety of employment related services like vocational guidance, career counselling, information on skill development courses, apprenticeship and internships. The project has also been enhanced to interlink all employment exchanges with the National Career Service (NCS) portal so that the services can be delivered online.

The other big initiative on this front has been the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) that is being implemented by the Ministry of Labour & Employment for encouraging employment generation. Under this scheme, the Government of India will pay the Employees Pension Scheme (EPS) contribution of 8.33% for all new employees enrolling in the Employees’ Provident Fund Organisation (EPFO) for the first three years of their employment, with the exception of the textile sector where the Government is paying the complete 12% employers’ contribution for new employees. This will be to encourage employers to recruit unemployed individuals and to formalise informal employees. The scheme is for those having earnings up to Rs. 15,000/- per month.  Till 31st October 2017, more than 16,750 establishments had registered under the Yojana and the Employees Pension Scheme (EPS) contribution was reimbursed for more than 9,45,000 beneficiaries!

The government has also put in place labour codes for the betterment of the labour market in India, besides taking the initiative on bringing transparency and accountability in the enforcement of Labour Laws with the objective of strengthening the safety, health and security (both social and personal) for every worker and for bringing ease of compliance for running an establishment to help increase the  creation of employment opportunities. These initiatives include governance reforms through use of e-governance measures. The Government has also introduced legislative
reforms in this area by simplifying, combining and rationalising the existing labour laws into four labour codes.

  1. The first major code relates to the simplification, combination and rationalisation of the relevant provisions of the Minimum Wages Act (1948), the Payment of Wages Act (1936), the Payment of Bonus Act (1965) and the Equal Remuneration Act (1976). The Draft Code on Wages Bill (2017) was introduced in the Lok Sabha in July 2017 and was subsequently referred to the Standing Committee on Labour.
  2. Labour Code on Industrial Relations: The Labour Code on Industrial Relations subsumes three Labour Acts, which are The Trade Union Act (1926)The Industrial Employment (Standing Orders) Act (1946) and The Industrial Disputes Act (1947).
  3. Labour Code on Social Security & Welfare: This Code has provisions for compensation for injury and losses, insurance and provident funds, maternity benefits and gratuity pay and welfare of workers in specific areas like beedi plucking and miners.  The Code of Social Security & Welfare subsumes fifteen Labour Acts, which are
    1. The Employees Compensation Act (1923)
    2. The Employees’ State Insurance Act (1948)
    3. The Employees’ Provident funds and Miscellaneous Provisions Act (1952)
    4. The Maternity Benefit Act (1961)
    5. The Payment of Gratuity Act (1972)
    6. The Unorganized Workers Social Security Act (2008)
    7. The Mica Mines Labour Welfare Fund Act (1946)
    8. The Limestone and Dolomite Mines Labour Welfare Fund Act (1972)
    9. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act (1976)
    10. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Fund Act (1976)
    11. The Beedi Workers Welfare Cess Act (1976)
    12. The Beedi Workers Welfare Fund Act (1976)
    13. The Cine Workers Welfare (Cess) Act (1981)
    14. The Cine Workers Welfare Fund Act (1981)
    15. The Building and Other Workers Cess Act (1996).
  4. Labour Code on Occupational Safety, Health & Working Conditions: This Code has provision for the safety, welfare and health of workers in specific areas such as mines and plantations, besides provisions of holidays and security measures. The Labour Code on Occupational Safety, Health & Working Conditions was prepared by simplifying, combining and rationalising the relevant provisions of fourteen Labour Acts, which are
    1.  The Weekly Holidays Act (1942)
    2. The Plantation Labour Act (1951)
    3. The Mines Act (1952)
    4. The Dock Workers (Safety, Health and Welfare) Act (1986)
    5. The Building and Other Constructions Workers (Regulation of Employment
      and Conditions of Service} Act (1996)
    6. The Contract Labour (Regulation and Abolition) Act (1970).
    7. The Inter-State Migrant Workmen (Regulation of Employment and
      Conditions of Service) Act (1979)
    8. The Working Journalists and Other News Papers Employees (Condition of
      Service) and Miscellaneous Provisions Act (1955).
    9. The Working Journalists(Fixation of Rates of Wages) Act (1958)
    10. The Motor Transport Workers Act (1961)
    11. The Sales Promotion Employees (Conditions of Service) Act (1976)
    12. 13. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act (1981)
    13. The Beedi and Cigar Workers (Conditions of Employment) Act (1966)
    14.  The Factories Act (1948)

This gives a comprehensive set of codes for the various aspects that affect any individual participating in the labour market. The government has also recently brought in some governance reforms using technology. The Ministry of Labour & Employment has developed a unified Web Portal ‘Shram Suvidha Portal’ for bringing transparency and accountability in enforcement of labour laws and for easing the complexity of compliance. The main features of this multilingual Portal are threefold:

  1. A Unique Labour Identification Number (LIN) is to be be allotted to participating units to facilitate online registration.
  2. Instead of filing separate Returns, the participating units will only have to file a single self-certified and simplified consolidated Return. Since the launch of the Online Annual Return, more than 16,600 online returns have been filed on the Shram Suvidha Portal as of November 2017.
  3. There is the provision for the establishment of a Transparent Labour Inspection Scheme through computerised system based on risk based criteria and uploading the inspection reports within 72 hours by the Labour inspectors. Under the Transparent Labour Inspection Scheme, a computerised list of inspections is generated randomly based on risk-based objective criteria. Serious matters are to be covered under a mandatory inspection list. Complaints based inspections are determined centrally after examination based on the data and evidence provided. The inspection reports must be uploaded within 72 hours. Since the launch of the Labour Inspection Scheme, more than 3,00,00 inspections have been assigned as November 2017.

The other major benefit of the Shram Suvidha Portal is the common registration scheme under the Employees’ Provident Fund Organisation (EPFO) Act and the Employees’ State Insurance Corporation (ESIC) Act that has been provided on the portal. This makes it easier for people to avail a centrally managed insurance and provident fund facility. Integration of States’ Portal with Shram Suvidha Portal are also being done. As of today, Haryana, Rajasthan and Gujarat have been integrated already.

In terms of social security, under the Employees’ State Insurance Corporation (ESIC) Act, new initiatives under Health Reform Agenda of ESIC 2.0 have been introduced, including  maternity benefits, cancer detection and treatment facilities, telemedicine services and setting up of Employee’s State Insurance Societies (ESIS) for the administration as well as management of medical benefits and medical establishments in the states opting for it and also operating and maintaining ESIS dispensaries run by the State Government. It is good to note that there has been a raise in the ceiling for medical expenditure under the Employee’s State Insurance (ESI) Scheme from Rs. 2,150/-to Rs. 3,000/- per annum per insured person. Initiatives like E- Pehchan that sets up a process of establishing the identity of the insured person through Adhaar number have been notable additions as well. As of March 2017, the ESI Scheme has already been implemented  fully in 301 districts and partially in 160 others. The coverage of the scheme has been extended geographically, particularly in the North-eastern states of India and in Andaman and Nicobar Islands.  There has also been the setting up of a health scheme for select group of unorganized workers like rickshaw pullers, auto rickshaw drivers, domestic workers in selected urban areas, on a pilot basis. The number of insured persons covered under the ESI Scheme has increased to more than 3,19, 00,000 individuals, while the number of beneficiaries covered under the scheme has gone up to 12,40,00,000.

The Health Reform Agenda of ESIC 2.0 was further strengthened recently with the Indian Prime Minister Shri Narendra Modi launching a number of initiatives that include the online availability of Electronic Health Record of ESI Beneficiaries, a medical helpline number (1800 11 3839) for emergency and seeking guidance from casualty/emergency of ESIC Hospitals, and a special Out Patient Department (OPD) for senior citizens and differently-abled persons in ESIC hospitals, in the afternoon.

Some of the other salient features of ESIC 2.0 were up-grading dispensaries to six bedded hospital in phases, cardiology I treatment, yoga facilities, dialysis facilities in all ESIC Model Hospitals on a Public-Private Partnership (PPP) mode, all possible pathological facilities in hospital premises by outsourcing or by up-grading, behavioural training to para-medical and other staff of the hospitals, feedback system for all indoor patients, and proper and attractive signages at the required places in all ESIC Hospitals for guidance and proper communications to the visitors. The ESI Corporation has taken a number of decisions as well for strengthening of medical services, including increasing the bed strength of ESIC Hospitals by 50% if the bed occupancy of the concerned ESI Hospital has been consistently more than 70% in last three financial years and the opening of one doctor dispensary for more than 2000 IP family units in newly implemented areas, if no other appropriate facility is present there.

The Employees’ Provident Fund Organization (EPFO) has also been fairly active in the area of social security. It has kept the need for improving the coverage under the EPF& MPAct 1952 in sharp focus. For monitoring compliance of covered establishments, the system assisted tool in the form of Computerized Compliance Tracking System (CCTS) was provided to the field offices of EPFO, no concrete system or procedure for detection of coverable establishment was available to the compliance machinery. This necessitated the issue of revised guidelines for improving compliance and coverage. Accordingly, EPFO issued guidelines in April 2009 to all the field offices while restoring the territorial jurisdiction of Enforcement Officers, which had been briefly revoked, with due care taken to address issues of harassment from employers side by strengthening the supervisory mechanism on the conduct of the Enforcement Officers through constantly monitoring their performance and getting direct feedback from the employers, establishments, employees and their Unions/ Associations. The Employees’ Provident Fund Organization (EPFO) has had decent progress in recent years, with around 10,24,200 establishments covered as of March 2017 under the Act out of which 4,305 were exempted establishments, and the total membership in the Employees Provident Fund being 19,33,91,000 with membership in the Pension Fund being 96,98,76,000. Du ring 2016-17, 1,21,11,000 members’ claims were settled.

There has been progress on pension reforms for workers and the labour force as well. One of the long awaited demands for implementation of the minimum pension was
given effect to by the Central Government by issuing Gazette Notification No. 593(E) in August 2014 that provided a minimum pension of Rs. 1,000/- per month for members/widow(er)s/disabled/ nominee/ dependent parent pensioners, Rs. 750/- per month for orphan pensioners and Rs. 250/- per month for children pensioners. The disbursement of pension is being carried out at present using the Core Banking System (CBS) platform of the pension disbursement banks. Instructions have been issued to the field offices to ensure that pension was credited to the pensioners’ accounts on the
first working day of every working month.

One of the insurance schemes that I was quite interested in, purely because there need not be any contributions from the employees, is the Employee’s Deposit Linked Insurance (EDLI) Scheme, which first came into being in August 1976. This scheme is supported by a
nominal contribution by the employers, while the employee has to pay nothing to avail the insurance cover. The benefits provided in case of death of an employee who was member of the scheme at the time of death include the family getting an amount linked to either the average balance in the Provident Fund account (anyone who is part of the Provident Fund scheme is automatically a part of this too) during preceding 12 months or 30 times of the average wages of Rs. 18,000 of the last 12 months of the member subject to a maximum of Rs.6,00,000, whichever is higher.

For the sake of reforms in industrial relations, the government has set up 22 Central Government Industrial Tribunal-cum-Labour Courts under the provisions of the Industrial Disputes Act (1947) for adjudication of industrial disputes in organisations for which the Central Government is the appropriate Government. Through the Finance Act of 2017, the powers to settle the Appeals arising out of EPF&MP Act (1952) have also been entrusted upon these Courts/Tribunals. These Tribunals are located at various places with two each in Dhanbad, Mumbai, New Delhi and Chandigarh and one each in Kolkata, Jabalpur, Kanpur, Nagpur, Lucknow, Bangalore, Jaipur, Chennai, Hyderabad, Bhubaneswar, Ahmedabad, Ernakulam, Asansol and Guwahati. Further, there are two Industrial Tribunals at Mumbai  and Kolkata that also function as National Tribunals. In order to reduce the pressure of pending cases, Lok Adalats are being organized by the Central Government Industrial Tribunal-cum-Labour Courts as an alternate grievance
redressal system, with 42 Lok Adalats already having been held in the period April-October 2017, wherein 118 cases were settled.

Child Labour in India

Elimination of child labour has also been an area of great concern and the Government of India is committed to address this issue. Considering the nature and magnitude of the problem, the Government is following a robust multi-pronged strategy to tackle the problem, which as the Ministry of Labour and Employment puts it is as follows:

It comprises statutory and legislative measures, rescue and rehabilitation, universal elementary education along with social protection & poverty alleviation and employment generation schemes. The objective is to create an environment where families are not compelled to send their children to work. Government has adopted an approach to withdraw and rehabilitate working children from all occupations and processes.

We already have The National Policy on Child Labour that was declared in August 1987. The Policy addresses the complex issue of child labour in a comprehensive and integrated manner. The Action Plan mainly consists of

  • Legislative action plan: The Child Labour (Prohibition & Regulation) Amendment Act of 2016 covers complete prohibition on employment or work of children below 14 years of age in all occupations and processes. There is the linking of the age of the prohibition of employment with the age for free and compulsory education under Right to Education (RTE) Act of 2009. There is also a  prohibition on employment of adolescents in hazardous occupations or processes, besides creating stricter punishment for the employers contravening the provisions of the Act.
  • Project based action (in areas of high concentration of Child Labour): In pursuance of National Child Labour Policy, the Central Sector Scheme called National Child Labour Project (NCLP) Scheme was established in 1988 to rehabilitate children rescued from child labour. It is at present sanctioned in 280 districts in the country.
    Under the Scheme, working children are identified using child labour surveys, withdrawn from work and put into the special training centers so as to provide them with an environment and facilities to subsequently join mainstream education system. In these Special Training Centers, the children are provided stipend, formal education, mid-day meals, vocational training and regular health check-up.
  • Focus on general development programmes for the benefit of the families of Child Labour

Despite the robust policy and institutional guidelines and framework, the challenges posed by lack of knowledge dispersion, implementation and monitoring and accountability of institutional mechanisms at various levels along with age-old attitudes towards child labour makes India one of the most fertile grounds for employment of children. The Government of India has framed a Standard Operating Procedure (SOP) creating a way for monitoring agencies and individuals to ensure complete prohibition of child labour, and launched it in September 2017. What we now need is proper implementation of all these measures. 

Ministry of Labour & Employment has also developed an online portal called PENCil (Platform for Effective Enforcement for No Child Labour) that was made operation from September 2017. The purpose of this portal is to provide a mechanism for both enforcement of the legislative provisions against child labour in the country and effective implementation of the National Child Labour Project (NCLP). Even though NCLP is a central Sector Scheme, what is needed is the active involvement and coordination with State Governments to get the desired impact of the rehabilitative scheme. What is also needed is a certain convergence of the Project with other  departments both vertically and horizontally. PENCil has components like

  • Complaint Corner
  • State Government Corner
  • Sections on the National Child Labour Project (NCLP)
  • Child Tracking System

Now complaint of child labour can be electronically registered on PENCil to the concerned District Nodal Officers (DNOs). It is important we do all that we can, since as Nobel Laureate Kailash Satyarthi said

We as the governments, workers, employers and civil society must declare a war on child labour. This war cannot be won without strong, committed, coherent, and well-resourced worldwide movement. Equally needed is a genuine and active coordination between intergovernmental agencies at the highest level.

Industrial Relations, Unions and Strikes

Maintenance of harmonious industrial relations remains an important objective of the Ministry of Labour & Employment. Due to constant endeavours of the Industrial Relations Machineries of both the Central Government and the States, the overall industrial relations climate has generally remained peaceful and cordial. Number of incidences of strikes and lockouts have exhibited a declining trend, with the number going from 318 in 2012 to around 95 in 2017. This was also seen in the number of man-days lost, with the number going from 1,29,40,000 in 2012 to around 13,80,000 in 2017. There was found to exist a wide spread variation among the states and union territories when it comes to the spatial distribution of the numbers of strikes and lockouts. There is also a wide variation in terms of industry-wise dispersion of these incidences. As per the Ministry of Labour & Employment, the major reasons for these strikes in 2017 were usually related to 

  • Wage and allowances
  • Bonus
  • Personnel welfare and concerns
  • Indiscipline, violence and disciplinary actions
  • Retrenchment

The workers’ and trade unions in the country were found to be the major players responsible for mobilising workers for various causes and protests. Trade Unions in India are registered under the Trade Union Act (1926). As per the Ministry of Statistics and Programme Implementation and the Labour Bureau of the Ministry of Labour & Employment, there were 11,556 registered Trade Unions in 2013, with only 21.9% submitting returns (this itself can be a subject of another article, but that is for later). There were around 32,31,000 worker-members in the workers’ unions in the same period, with a net expenditure of Rs 26,10,00,000 in the year. What is of interest is the complete extinction of employers’ unions with there being 56 in 2010 but none thereafter from 2011 onward to 2013, as per the data. Uttar Pradesh, Haryana, Chhatisgarh, Goa and Chandigarh having the most workers’ Central Unions on the Government registers, as of 2013, with 676, 356, 89, 42 and 41 respectively. Among State Unions, Karnataka had the maximum numbers with 3,255 Unions registered, as of 2013, as per the Labour Bureau [5].  

The Trade Union movement in India is divided along political lines and follows a pattern of overlapping interactions between unions and political parties. Today, some of the trade unions and there associated national parties are as follows:

  1. All India Trade Union Congress, with the Communist Party of India
  2. Bharatiya Mazdoor Sangh, with the Rashtriya Swayamsevak Sangh and by extension the Bharatiya Janata Party (BJP)
  3. Centre of Indian Trade Unions, with the Communist Party of India (Marxist)
  4. Indian National Trade Union Congress, with the Indian National Congress (INC)
  5. Labour Progressive Federation, with the Dravida Munetra Kazhagam (DMK)

The first properly registered trade-union is considered to be the Madras Labour Union, which was founded in 1918, while the first trade union federation to be set up was the All India Trade Union Congress in 1920. We have come a long way from when around 1000 strikes were organised between 1920 and 1924, and subsequently the Trade Union Act was passed in 1926. The period following the economic liberalisation spearheaded by Shri Manmohan Singh in 1991 was characterised by declining government intervention in the economy, followed by a decline in the creation of public sector employment and encouragement for the private sector to play a bigger role in employment generation. Efforts for unionisation in the private sectors were usually met with opposition and the wider withdrawal of State support for workers further lessened their bargaining power. These policies led to a brief stagnation in the number of unionised formal sector workers after the period of the economic liberalisation. However, from the late 1990s, with the focus on the informal sector, particularly the informal employees within the formal sector, the trade unions got a boost in numbers and morale. 

The Trade Unions have been fairly active and vocal over the past year, and for good reason. While the the Central Government has tried its best to recognise and support Trade Unions, not all their measures have been holistic in their approach. Recently it proposed to grant statutory recognition to trade unions by amending Section 28-A of the Trade Unions Act (1926), so that all concerned ministries take them seriously.  However, the move may fall short of addressing the principal grievance of various trade unions:  statutory recognition of the unions by employers for collective bargaining purposes to represent the needs and interests of the workers. Some of the Central Trade Unions were also concerned with the scrapping of the 44 central Labour Acts and their reconstitution in the four Labour Codes, and also the introduction of fixed term employment by executive order. As per the Unions, 

“Government has been continuing to arrogantly ignore the 12 point charter of demands on minimum wage, universal social security, workers’ status including pay and facilities for the scheme workers, besides going for privatization of public and government sector and mass scale hiring on contract” 

The 12-point charter of the Central Trade Union that is mentioned here consists of the following points [6]:

  1. Urgent measures for containing price-rise through universalisation of public distribution system and banning speculative trade in commodity market

  2. Containing unemployment through concrete measures for employment generation

  3. Strict enforcement of all basic labour laws without any exception or exemption and stringent punitive measures for violation of labour laws

  4. Universal social security cover for all workers

  5. Minimum wages of not less than Rs 15,000/- per month with provisions of indexation

  6. Assured enhanced pension not less than Rs.3,000/- p.m. for the entire working population

  7. Stoppage of disinvestment in Central/State PSUs

  8. Stoppage of contractorisation in permanent perennial work and payment of same wage and benefits for contract workers as regular workers for same and similar work

  9. Removal of all ceilings on payment and eligibility of bonus, provident fund; increase the quantum of gratuity

  10. Compulsory registration of trade unions within a period of 45 days from the date of submitting application; and immediate ratification of ILO Conventions C 87 and C 98

  11. Stoppage of Pro-Employer Labour Law Amendments

  12. Stoppage of FDI in Railways, Insurance and Defence

In addition to these the unions are also seeking the withdrawal of the Land Acquisition amendment bill/ordinance, which has led to a significant amount of discontent among those who feel this could be misused for land-grabbing and privatisation.  

As discussed previously, India’s labour laws are under reform at a scale unforeseen since the ’70s. The two main Bills: the Wage Code Bill that has already been tabled in the Lok Sabha and awaits the winter Session, and The Industrial Relations Bill that is ready for tabling, have evoked widespread debate and discussion from various sectors. Press reports argue that the former may have greater powers to the Centre to set minimum wages across the board, while labour researchers feel that wage standards could be weakened. On the other hand, the latter will make the culture of flexible hire and fire, which was first introduced by a recent amendment to the Industrial Employment (Standing Orders) Central Rules, a norm across India. These two bills may significantly reduce the responsibility of the government and employers, and absolve them of their duty to deliver fairness and justice to the workers. The actions that can call for punitive action and the tools in the Bills thereof are significantly reduced than what it was previously. The aforementioned lessening of numbers of unions and the power of these unions, particularly in the eyes of employers, does not make it any easier for the workers. 

Poster-final-March-2018-1024x724

Saajha Manch’s publicity poster

Given the lack of proper implementation of the enforcement of various provisions and laws for workers, it is good to see that alternate models of doing so have recently emerged. A new community media platform in the National Capital Region (NCR) provides a database of accounts by workers of the kinds of enforcement failures and  violation of provisions for workers that may be encountered daily. and enforcement failure encountered daily. Not only that, Saajha Manch, which is powered by Gram Vaani, also provides workers with useful information on their rights and entitlements.  

The Way Forward

India has moved forward in leaps and bounds on advancing principles of rights, inclusion and employment security for workers but there is still a lot to be done [7]. Over the last quarter of a century, the so-called ‘trickledown economics’ has not been successful in empowering the poor. Wealth inequality persists due to the marginalised populations being vulnerable because of factors such as social exclusion, lack of basic amenities and market fluctuations. Social-protection programmes and policies are important to tackle these issues. They address multiple aspects of poverty by building resiliience against shocks and socio-economic crises, besides enhancing labour-market efficiency and providing income security to the poor. Mechanisms such as direct cash-transfer schemes, social insurance, vocational training, skills development and public work programmes are some of the social protection measures that can potentially provide safety nets for the poor and helps them withstand the brunt of market fluctuations. As per the World Bank (2015), social safety nets reduce the poverty gap by 15% and the poverty headcount rate by 8% [8]. As highlighted by the G20 Forum and the International Labour Organisation (ILO), social-protection systems act as self-regulating economic stabilisers, besides boosting employability and fortifying aggregate domestic demands, and thereby facilitating transition into a more formalised economy [9].

The economic structure in India is defined largely by the character of its labour force. This labour force is marked by self-employment, heterogeneity and a high level of informality (with over 90% of the total workforce composed of informal workers, who contribute to 50% of the national income!). High susceptibility and low levels of social protection plague these people, who face the problems arising due to the lack of institutional and statutory provisions on various levels for the protection of their interests and needs. More importantly, most preventive and protective legislation for social security are for the organised sector. The few legislative measures for the unorganised sector, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), are often confined to being ways of providing income and other basic amenities to workers but not preparing them for facing threats and problems with any contingencies. A pioneering policy initiative, on this front, was the introduction of the Unorganised Workers’ Social Security Act (UWSSA) in 2008. However, ten years after the Act was passed, the social-security needs of informal workers and worker in the unorganised sector remain unfulfilled due to significant statutory and structural issues.

To tackle the problem, one must know the loopholes and drawbacks that the current structures have. Let us look at the problems in the Unorganised Workers’ Social Security Act (2008) more closely to see where it can be improved

  • The scope and target audience of the Act are very loosely defined, particularly terms such as ‘unorganised worker’ and ‘unorganised sector’, with extensive ambiguities in the way they may be interpreted. Moreover, in defining ‘unorganised workers’, the Act excludes contract-based and agricultural labourers, thereby excluding a large section of the unorganised sector from its coverage. Further, the Act restricts the definition of the ‘unorganised sector’ to enterprises that employ less than 10 workers, without stating any good reason for it and fundamentally violating the Right to Equality between workers in places that employ less than 10 people and those in places that employ more.
  • The terms of the Act need to be made more rights-based and obligatory instead of discretionary, in various places. 
  • The Act only covers a small section of unorganised workers who fall below the poverty line. Most of the unorganised workers in urban areas are not below the national poverty line but are still facing a lot of problems with hardly any social or income security.
  • The Act does not address the concerns of women, migrants workers and workers from other vulnerable communities.
  • The Act does not allocate any significant institutional power to the social-security boards that it institutes. It restricts these boards to an advisory role. This is a part of the bigger problem of the lack of an efficient mechanism for administering or monitoring the schemes impedes the implementation of the Act.
  • The Act does not address the need for a proper funding mechanism, and there is a general lack of any financial plan within the Act itself.
  • The Act hardly assigns any responsibility or accountability to officeholders in District Administration, who are supposed to look after the registration of unorganised workers. Moreover, there is hardly any penalty or punitive action for defaulters.

 Each of these points must be addressed and resolved by the government. To optimally impact the people who need the policies most, the government must introduce radical administrative, legislative and statutory changes. One of them has to be that of fundamental amendments in the UWSSA 2008, with changes made to address the point on ambiguity of scope and target audiences. Universal access to social-protection schemes for all unorganised workers is also important, though the way to fund this will have to be thought of properly, due to the significant financial burden this may entail on the exchequer. There has been insufficient budget allocation for social-security programmes over the last ten years, with only about 30% budget recommended by The National Commission for Enterprises in the Unorganised Sector (NCEUS) actually allocated. Thus, a social-security fund or dedicated allocation from the main budget for this, with properly drafted financial plans and demarcated budgets, must be created in consultation with the various stakeholders, including the government(s), trade unions , international researcher (such as experts from the ILO) and civil society. The budgetary allocations and provisions must come with increased accountability and responsibility built into the system. Most importantly, there should be a way to have feedback and a dedicated complaint redressal system for this, so that dispute and policy revisions can be sorted out quickly and in an informed manner. Information dissemination of rights and entitlements is also very important and must be looked into.

For basic amenities, I personally feel the need of increasing the scope of policies for universal education and healthcare. Recently the Modi government rolled out the Ayushmaan Bharat scheme, which aims to cover over 10,00,00,000 poor and vulnerable families. This scheme can be extended to include primary healthcare. Provisions aligning with Right to Education (RTE) must be implemented, particularly with the National Child Labour Project (NCLP) for children in the unorganized sector. Recently, many social-security programmes were assimilated into a Direct Benefit Transfer Scheme (2013), allowing for funds to be credited directly into the beneficiaries’ bank accounts. However, what is the use of such a scheme if many informal workers do not even have a bank account, particularly women in low-income households? As per the Global Financial Inclusion Database (2018) by the World Bank, 11% of adults in India do not have their own bank accounts, and almost half of current bank accounts were inactive, as of 2017! Thus, if one wants the cash-transfer schemes to make a difference, making the people financially literate is very important through awareness-building and educational programmes. Further, instead of always providing cash, one can also provide for other forms of facilities, in kind and services. For instance, there could be concessions in healthcare and educational amenities. 

Besides all these aforementioned points for the unorganized sector, the points that matter for the organized sector differ slightly in their nature and scope. Some of the major points that I feel are very important include

  • Universalisation of the Public Distribution System is of fundamental importance. Inefficiency and corruption in this system must be rooted with strong punitive and preventive measures. 
  • Strict enforcement of labour laws is needed for the interests of the workers in the organised as well as the unorganised sectors. The Minimum Wages Act must be implemented properly, besides the various other Labour Laws and Codes. Complaint submission, review and redressal must be improved and accessible to the workers in both sectors. 
  • Universal social security cover or insurance schemes that lessen the burden on the workers, along with mediclaim schemes such as Ayushmaan Bharat, must be put in place, with proper financial plans and consultations with all stakeholders.
  • Assured pensions that are enhanced and in tune with the demands of the times for the entire working population would go a long distance in incentivizing the labour force and possibly help us in transitioning towards a more formal economy with assured benefits for workers. 
  • Compulsory registration of trade unions within a fixed period of time from the date of submitting application, besides the and immediate ratification of ILO Convention C 87 and  ILO Convention C 98 is important, as is the addition of teeth to the framework for the functioning and the powers of trade unions, particularly with respect to employers. 

This comprehensive plan for the reform and virtual overhaul of provisions for workers could go a long way in representing the interests and needs of workers, both in the organised as well as the unorganised sectors. 

In Conclusion

I would like to end this article with the sincere hope that the various stakeholders, including the government(s), bureaucrats, trade’ unions and employers, come together in creating an environment conducive for the welfare, good living and sustainable work for the workers; an environment that is built on the principles of inclusivity, empowerment and representation of workers; for, as Senator Bernie Sanders said

If we are going to reverse the race to the bottom, workers must have the right to engage in collective bargaining.

References:

[1] World Employment and Social Outlook – Trends 2018. International Labour Organization (2018)

[2] Ray, A.S. 2015. “The enigma of the ‘Indian model’ of development”, in A. Calcagno, S. Dullien, A. Márquez-Velázquez, N. Maystre and J. Priewe (eds): Rethinking development strategies after the financial crisis, Volume II: Country studies and international comparisons (Geneva and Berlin, UNCTAD and Fachhochschule für Technik und Wirtschaft), pp. 31–40.

[3] Annual Report 2017-2018. Ministry of Labour and Employment, Government of India (2018)

[4] India Wage Report 2018. International Labour Organization (2018).

[5] Trade Unions, Statistical Year Book India 2017. Ministry of Statistics and Programme Implementation, Government of India (2017).

[6] 12 Point Charter. Centre of India Trade Unions (2018).

[7] India’s Labour Law Changes. Action Aid India (2016).

[8] The State of Social Safety Nets. World Bank Group, 2015, 48

[9] “Strengthening social protection for the future of work”. Paper presented at the 2nd Meeting of the G20 Employment Working Group, International Labour Organisation, 2017.

[10] Global Financial Inclusion Database, World Bank (2018).