Labour law reforms are a necessity

It is ironical that a country with so many unemployed youth mostly exports capital-intensive goods

While it is heartening to note that Indian policymakers seem to have realized the importance of manufacturing in providing jobs, it is also equally important to realize that the path leading to higher manufacturing employment has to necessarily cross a difficult bridge called labour reforms. Careful research done by several leading economists using nationwide plantlevel data and also employing cutting-edge econometric techniques has shown that labour reforms is sine qua non for achieving employment growth in India.

Given its criticality, the issue of labour reforms has attracted a lot of mainstream media attention. However, most of the arguments advanced, both in favour of and against labour reforms, are coloured by the ideological worldview or the economic status of the people making the arguments. Many a time, arguments are driven by passion rather than reason. For example, all those who represent workers or subscribe to a leftist worldview believe that labour reforms are likely to have a detrimental impact on employment and hence oppose even simple procedural reforms in this area. On the other hand, industrialists and those subscribing to rightist worldview call for radical labour reforms without appreciating the plausible political consequences and immediate human costs.

In order to understand the real impact of labour reforms on employment growth, it is important to move beyond self-selected anecdotes and engage in careful empirical analysis. Fortunately, a number of prominent scholars have taken up this task and produced a wealth of evidence regarding the association between labour reforms and many real outcomes such as employment growth, firm growth, plant productivity, etc. Almost all of them use the data provided by Annual Survey of Industries (ASI) compiled by the ministry of statistics and programme implementation. The survey provides plant-level information pertaining to inputs used and output produced by thousands of factories. More importantly, the survey is conducted every year—allowing the researcher to track the growth of a factory over the years.

Professors Timothy Besley and Robin Burgess (BB henceforth), in their seminal research paper published in the Quarterly Journal of Economics, examine if labour regulations hinder economic performance in India. They examine all the statelevel amendments to the Industrial Disputes Act, 1949, made between 1949 and 1992. They carefully construct an index of changes by classifying all the amendments into those that ease labour laws and those that further tighten them. Using the plantlevel ASI data described above, they relate the labour law index to plantlevel outcomes such as employment, productivity and output. They find that rigid labour laws lead to significant reduction in employment, productivity and growth. More importantly, they document a strong relationship between labour laws and urban poverty. In other words, rigid labour laws are also associated with increased urban poverty. BB conclude that rigid labour laws ultimately end up hurting the very same constituency that they are supposed to protect.

To illustrate their point, BB compare manufacturing growth in West Bengal and Andhra Pradesh during their sample period. West Bengal, which was the largest producer of manufactured products during the beginning of their sample period, experienced a negative 1.5% growth in manufacturing, whereas Andhra Pradesh experienced a positive growth rate of 6%. Interestingly, as per the labour law index constructed by BB, West Bengal further tightened labour laws, whereas Andhra Pradesh liberalized them.

One of the limitations of BB is that they look at only amendments made to the Industrial Disputes Act and ignore other important labour reforms. Another criticism stems from the fact that BB ignore industry level heterogeneity in terms of labour orientation. Sean Dougherty, Verónica Robles and Kala Krishna (SVK) conduct a comprehensive study which overcomes the above mentioned weaknesses. Apart from the Industrial Disputes Act, SVK look at formal and informal labour market reforms in seven additional areas: the Factories Act, the State Shops and Commercial Establishments Acts, the Contract Labour Act, the role of inspectors, the maintenance of registers, the filing of returns and union representation. More importantly, they distinguish between labour-intensive and capital-intensive firms. The idea here is that if the negative impact pointed out by BB is due to rigid labour laws, then the impact should be higher in industries that are heavily dependent on labour. They indeed find such a result. They also find that the negative impact on growth and productivity is higher for firms in industries that face a lot of volatility. This is understandable given such firms require a lot of flexibility. Similar results have been obtained on studies done on other countries such as Mexico and Brazil.

Given the rigidity of labour laws, it is not surprising that the share of manufacturing in India’s gross domestic product has stagnated between 14% and 18%. A close look at the composition of exports further points out the distortionary impact of labour laws. It is ironical that a country with surplus labour and a large number of unemployed youth mostly exports capital-intensive goods such as petroleum products, gems and jewellery, transport equipment, machinery and instruments, and pharmaceutical products.

Given the current political and economic scenario, it is very difficult to expect a political consensus emerging at the national level. However, states such as Rajasthan, Madhya Pradesh and Gujarat have made positive moves with respect to labour reforms. Given the emerging competition between states to attract investments, one may hope that other states also are likely to follow suit sooner rather than later.

Source: Mintepaper, 23-05-2016

Labour in the twenty-first century

As the NDA government leans towards industrialists by scripting reforms that would legalise and expand contract labour, the big question is: do India’s trade unions have it in them to resist this imminent legislative blitz?

On February 24, the RSS-affiliated central trade union Bharatiya Mazdoor Sangh (BMS) will hold a nationwide protest against the NDA government’s labour law reforms. On March 10, all the 11 central trade union organisations (CTUOs), including the BMS, will observe a national protest day. And in end-March, they are planning a mass convention on labour policies to mobilise workers. All this comes in the wake of a 15-point pre-Budget memorandum of demands that the CTUOs had submitted to the Union Finance Minister in January.

India’s ‘labour problem’

Ask any top executive from India Inc. and he would tell you that India has a labour problem. And the International Labour Organisation (ILO) would agree. So here’s a quick but unconventional overview of India’s ‘labour problem’.

There are eight core ILO Conventions against forced labour (also known, in less euphemistic times, as slavery). India refuses to ratify four of those: C87 (Freedom of Association and Protection of the Right to Organise Convention); C98 (the Right to Organise and Collective Bargaining Convention); C138 (Minimum Age Convention), and C182 (Worst Forms of Child Labour Convention). India also refuses to ratify another major convention, C131, or the Minimum Wage Fixing Convention. These refusals in themselves present a succinct picture of the status of, as well as the state’s attitude to, labour welfare in India.

The Annual Global Rights Index, published by the International Trade Union Confederation (ITUC), rates 141 countries on 97 indicators derived from ILO standards. The rating is on a scale of 1 to 5-plus, based on the degree of respect accorded to workers’ rights. In 2015, India had a rating of 5, the second-worst category. It denotes “no guarantee of rights”. Despite being a constitutional democracy, on the matter of worker rights, India is in the same club as Saudi Arabia, UAE and Qatar, all dictatorships.

So yes, India certainly has a labour problem. And a reform of the present labour regime is a must. But what form should this reform take?

In 2014, the industry body FICCI (Federation of Indian Chambers of Commerce and Industry) and AIOE (All India Organisation of Employers) put out a paper titled “Suggested Labour Policy Reforms”. It pointed out that “India’s obsession with an archaic labour policy… is keeping investors away, hindering employment growth and making Indian enterprises uncompetitive”. The paper goes on argue that it is the multiplicity (44 Central and 100-odd at the State-level) of labour laws that is pushing workers to the informal sector, as companies seek “to circumvent the rigorous labour policies”.

According to the ILO, “labour market flexibility is as high as 93 per cent in India”. This means that 93 per cent of India’s workforce anyway do not enjoy the protection of India’s 144 labour laws. But industry’s solution to the labour problem is a dilution of these laws so that the mass of informal workers can be employed formally, but without legal protections.

Contrary to the ILO-mandated norm of tripartite consultations between employers, the state, and the unions in formulation of labour legislations, the NDA government has been faithfully following the FICCI-AIOE script, brushing aside CTUO demands. Unless this policy direction is reversed, labour rights and trade unions will become history so far as India is concerned. So the big question is: do India’s trade unions have it in them to lead the fight in the face of this legislative blitz?

The CTUOs offered a preliminary answer when they came together to pull off a massive general strike on September 2, 2015, which is estimated to have cost the national economy some Rs. 25,000 crore. Only the RSS-affiliated BMS pulled out at the last minute, so as not to embarrass the ruling NDA.

Many commentators, however, have dismissed this show of strength as mere tokenism. They point to the increasing irrelevance of trade unions in general, and the CTUOs in particular.

Firstly, the argument goes, in a globalised Indian economy, the centre of gravity has shifted from manufacturing to services. Secondly, even in manufacturing, the advent of global supply chains has meant a mass informalisation of employment as multinational enterprises break up the production process and sub-contract to suppliers in different parts of the world. This new norm of fragmented production signals a major victory for capital over labour.

To cite just one example, as reported by the NGO, the India Committee of the Netherlands, 80 per cent of the garment workers in Bengaluru toil in sweatshop conditions. They Make-in-India for reputed global brands such as Gap, H&M, Tommy Hilfiger and Zara — without ever being employees of Gap, H&M, Tommy Hilfiger or Zara. This kind of employment will become the legal norm for India’s workers when the proposed amendments become law.

Such hyper-exploitative industrial zones have been around for a while — from Sriperumbudur in Chennai to Bengaluru to Manesar in the National Capital Region. But India’s CTUOs have so far proved incapable of impeding this onslaught.

The fatal flaws

Given their failure to mobilise effectively around these adverse changes, the latest salvo of imminent labour reforms has turned the spotlight back on the CTUOs’ traditional weaknesses, which could prove to be fatal flaws in the confrontation between labour and capital in the current economic scenario.

The first problem is their political party affiliation. Of the Big Five unions, with a combined claimed membership of over 79 million, the BMS (17.1 million members) owes allegiance to the ruling NDA; INTUC (Indian National Trade Union Congress), with a membership of 33.3 million, is affiliated to the Congress; CITU (Centre of Indian Trade Unions, 5.7 million) is an extension of the CPI(M); AITUC (All India Trade Union Congress, 14.2 million) is a wing of the CPI; and HMS (Hind Mazdoor Sabha, 9.1 million) used to be affiliated to the socialist parties but projects itself as an independent union today.

Party affiliations entail three things: one, a restriction of the CTUO’s ability to expand, as it will put off those who do not like its parent party; two, party interests often trump union/labour interests; and three, disunity between the differently-affiliated unions.

For instance, the Congress-affiliated INTUC could not get the UPA to curb the rampant violation of labour laws during its 10 long years in power. Similarly, it is evident that the BMS has had no say in the drafting of the NDA’s labour law amendments. While their political masters — the BJP and the Congress — are on the same page so far as labour reforms are concerned, the CTUOs have struggled to forge a united front.

Their second big weakness, according to Chennai-based activist V. Baskar, is the leadership, which he believes is marked by the “bureaucratic mentality” of a labour aristocracy. “Is it really workers who are heading the CTUOs?” he asks. “They may have been workers once but today they function more like bureaucrats. They prefer policy analysis to on-ground organising. They have failed to extend their reach to the growing mass of informal workers.”

The third weakness is less to do with the unions themselves than with the changing labour landscape. With the majority of the workforce outside the purview of unions, their power to intervene or disrupt has also shrunk proportionately.

The pushback on the anvil

But the central trade union leaders counter these criticisms. “It is true that we are more focussed on policy issues,” says Tapan Sen, general secretary of CITU. “But that is because it’s an important battle right now. At the same time, we are also involved in struggles on the ground.”

One sector where the CTUOs do admit to some difficulty is the burgeoning IT services sector, which is marked by little union presence despite demanding work conditions. Says AITUC general secretary and CPI politician Gurudas Dasgupta, “Yes, we haven’t made much headway in the IT sector. Here our biggest challenge has been the instant termination of workers involved in unionising activity. This has created tremendous fear in the minds of the workers.”

Confirming that this ‘fear factor’ created by managements is a major hurdle to expansion of union activity, INTUC president G. Sanjeeva Reddy says, “Right now industry is aiming for two things: to legalise and expand contract labour; and to develop in-house unions which will dance to the tunes of the management and stay away from CTUOs.”

Says Mr. Sen: “Till about a decade ago, our main challenge was in mobilising the workers in secret and somehow getting the documents to the labour department for registering the union. Once that was done, the trade union became a fait accompli. But today, the state has become such a shameless collaborator that the moment the union papers reach the labour department, a call goes to the employer. They obtain the names of the workers who had applied, and terminate all of them.”

Mr. Sen and Mr. Dasgupta both point out that another hurdle in organising IT workers is their mindset. “They get paid a little more, and just because they wear a tie, good shoes, and have a nice office, they don’t think of themselves as workers. When their exploitation becomes unbearable, their mindset will change. We will be ready for them when the crisis strikes, as it inevitably will,” says Mr. Sen.

Harbhajan Singh Sidhu, general secretary of HMS, points to a larger pattern: “On the one hand, workers anywhere who try to organise a union are immediately terminated — with the state looking the other way. And on the other, there is this constant chorus of voices singing the declining relevance of unions. Can you see what is happening?”

Mr. Sidhu also rejects the charge of disunity among the CTUOs. “All the unions are unanimous on two points: regularisation of contract workers engaged in perennial work; and equal pay for contract workers performing the same job as permanent workers.”

Even the BMS, known for striking out on its own, has been collaborating with CTUOs of ideologically opposite persuasions. Says B.N. Rai, president, BMS: “We are with the other unions in our opposition to three things: FDI, disinvestment and labour reforms. As for labour reforms, the government can reform all it wants provided three entitlements are not compromised: sufficient wages, job security, and worker security. Because the labour law amendments are a frontal attack on these, we will oppose them.”

Striking an ironic note, Mr. Dasgupta points out that much of the credit for uniting the CTUOs should go to the NDA administration: “The current government’s virulent attempt to crush the trade unions has actually helped build unprecedented unity among the different unions.”

Of course, the series of actions planned in March will be a test not only of the CTUO’s unity but also their strength. Mr. Dasgupta rubbishes claims that India’s CTUOs are a spent force rendered even more irrelevant by the absence of a base outside the organised sectors. “We may have limitations.” he says. “But the central trade unions are still very strong in the strategic sectors — oil, coal, banking, defence, insurance. And we will keep fighting the anti-worker programme of this government.”

All the union leaders emphasise that the might of the 11 CTUOs is more than the numerical addition of their individual memberships. “During our general strike last year, it wasn’t just the CTUO-affiliated unions but even independent unions and non-unionised workers who participated. All of them are against labour reforms and a united front of CTUOs will help mobilise the entire mass of workers in both the organised and unorganised sectors,” says Mr. Sidhu.

Summing up, Mr. Reddy strikes a note of conciliation that sounds more like a warning, “The CTUOs have always been open to discussions with the management and the state. We favour solutions that benefit everyone. But under the current government, the employers and the state are together trying to squash the trade union movement. If they do not listen to us, rest assured that our country is in for major turmoil due to labour unrest.”

sampath.g@thehindu.co.in

Keywords: contract labour, NDA govt, trade unions, CTUOs, labour laws

Source: The Hindu, 22-02-2016

Labour ministry to restructure job survey, include service sector data

Labour bureau to visit over 10,000 firms every quarter, more than four times present number, to track employment

The Union labour ministry will revamp its quarterly job survey to reflect the latest employment data from both the manufacturing and service sectors in a bid to make it more structured and sync it with policymaking.

So far, employment data collection in India has been ad hoc, patchy and irregular. For instance, employment data from many manufacturing and export-oriented firms is available only up to June 2015, unlike export data, which comes in every month.

“The quarterly survey will be revamped soon. We are looking to expand the base of the survey as well. The aim is to have regular up-to-date jobs data for both policymaking and public consumption,” said Daljeet Singh, deputy director general of the labour bureau, which functions under the labour ministry.

“The quarterly survey which has been carried out since 2008-09 (but only for a small segment of companies) will be expanded,” Singh said, adding that the expansion will be in terms of firms visited and sectors covered. The labour bureau will visit some 10,000-plus firms every quarter—more than four times the present number—to track the employment scenario, he said.

To the list of labour-intensive and export-oriented manufacturing companies, the ministry is set to add more job-creating sectors, including banking, insurance, e-commerce and small and medium enterprises, to “get a complete picture”.

The quarterly employment survey was started in OctoberDecember 2008 to assess the impact of the global recession on the Indian job market in eight sectors: textiles, metals, automobiles, leather, gems and jewellery, information technology and business process outsourcing, transport, and handloom and power loom.

“Jobs data internationally create a lot of buzz but in India we have not done that yet on a regular basis. We have been discussing the idea for several months and the broad consensus is that there needs to be a structured employment survey quarter after quarter, with the results announced in time—not a year after,” said a labour ministry official, who declined to be named.

Kamal Karanth, managing director at human resources firm Kelly Services India, said that India does not have a culture of collating structured employment data regularly, but it has huge demand. “Different companies release some jobs surveys but that’s not official reliable data. The labour ministry runs the Employees Provident Fund Organisation and it can be used to track job creation as addition and substraction of active subscribers can be traced through it,” said Karanth.

He said that while there will be initial hiccups and criticism to such an exercise, the ministry should go ahead. “They can track the service sector as it forms a large portion (53%) of the Indian economy now,” he suggested.

Karanth, however, said tracking jobs at the bottom of the pyramid and in sectors like construction will be a challenge.

The labour bureau’s Singh said that though the ministry of statistics was talking about conducting a similar survey, there is no final decision as yet. “They will conduct a pilot late this year but the final outcome is not known. We have the capacity and capability of conducting such a survey and are looking to have a dedicated set of people to conduct the task.”

Despite talk about jobs, employment generation fell by a net 43,000 in the three months ended 30 June from the previous quarter in manufacturing and export-oriented units, according to the labour ministry’s 26th quarterly employment survey.

The net fall in jobs created was the lowest since April-June 2009 (131,000), the height of the global economic crisis, Mint reported on 10 December.

Source: Mint, 10-02-2016

What works for women at work

The ministry of labour is to require all establishments with 30 women workers or 50 total workers to provide crèche facilities for their employees, either at the premises or within half a kilometre.

Finally some good news: The Central government has begun to recognise that women workers need adequate maternity protection. Of course, the new measures announced are still quite limited. The ministry of women and child development has decided to increase maternity leave from the current 12 weeks to 26 weeks and extend this to all women workers in both public and private employment. The ministry of labour is to require all establishments with 30 women workers or 50 total workers to provide crèche facilities for their employees, either at the premises or within half a kilometre.

These are definitely welcome measures, apparently a response to low and declining rates of female work participation. India stands out in the world because of shockingly low rates of recognised work participation by women (around 24 per cent) that have even declined over the past decade. This obviously represents a huge economic loss for the country — but it is also a sign of the continuing low status of women and their lack of agency in Indian society.

As it happens, most women in India do indeed work, but they are involved not in paid employment but in unpaid work in their homes or communities. Such work is socially necessary but unsung and unrewarded — everything from cooking and cleaning to looking after the young, the old and the sick, to collecting fuel wood and water for households, to tending gardens and livestock, and so on. Bizarrely, during the recent economic boom in India, official data suggests that more women have moved from paid or recognised employment to doing unpaid work in their households.

There are many factors behind this peculiar tendency. The sheer inadequacy of job creation in the economy makes it hard for women to find suitable jobs. Gender gaps in education also work against them. For less skilled women, available paid jobs tend to be physically arduous and pay much lower wages than for men. The double burden of paid work and unpaid work creates extreme time poverty for working women. So when family incomes improve even slightly (as they did in the previous decade when real wage rates were rising — something that is no longer the case) women may be less inclined to try and do both.

And there are other impediments to women working outside the home: Patriarchal attitudes within families and social restriction on mobility; concerns about commuting time and about security at work and during the commute; and the difficulties of managing domestic responsibilities along with the paid jobs, given the unequal division of household work between men and women within families.

So maternity leave for the actual period of childbirth and the immediate aftermath is only one of the many concerns that working women have — though it is in itself a big one. If the government does succeed in making private employers provide increased maternity leave and in providing crèches at or near workplaces, that will certainly be a step towards somewhat easing the double burden that working mothers face. It would put India (at least legally) in a better position than many other countries like the US, though still far behind more enlightened countries in northern and eastern Europe as well as Central Asia. Some countries like Canada and Australia even provide a year of parental leave, which can be shared between parents.

But Indian working women would be in a better position only if these laws are actually implemented. Unfortunately, most labour laws in India are honoured only in the breach, and there is little or no serious attempt to enforce them, especially among private employers. Indeed, concerns have already been voiced that such laws and rules will only prevent employers from hiring women, or push more women workers into informal contracts where their rights are

not recognised.

In any case, at the moment, only around 10 per cent of the 60 million or so women in India who are recognised as workers have jobs in the organised sector. And even many of those have informal contracts, with little or no social protection. Most of the millions of women working in the unorganised sector, as regular workers in small establishments or in domestic work or as casual workers earning daily wages or as self-employed workers, currently do not get any kind of paid maternal leave.

So this is still just a tiny step towards the larger goals of improving women’s participation in paid work and increasing their economic empowerment. To make a real difference, public intervention has to be wider and more ambitious.

It has to address the huge issue of unpaid work, by taking measures to recognise it (for example through systematic and regular time-use surveys that capture people’s activities); to reduce it (by providing more goods and services that will mitigate the need for such work, such as the provision of basic amenities like piped fuel and water and better quality and affordable healthcare and education services); and to redistribute it both between households and society and within households across males and females. It has to deal with concerns about women’s security in public places and workplaces.

It has to focus on education that reduces the number of female dropouts and improves quality. It has to work towards reducing the huge gender gaps in wages in most activities. Without serious attempts on all these fronts and on enforcement, these newly declared measures will seem like tokenism.

The writer is professor of economics at Jawaharlal Nehru University, Delhi

Source: Indian Express, 14-01-2016

Labour’s love lost

At a public event during his recent visit to India, French economist Thomas Piketty drew attention to the “hypocrisy” of the Indian elite in the way it wanted to pursue capitalist development — obsessed with growth, but indifferent to welfare. Nowhere is this hypocrisy more evident than in the debate over labour reforms.

The prevailing wisdom is as follows: India has too many antiquated labour laws which hamper growth and investment. The need of the hour is a brisk pruning of this unruly thicket of pieces of legislation into a handful of elegant laws that make it easy for companies to hire and fire as they wish, and pay whatever salaries they can get away with. Once such laws are in place, foreign investment will flood into India, manufacturing will shoot up, and millions of Indians will find employment and “make in India” happily ever after.

From an industrial relations perspective, turning this corporate dream into reality requires two things: one, trade unions must be neutralised; two, contractualisation (temping/casual labour) must become the legal norm rather than illegal supplement for regular work.

Both these are effectively a reality in today’s India. But our legislative framework militates against it, leaving the capitalist class vulnerable to being challenged by the working classes on legal grounds. It is in this context that the incident of July 18, 2012 at Maruti’s Manesar plant assumes historic significance, for India’s working class as well as for the investor class.

The context

Since Independence, trade unions in India have mostly fought modest and pragmatic battles for outcomes such as higher wages and better working conditions. But this changed in the 1990s. Gurgaon-based labour activist Shyambir points out that after liberalisation, most strikes by workers have been not for wage hikes but for the right to form a union.

The right to collective bargaining is enshrined in our Constitution. Article 19(1)(c) grants all citizens the right to form a union. On top of it, we also have a Contract Labour (Regulation and Abolition) Act, 1970 that prohibits employment of contract workers for core industrial work. And yet, the Indian state has either stood by or actively colluded while employers tried every tactic, including illegal termination, to prevent union formation, and kept hiring temporary workers for regular jobs.

In the National Capital Region’s Okhla-Faridabad-Noida-Gurgaon-Manesar industrial belt, it is common to find workers toiling on 12- to 16-hour shifts for as little as Rs.9,000 a month, for years together. It raises a fundamental question: whose interests have the labour laws served all these years? Evidence suggests that it is not the labouring classes.

And yet, oddly enough, the clarion call for labour reforms is coming not from the working classes but from the corporate class. One reason for this could be that with global capitalism yet to recover from the shock delivered in 2008, the only way out of the crisis is to tighten the screws on labour to extract more value.

In such a scenario, who wants a labour class feeling empowered to fight for its entitlements? From this perspective, the Manesar conflagration was a decisive event that has, at least for now, beaten back labour and put capital firmly in control in an age-old conflict.

The background

To quickly summarise the incident of July 18, 2012: an outbreak of rioting at the Manesar plant left one HR executive dead and 40 others injured. The police arrested 147 Maruti workers and slapped murder charges on all of them. The dominant narrative about this event is one of labour militancy gone wild, holding it responsible for the loss of life and property.

What has not attracted critical scrutiny is the final outcome of the larger conflict between labour and management of which this incident was the culmination: the termination, in one go, of 546 permanent workers and 1,800 temporary workers. Such a mass retrenchment would be unthinkable in the normal run of things. Were we to ask who gained the most from this sorry episode, the answer is definitely not the worker.

The provenance of this incident goes back more than a year, to June 2011. That’s when Maruti workers began agitating for their right to an independent union. After several months of struggle, the Maruti Suzuki Workers’ Union (MSWU) was formed in early 2012. Now, the MSWU in early 2012 was a different animal from the kind of unions Indian managements were used to dealing with. It derived its power from something unprecedented in the short history of labour struggles in post-liberalisation India: a strategic unity between permanent and temporary workers. It was too dangerous a threat, one that no management would brook.

According to Shyambir, “After its formation in March 2012, right up to the incident of July 18, the main agenda of MSWU was regularisation of temporary workers. They wanted pay parity for permanent and temporary workers. Their slogan of ‘Same Work, Same Pay’ made them hugely popular.”

Given that around 80 per cent of industrial workers in the Gurgaon-Manesar belt are hyper-exploited contract labour, this union may have made a big impact on labour mobilisations had it been allowed to flourish. With the purge of 2,300 workers that followed July 18, 2012, the threat was snuffed out.

The present scenario

By October 2012, within three months of the July clash, Maruti had set up a new system of “company temps” in place of the earlier system of hiring temporary workers through contractors. Under this regime, the temporary worker will work for six months. Then he is laid off for five months, after which he may be recalled for another six months.

Both corporate commentators and labour activists have termed this a master stroke. While the former see in this a replicable model to pre-empt labour unrest, the latter consider it a move designed to prevent unity between permanent and temporary workers by regularly churning the latter.

In September 2015, Maruti announced a salary hike of Rs.16,800, spread over three years, for permanent workers. When temporary workers agitated for a similar revision, unlike in early 2012, the permanent workers did not back them. If breaking the unity between permanent and temporary workers was the mission, it had been accomplished.

Maruti, for its part, has presented its system of “company temps” as a superior alternative. When contacted by The Hindu, a management source said that “the new system is superior to the contract system since it is a direct recruitment by the company. No contractor is involved, and company temps enjoy all benefits like canteen food, uniform, PF, ESI bonus, etc.”

Not surprisingly, there has been a persistent corporate chorus demanding a labour regime that allows companies to freely hire temporary workers even for core operations. And the Modi government is eager to deliver.

The labour reforms on the anvil essentially boil down to two things: make it impossible to form a truly independent trade union; make it legal to keep temporary workers permanently temporary, while paying them a subsistence wage.

With the central trade unions seemingly uninterested in putting up a fight on core labour issues, independent trade unions nipped in the bud, and contract labour effectively legal, the only potential challenge that labour now poses to capital is mobilisation based on unity between permanent and contract workers. This was the weapon Maruti workers had assembled at the Manesar factory in 2012. It’s the reason why they needed to be made an example of, so that India’s working classes won’t dare to attempt such experiments in the future.

sampath.g@thehindu.co.in

Keywords: labour, reforms, central trade unions, contract labour, temporary workers

Source: The Hindu, 1-1-2015

India walks to work: Census

Over a fifth of non-agricultural workers in India commute to work on foot, followed by commutes by cycle, moped or motorcycle and bus, new data from the Census shows. Fewer than three per cent take cars or vans, and over half travel less than five kilometres.

On Thursday, the office of the Registrar General of India released data on commutes for the 200 million working Indians who are neither employed in agriculture nor in household industries. The data shows that nevertheless, nearly a third of these workers do not commute, meaning that they live in or adjacent to their workplaces. Commuting for work is even less common among women workers - 45 per cent of women do not commute for work - and higher in rural than in urban areas.

Among those 140 million workers who do commute for work, the distances tend to be quite small. A quarter of commuters travel less than 1 km to work, and another third travel between two and five km. Just 30 million people travel more than 10 km to work, and just 17 million of them have a commute over 20 km. Women commute shorter distances on average than men; the largest category of women commuters travels less than 1 km, while for men, the largest category travels two to five km.

In India, traditionally cities developed in ways that required small commutes. Transport is essentially a derived demand,” Amit Bhatt, strategy head - urban transport at EMBARQ India explained. However new towns and extensions are being built in the North American model, requiring long commutes which the poor struggle to afford, he said. "People, especially the poor, choose to live close to work because long-distance commuting is expensive and impacts their ability to earn. That is why attempts to shift the poor to the peripheries through slum rehabilitation schemes are so misguided," Shreya Gadepalli, India Regional Director at the Institute for Transportation and Development Policy, said.

A 2005 World Bank study of commuting in Mumbai found that the poor travelled shorter distances than the non-poor.

Planning in most cities does not take into account the realities of Indian commuting, the experts said. Among those who do have to travel for work, one-third commute on foot, the Census data shows. Another 10 per cent use bicycles and 16 per cent travel by bus, while 18 per cent use scooters or motorcycles. More people take autorickshaws or taxis to work than private cars. “Most planning reports don’t even account for pedestrian movement,” Mr. Bhatt said.

For commutes up to 10 km, walking is the most common means of transport, but as commutes grow in distance, people move from travelling on foot to taking buses and two-wheelers. This pattern is however significantly different for women; two-wheelers and cars are rare for women, who commute mainly on foot up to 10 km, followed by buses.

Even in India’s megacities, walking is the most common mode of commuting. In Mumbai, an equal proportion (31 per cent) take the train, while in all other cities buses come next. Chennai and Bengaluru have a high proportion of two-wheeler users.

Given the length of the average commute, transport priorities are skewed, say experts. “"The metro is no doubt an important mode, but buses are even more important. They provide cheap and flexible services that require shorter walk connections. They are more efficient for short and medium distance trips that constitute the majority of urban trips, even in large cities,” Ms. Gadepalli said. “Metros make sense only on very high demand corridors and to serve long distance trips—a small proportion of all trips even in megacities. They are expensive to build and operate. They lose their utility when it comes to Tier II cities which typically have shorter trips. Even in a city like Delhi, which requires a 600-800 km rapid transit network, metro doesn't make sense on more than a fifth of the network. The rest should be developed as a high-quality Bus Rapid Transit. And then, don't forget the city bus," she added.

Keywords: Census, commuting, transportation

Source: The Hindu, 16-11-2015

Lessons from an agitation

The end of the 17-day strike by nearly three lakh plantation workers in Kerala, following a wage settlement before a tripartite committee, should come as welcome relief to the ailing sector. It took six rounds of negotiations at meetings of the Plantation Labour Committee, comprising representatives of managements, trade unions and the government, to do that. Under the settlement, the daily wages of workers in tea, coffee, cardamom and rubber plantations will go up by a fair measure. The agitation drew much political attention as it followed a successful strike by women workers at Kanan Devan Hills Plantations Ltd in Munnar last month. Keeping out the mainstream trade unions, the women organised themselves independently to extract a 20 per cent bonus offer from the management, comprising 8.33 per cent statutory bonus and 11.67 per cent ex gratia payment. It was obvious that the women’s initiative gave the required impetus to a wider agitation across the State, and fuelled fears of fraternal strikes in other plantations in the country. The State government, which knew that the workers’ demand for higher wages for livelihood was justified, was caught in a dilemma as it was equally aware of the crisis gripping the sector owing to falling commodity prices and allied ills. It is possible that the authorities got the managements to arrive at a wage settlement by offering concessions in the form of lower plantation tax and agricultural income tax, besides subsidised electricity supply.

There is little doubt that the conditions of workers in the plantation sector leave much to be desired. Many of them live on-site in one-room line houses, and the scope for quality education for their children is limited. The government’s plans to upgrade housing and provide more schools in the plantation areas are welcome, but it requires sustained effort to bring about a significant change in the workers’ lot. The plantation managements have their stories of woe too. They say rising production and labour costs have made their produce uncompetitive in both domestic and overseas markets. Contending that the average price of each kilogram of tea, rubber or cardamom is less than the cost of production, planters have sought to link wage increases with a corresponding enhancement in labour productivity. It is in the fitness of things that the government has also decided to appoint a one-man commission to go into the gamut of issues in the sector. The bottom line is that while the entire sector needs to improve its competitiveness and productivity, it is equally important that the plantations remain responsible employers.

Keywords: strike by plantation workers, wage settlement, Kanan Devan Hills Plantations Ltd, plantation managements

Source: The Hindu, 16-10-2015

Money Mirage: Women in India Believe They Earn the Same Salary as Men

Mumbai: Our Bureau





Nearly 61% of Indian women are confident they earn at least the same salary as a man doing the same work, according to the India findings of a poll across G-20 countries by the Thomson Reuters Foundation supported by the Rockefeller Foundation.The perception that they earn the same as their male peers — and one they share with their counterparts in Saudi Arabia — seems particularly out of sync with reality in the light of World Economic Forum data. That shows that these two countries came in last in the G20 on a female-tomale ratio on earned income.
Misplaced perceptions aren’t the only issue. Women in India are among those facing the greatest workplace inequities but least likely to speak out.
Surprisingly — and in sharp contrast — Indian women are the most likely to speak out against harassment at work, an issue faced by one-third of women in G20 countries, and suffered in silence by most. Where 27% of Indian women said they had been harassed at work; of those harassed, 53% said they would always or most of the time report it.
The above are among the India-specific findings of a global poll that assesses the top five issues faced by women working across the G20 countries. The survey comes at a time when statistics show evidence that economies benefit when more women work, with a direct impact on life prospects for children.
According to the findings, the top five issues of concern for women across G20 countries are: work-life balance, harassment, equal pay, equal career opportunities and ma ternity impact on career prospects. More than 9,500 women were polled by independent polling agency Ipsos-Mori to offer insights into the way women feel and how they fare in the workplace.
In line with global findings, women in India — along with their counterparts in Russia, South Korea, China and Japan — rated work-life balance as the most challenging issue they faced in the workplace. Nearly 57% Indian women said it was their biggest concern. The second biggest worry for Indian women was flexible working, flagged by 42% of women.
Women in the country were also upbeat about having the same access to business networks as men with 53% agreeing they had. However, 40% felt that men had better access to jobs. 61% Indian women feel they can have a family without damaging their career.
Indian women being so vocal about speaking out against harassment was related to the aftermath of the Nirbhaya incident following which a blitz in media coverage highlighted the poor treatment of women, Thomson Reuters Foundation CEO Monique Villa told ET. “Five years ago, most women would not have spoken up. It shows how perceptions can change very quickly,” said Villa.
Overall, the global poll also threw light on other positive trends. Women, particularly millennials, are more upbeat when it comes to their role in the workplace. More younger women feel they can have children without damaging their career and more are confident they have the same chance of success as men in starting their own business. said it was their biggest concern. The second biggest worry for Indian women was flexible working, flagged by 42% of women.
Women in the country were also upbeat about having the same access to business networks as men with 53% agreeing they had. However, 40% felt that men had better access to jobs. 61% Indian women feel they can have a family without damaging their career.
Indian women being so vocal about speaking out against harassment was related to the aftermath of the Nirbhaya incident following which a blitz in media coverage highlighted the poor treatment of women, Thomson Reuters Foundation CEO Monique Villa told ET. “Five years ago, most women would not have spoken up. It shows how perceptions can change very quickly,“ said Villa.
Overall, the global poll also threw light on other positive trends. Women, particularly millennials, are more upbeat when it comes to their role in the workplace. More younger women feel they can have children without damaging their career and more are confident they have the same chance of success as men in starting their own business.

Source: Economic Times, 13-10-2015

Wages for the parliamentarians

The idea of creating an Emoluments Commission to recommend salaries and allowances for Members of Parliament has not come a day too soon. The pay and reimbursements drawn by lawmakers may not be unusually high in India by global standards, but two points have been agitating the people in recent times: the power enjoyed by legislators to fix their own salaries and the loss suffered by the exchequer as day after day is lost to parliamentary logjam, resulting in MPs drawing daily allowances through whole sessions during which no business is transacted. In this backdrop, the proposal of the Ministry of Parliamentary Affairs to establish an independent, three-member commission to fix the pay and allowances of parliamentarians is a sign that the government and the elected members themselves are sensitive to growing concern about the public expenditure incurred in their name. The proposal is on the agenda of the All-India Whips’ Conference to be held in Visakhapatnam, and may form the basis for future legislation to de-link members of the legislature from the process of fixing their emoluments. Members of Parliament currently draw a monthly salary of Rs. 50,000, a constituency allowance of Rs. 45,000 and a sumptuary allowance of Rs. 15,000. They may also hire secretarial assistance for Rs. 30,000. They are entitled to daily allowances and travel concessions besides other perquisites. The present levels of pay and allowances, however, have not been revised since 2010.

If an independent body is created for the purpose, India will be following the example of the United Kingdom, where an Independent Parliamentary Standards Authority has been created by law to oversee and regulate ‘business costs’ or the expenditure incurred by lawmakers in their parliamentary functions, and fix their pay and pension. Such a mechanism may help put an end to criticism, and sometimes public outcry, over legislators rewarding themselves with pay hikes and additional allowances from time to time. In a country where public life is associated in the popular imagination with unbridled greed, and parliamentary representation is seen as a means to amass wealth, it will be tempting to wonder why lawmakers need a salary at all, or, looking at legislative work often coming to a standstill, to question the present pay structure or the need for regular revision. However, payment for legislative work is an important element in attracting public-spirited citizens to participative democracy. As a general principle, pay ought not to be the primary attraction for elective office, nor the privileges and perquisites that come with it. At the same time, it cannot be so low as to be a disincentive to the public for entering the legislature. An independent pay panel for parliamentarians is surely a welcome proposal.

Keywords: salaries of Members of Parliament, Members of Parliament

Source: The Hindu, 29-09-2015

Seventh Pay Commission is no ogre

Its recommendations’ impact need not give us jitters because the rise in government wages will amount to only 0.8 per cent of GDP.

The report of the Seventh Pay Commission (SPC) is set to be released soon. The new pay scales will be applicable to Central government employees with effect from January 2016. Many commentators ask whether we need periodic Pay Commissions that hand out wage increases across the board. They agonise over the havoc that will be wrought on government finances. They want the workforce to be downsized. They would like pay increases to be linked to productivity. These propositions deserve careful scrutiny. The reality is more nuanced.

Critics say we don’t need a Pay Commission every ten years because salaries in government are indexed to inflation. At the lower levels, pay in the government is higher than in the private sector. These criticisms overlook the fact that, at the top-level or what is called the ‘A Grade’, the government competes for the same pool of manpower as the private sector. So do public sector companies and public institutions — banks, public sector enterprises, Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs) and regulatory bodies — where pay levels are derived from pay in government.

The annual increment in the Central government is 3 per cent. Adding dearness allowance increases of around 5 per cent, we get an annual revision of 8 per cent. This is not good enough, because pay at the top in the private sector has increased exponentially in the post-liberalisation period.

Competition for talent

A correct comparison should, of course, be done on the basis of cost to the organisation. We need to add the market value of perquisites to salaries and compare them with packages in the private sector. We cannot and should not aim for parity with the private sector. We may settle for a certain fraction of pay but that fraction must be applied periodically if the public sector is not to lose out in the competition for talent.

True, pay scales at the lower levels of government are higher than those in the private sector. But that is unavoidable given the norm that the ratio of the minimum to maximum pay in government must be within an acceptable band. (The Sixth Pay Commission had set the ratio at 1:12). Higher pay at lower levels of government also reflects shortcomings in the private sector, such as hiring of contract labour and the lack of unionisation. They are not necessarily part of the ‘problem with government’.

Sep 03 2015 : The Economic Times (Bangalore)

Work for a Shared Political Economy





That is the key to better labour relations

The nationwide strike called by 10 central trade unions did not quite bring the nation to a halt, but affected work in several sectors of the economy in different parts of the country . To that extent, the unions have demonstrated to the government that they still remain relevant and cannot be written off. But have they advanced the interests of India's workers, by causing loss of production and hampering transport and financial transactions? Not in the least. They say they oppose the present government's labour reforms. Are they certain that the existing array of central and state laws on labour are incapable of any improvement? The sad fact is that the unions have got trapped in a discourse of futility , in which they oppose any and every move to accelerate economic growth.The way out is for workers, employers and the political leadership to work out a shared political economy . The unions' ideological leaders are the Left, which swears by a piece of dogma thrust upon them by the Soviet commu nist party in the early 1960s, namely , that capitalism has become moribund and exhausted all the revolutionary potential that Marx had so eloquently described. Since all production is cap italist production, including in the state sector, the unions' leftist dogma leaves them opposed to production per se. This does no good to either the economy or the workers themselves. Workers must accept that it is possible to create vigorous economic growth with broad-based popular participation, which would improve living standards across the board. They must defend workers' inter ests but in a political economy framework that works with, not against, the dynamics of modern production.
In return, employers must appreciate that better-paid workers expand the market for industry's produce and that high-quality production results not from workers beaten down to survival conditions but from a workforce that is content and voluntarily innovative. The politician must help industry transcend the individual interest of minimising wage cost to achieve the collective interest of expanding the market and enthusing the workforce.

Less than 4 p.c. women become senior managers in India: report

A report released by management consultancy firm, McKinsey India, claimed that the representation of women in the senior management level in India is considerably less than the Asian average.

While in Asia, the average is around 11 per cent, in India only about four per cent of women make it to the highest echelons of the corporate world.

“In India, [in the corporate sector] the number of women at the entry level is 25 per cent and in the mid-level management it comes down to 16 per cent. In the senior level, it decreases further to four per cent,” said Sahana Sarma, the chief of McKinsey & Company, which prepared the report.

She was speaking at an event in the city on Thursday.

Ms. Sarma pointed out that in Asian countries there is a sharp drop in the number of women corporate executives when they enter the senior management level from the middle management level.

“In most of the Asian countries there is a 20-30 per cent drop [in number of women executives] at the senior management level,” she said.

As for the reason of such a sharp decrease in the senior management, Ms. Sarma said that the women were “most vulnerable at this point of their career” as they go through several changes such as marriage and maternity.

She also said that in a survey conducted by her organisation among women corporate employees in Asia, 43 per cent of them said their employers did not have the effective initiatives in place for promoting and developing women employees.

“Double burden”

Ms. Sarma also pointed out that the survey had revealed the “double burden syndrome” or the difficulty in facing the pressure of both family and society as another key reason for fewer women being in senior corporate posts. “The challenges are manifold and to tackle them more awareness and proper policy framing are needed,” she said.

Keywords: McKinsey India, women in senior posts, Sahana Sarma, double burden syndrom

Govt. considering Bill to ensure right to services

The Union government is considering a Bill to guarantee time-bound delivery of services, called the Right to Services Act, on the lines of the Acts already in place in Karnataka, Madhya Pradesh and Uttar Pradesh.

Union Law Minister D.V. Sadananda Gowda wrote to Prime Minister Narendra Modi on June 10 suggesting such a Bill be prepared at the Central level.

Top sources in the government have confirmed that the Bill is now under the “active consideration” of the Personnel and Public Grievances Ministry.

“[The] government as a major service delivery agency does not enjoy a great reputation among citizens. People are generally unhappy about the government’s service delivery mechanism on account of delayed services, lack of accountability and transparency as well as poor quality of services delivered,” Mr. Gowda wrote in his letter.

He gave the example of Sakala, a service delivery programme in Karnataka launched when he was the Chief Minister and which covers 11 departments and 151 services routinely provided from a single portal.

Track work flow

Not only can one apply for services through the portal but also track the work flow; a system of fines has been put in place in case of a delay without reason.

The programme relies heavily on e-governance and e-tracking of service requests, delays and reasons for delay, something that the Modi government has been advocating for some time.

“This Bill would be important in curbing petty corruption in delivery of government services, some of it can be seen in the States where it has been implemented and also in places such as the passport office, where processes have been streamlined,” a top government official said.

“For the ordinary citizens the corruption one faces while applying for things like a driving licence or a scholarship for a student or ration card is the only interface with the government of the day. The efficacy of the government is reflected in the ease with which these services are rendered,” said the source.

The UPA government, too, had a similar Bill, called The Right of Citizens for Time-Bound Delivery of Goods and Services and Redressal of their Grievance Bill, 2011, which had been introduced in the Lok Sabha but it subsequently lapsed.

While Mr. Gowda has advocated the adoption of the Sakala model for enacting the Bill, there are several versions available in various States.

Sakala has the distinction of having won the Prime Minister’s Medal for Excellence in Public Administration. While officials did not specify when the draft would go to the Cabinet, it is considered an idea close to the Prime Minister’s heart.