Global Shifts and Developments in India that Impact Trade Unions and Workers in 2021

Will Indian industrial workers like this one really benefit from the recent labour legislation in India? (Picture of worker)

Written by Pravin JP Arapurakal on December 31, 2020

The Speed at which business works today is  reducing protections for workers worldwide even as it pushes unwilling workers into becoming contract workers or small business owners. The Indian Central government has responded to some of these global pressures on business with a series of codified labour "reforms." 

Unfortunately these "codes" have been drafted into law without adequately consulting unions or the State Governments despite the fact that Labour is on the concurrent list (regulated at the Center and State levels) in the Indian constitution.

India' s state governments are a diverse lot and can be a great way for the Center to study various regulatory approaches. Sadly, the Central Government's tendency has been to centralise implementation of programs like the Construction Welfare Boards in an effort to improve implementation. This has resulted in compromising even well run programs like the Construction Welfare Board programs in states like Kerala.

On September 28, 2020 the President of India approved four new Labour codes, which also simplified the legal landscape and attempted to do more for unorganized workers. The Codes are as follows: 

- Code on Social Security (2020) which among other things extends Social Security benefits to the unorganized sector and migrant workers. 

It also extends ESIC benefits to businesses that have ten regular employees or more. 

Some categories of employees such as journalists are now eligible for gratuity after three years (not five as previously). 

CSR funds of large companies  (with 2-3 percent in annual profit can now be used for social security of unorganized, migrant and platform workers. 

Every unorganized worker over 16 must (at least in theory) be registered and given an ID number.

- The Industrial Relations Code (2020)
This code largely replaces the very detailed Industrial Disputes Act (1947) and the Trade Union Act of 1926. 

The definition of a ” worker” now includes journalists as defined in Section 2(f) of the Working Journalists, sales promotion employees and supervisors who earn less than Rs. 18,000/month. 

The Code clarifies that NGO's government space and defense organisations are not considered industries under the code but that educational institutions, hospitals etc are also not covered by the IR Code.

Provision of a“Re-skilling fund” has been made to help workers who have lost their jobs to automation. 

Questionable provisions of the Industrial Relations Code:

Negotiating Trade Councils have been introduced to streamline negotiations with the employer.

Office bearers of industrial unions must be union employees thereby reducing the role of political parties and national unions. In fact, for national unions to have relevance they will have to offer services to the company employees through the company unions.

Casual leave taken by more than fifty per cent of the employees on a given day will in future be considered a strike. 

Trade unions under the Industrial Relations Code are now required to give 14 days notice before going on strike. 

Business units with less than 300 workmen can now be laid-off, retrenched, or closed without government approval.

Industrial disputes can be voluntarily referred to arbitration by the employer as well as the workers

- The Occupational Safety, Health & Working Conditions (OSHWC) Code:

The OSHWC Code offers a single registration for all establishments with 10 or more employees. The OSHWC Code applies to all the various types of establishments, so the relevance of various sections varies.

The following amends the thresholds on how various provisions of the OSHWC Code apply:

Provisions for factories with power apply if there are – 10 to 20 workers

Provisions for factories without power apply when there are 20 to 40 workers

Contract Labour Section – 20 to 50 workers

Creche facility is mandated if there are 30 to 50 workers at a location.

A Welfare Officer is required when there are 250 to 500 workers.

A canteen is prescribed for units with 250 to 100 workers

Women can now work between 7 pm and 6 am provided consent is obtained and safety measures in place. Women are allowed in establishments involved in hazardous activities.

An appointment letter with terms of employment is now mandatory for all workers.

Free healthcare needs to be provided by employers annually for all workers who qualify by age.

Statutory benefits are now to be provided for inter-state migrant workers by employer/contractor. Travel fares to be provided for such workers annually.

A National Occupational Safety and Health Advisory Board must be set up to oversee and oversee implementation and to evaluate safety norms.

Working hours, leave, overtime, welfare provisions are mostly uniform across most Codes.

An employer is required to track work performed by the employees, their normal hours of work, weekly rest day, wages, leave, overtime work, dangerous occurrences etc.

The Government under the Code is also required to arrange third party audit by experts.

Also passed was the Code on Wages:

This code is perhaps the most poorly applied of all the new codes. It requires that rules on timely payment of wages and minimum wages be uniformly applied to all employees. It presents the idea of a floor wage, that can be determined by the union government after duly allowing for the basic living standards of workers. These ofcourse may be different for different geographical areas.

The state governments are therefore not allowed to fix a minimum wage rate which is lower than the floor rate arrived at by the Union government. The code at least in theory also prohibits discrimination between wages payable to a male and a female for the same work done. 

The above labour reforms in 2020 by the BJP led Government have reduced protections to workers but they also have a few provisions that have been welcomed by Labour activists. The challenge is to track implementation of these and other commitments. In the past, many ambitious provisions have been announced by this government and previous governments. Sadly in many cases (as in past legislation for migrant workers, implementation has been spotty and in some cases non-existent.

Where rules are not followed it should be the unions that contacts both the media and the relevant regulating authority.

What Else to Expect in 2021:
Fast evolving commercial opportunities worldwide are forcing governments like India to scale back worker protections so that companies can rise to take advantage of global business opportunities. However the manner in which this was done in India has attracted significant criticism. Critics have regretted the roll-back of employee protections but also expressed appreciation for the government's attempt to upgrade benefits for unorganized workers.

Automation Nation?: Technology, especially manual work automation is reducing manual jobs. Labour activists must push for at least six months notice before workers are made redundant. Also union contracts these days must require employers to provide training and reskilling for alternate job opportunities.

Jobs in Data Entry and Shipping may soon be Monitored by Digital Supervisors : While this is one of the fastest growing sectors of employment. Labour activists need to be mindful that some big employers like Amazon use software to evaluate employee productivity (such as the number of packages shipped per hour). The apps that track productivity issue warnings to employees who are slow. Sometimes these workers are fired., one of the fastest growing employers in the world fired more than ten percent of their workforce at a shipping center in Baltimore, USA for working too slow!

The Established Political Parties have in the past treated Labour unions as political extensions that provided them influence and revenue: Union leaders also benefited from lucrative union dues and perquisites. These parties focussed on serving their own interests by unionizing well paid industrial workers. Today, some 72 years since Independence, less than ten percent of Indian workers (estimated to be as low as eight percent) have "proper" jobs that entitle them to leave, medical, ESIC, Provident Fund and Gratuity benefits etc. Only around half this number (estimated at five percent) are unionized. The 2011 census estimates that only 12 percent of all workers are covered by one or other pension scheme.

Rampant Neglect of Farm workers: The established political parties (including the BJP/BMS, Congress/ INTUC, CPM/ CITU) failed to unionize unorganized and/or farm workers. With the fragmentation of family farms, small farmers are gradually transitioning to farm workers. 

Further Weakening of Protections to Farmers and farm workers by the BJP and its allies: These farmers and farmworkers livelihood was protected to some degree by means of a system of regional APMC (Agricultural Product Marketing Committee) markets as well as minimum support prices that would be published before it was time to sow the crop. Even these protections are being done away with by the BJP government through three farming laws that came into force in August 2020.

The Agricultural laws have managed to arouse the farmers and some opposition parties who are finally fighting for the rights of farmers and farm workers. These agricultural workers constitute approximately 58 percent of the work force and contribute 18 percent to India's GNP. 

Labour advocates will tend to be skeptical of the new Labour legislation until it becomes apparent that these provisions are actually being implemented. Until then they are merely a statement of good intention!

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