Within weeks of its being released to the public by the Union labour minister, Sahib Singh Verma, in early September, the report of the second national commission on labour found itself in the eye of a storm. While few could have expected that a consensus on the contentious issue of labour law reform would be reached easily, the extent of the opposition must have taken even the government by surprise.
Some of the most vocal protests have, in fact come from within the ruling coalition — the Bharatiya Janata Party affiliate, Bharatiya Mazdoor Sangh, and the Shiv Sena’s Bharatiya Kamgar Sena. A similar chorus of dissent was also voiced by almost all trade union delegates from different party backgrounds at the recently concluded 39th session of the Indian labour congress.
The commission, constituted by the National Democratic Alliance government in 1998 for reviewing labour laws in the light of globalization, has been mired in controversy right from the beginning. Both its terms of reference and the procedures adopted were criticized by labour leaders. As a result, the submission of its report was delayed, the commission’s term was extended twice. It now seems likely that a bill based on the recommendations will be introduced in Parliament during the ensuing winter session. Hence the debate can only intensify.
More fire than hire
Most unions are up in arms against the fact that the commission has virtually given the green signal to the government to go ahead with amending or deleting Section VB of the Industrial Disputes Act. The amendment would allow a company to close down a plant employing 300 workers or less without seeking the permission of the government, while at present, it is mandatory for units employing more than 100 workers to seek government permission for closure. The change will mean that more than 95 per cent of industrial units in India would be free to “hire and fire” labour.
What impact would this have on the employment scenario, which is already grim given that more than 2,50,000 units have shut down in the last decade' The S. P. Gupta committee noted a few months ago that amending the labour laws will lead to “more firing than hiring”.
Added to that is the near absence of social security schemes in India. Post-globalization, even the fragile public sector infrastructure that existed earlier in the spheres of health, education, food is being dismantled. Losing one’s job in such a scenario is akin to losing one’s right to life, because it amounts to depriving the affected worker and his family of access to these basic amenities.
Less than positive
In the light of this dismal scenario, at the recent labour congress, trade unions demanded that the government should allocate 1 to 2 per cent of the gross domestic product towards public expenditure on social security. But it is anybody’s guess whether current budgetary constraints will allow such resolution to be converted into reality.
The commission has also suggested that arbitration and mediation be adopted as a means of settling labour disputes and the role of the courts be minimized. However, many trade union activists have expressed the fear that this is only the precursor to denying workers a neutral forum to redress their grievances.
While the report has talked about the need for “umbrella legislation” for providing different types of protection, including benefits like pensions, to the unorganized sector, it remains silent on where the funding for these schemes will come from. Does this mean that the apparently progressive clauses will remain on paper while the entire system of contract labour will get an uncalled for legitimacy'
There is an increasing body of evidence to show that the impact of globalization worldwide, and particularly in the developing countries, has been less than positive. The biggest weaknesses of the commission are in not paying much heed to such indicators, and in not trying to explore the possibility of an alternative to the current globalization model.