T.S. PapolaICSSR National Fellow and Honorary Professor

ISID, New Delhi

NATIONAL SEMINARon

Globalisation, Labour Markets and Employment Relations in India

Mumbai University

9-10 July 2012

decline in bargaining power vis a vis capital political groups/parties based on support of, or

providing support to labour, losing power smaller increase/stagnation/decline in labour

incomes/share vis a vis capital income erosion in labour rights, waning of support of

governments, general public, judiciary

increased mobility of capital as part of globalisation with continuing, or even increased, restrictions on the mobility of labour

high and rising levels of unemployment in developed countries and slow growth of employment (“Jobless growth”) in developing countries

pressures to increase labour market flexibility and reduce labour protection due to increasing international competition for markets (WCSDG, 2004, para 210)

increasing hegemony and influence of neo-liberal economic ideology

small base: only 2% of all workers (9.57 million / 474 million) and 35% of ‘organised’ sector workers (9.57 million / 27.12 million) unionised (2008), yet influence much larger earlier

percentage unionisation declining due most new employment in informal sector or non-regular

failure to organise the unorganised declining political influence due loosening of ties with

affiliating political parties (How many TU leaders MPs now as compared to earlier?)

ascendency of ‘employer militancy’, as seen in rising importance of ‘lockouts’ over ‘strikes’, within an overall decline in “industrial disputes”

Year Number Persondays Lost (million)Strikes Lockouts Strikes Lockouts

1990 528 403 10.6 13.52000 426 345 11.96 16.802003 255 297 3.21 27.052006 154 192 3.16 10.602010 262 168 5.12 8.18

public no longer sympathetic to the cause of labour, not willing to bear any inconvenience due to a strike/bandh

unions no longer viewed as useful social institutions contributing to democracy and social change

governments keen to project themselves as ‘pro-industry’, instead of ‘pro-labour’ as earlier

labour no longer seen by governments as weaker party deserving protection and support

industry often looked with a positive prism – contributing to growth and development, and labour with a negative prism – as a disruptive force in economic growth, by public, media and even governments

persistent demand for “labour reforms” = labour flexibility = freedom to “hire and fire”, from industry, international financial institutions and others

government inclined to view some regulations e.g., certain provisions of IDA and CLRA, as “extremely restrictive”, as evident in the statements in official documents

e.g. Economic Survey, 2005-2006“Various studies indicate that Indian labour laws are highly protective of labour and labour markets are relatively inflexible .... Evidence suggests that states, which have enacted more pro-worker regulations, have lost out on industrial production in general” (Para 10.13, p. 209)

Eleventh Five Year PlanThough it “has not proved to be a major obstacle in downsizing by several manufacturing enterprises during the past years”, “Chapter VB of the ID Act, 1947 does create a psychological block in entrepreneurs against establishing new enterprises with a large workforce—“or CLRA “constrains seasonal employment because of the fear the work done by the employees recruited to meet the temporary or seasonal demand would be declared to be work of perennial nature, thus constraining production for supply of large orders.” for eg. in garments and footwear industries (vol. III pp. 149-50)

contd…

yet, no change in law, (political compulsions?); instead, states allowed to amend laws, change rules, relax implementation( See e.g., Debdas Banerjee, D N Reddy, Shyam Sundar, Alakh Sharma and Kalpana, Papola Pais and

Sahu(all 2008)on changes in labour laws rules and practices in different states, and an interesting piece by Shyam Sundar ( EPW, May 26, 2012) on how recent version of ESMA in Maharashtra curbs labour rights “ to maintain uninterrupted economic service and attract capital” in pursuit of the logic of globalisation”)

inspection, almost done away with, following guidelines to that effect from the central govt

several activities, specially in IT, EPZs, SEZs, declared public/essential services and exempted from application of labour laws

increasing flexibility even without labour law reform acknowledged in Prime Minister’s Speech in the 44th session of the Indian Labour Conference (14 February 2012):“--- this view (that the labour laws are unduly protective of labour) has lost its importance in recent years as more and more state governments have become considerably more flexible in their approach to labour restructuring and rationalisation”

yet he emphasised the need to take a “critical look at some parts of regulatory framework which unnecessarily hamper the growth of employment, enterprise and industry, without really contributing significantly to labour welfare”

…contd

Judiciary which in the past has zealously protected the rights of labour, even to the extent of pronouncing e.g. “an enterprise has no right to exist if it cannot pay minimum wages” (Buckingham and Carnatic (Binny) Mills Case, 1951; Reptakos, Brett and Company case, 1992) has become not only flexible, but even apathetic to the cause and rights of labour, quite often clearly under the influence of neo-liberal economic thinking.

Some examples of Supreme Court (SC) Judgements where increased competition in the globalised world seems to have influenced the verdict

contd…

(i) Tamil Nadu Government Employees Strike case (2003) “There is no fundamental/legal/statutory right to resort to or to go on

strike” Even though, directly refers to the government employees (who are paid from

public exchequer), the tenor of the judgement is wider, could be applicable to all workers

Quotes with approval earlier judgement of the Constitutional Bench (CB) of SC (2003) “for just or unjust cause, strike cannot be justified in the present day situation” (emphasis added)

(ii) Karnataka Government appeal against the judgement of Educational Appellate Tribunal order to set aside the dismissal of a lecturer who hit the Principal of a College with a chappal, upheld by SC (Bench of two judges, December 2005)

Indiscipline to be curbed with an iron hand “In view of the change in economic policy, it may not now be proper to

allows employees to break discipline with impunity” (emphasis added). Was it proper earlier?

contd…

…contd

(iii) Karnataka Government appeal against KHC judgement to regularise daily wage employees working for 10 years or more, upheld by SC (5 judge SC Bench, April 2006)

“There is no right to regular employment for those who have been given employment on a daily basis”

“Government closing down departments due to financial constraints and streamlining administration not obliged to reemploy those losing their jobs”

recognising the need for flexible labour laws and downsizing of the government-tenets of neo-liberal economic policy

(iv) Appeal of VB Gadhre and others against the High Court order setting aside an award by labour court to reinstate eight employees dismissed by Gujarat Ambuja Cement, but ordering a retrial, rejected by SC.Supreme Court asked High Courts and Trial Courts not to show misplaced sympathy to workmen in labour cases, as there is no room for misplaced compassion in today’s competitive world!

contd…

…contd

(v) SC upheld differential duty hours (6 ½ and 7 ½ hrs) for similar workers (typist-cum-computer clerks) appointed before or after a date (Nov. 1, 1998), agreeing with HC judgement and rejecting writ petition by Transport and Port Workers Union against Mumbai Port Trust (December 2010)

“In the modern world, businesses have to face competition with other businesses. To do so, they may have to have longer working hours and introduce efficiency while avoiding labour disputes. Looked at this point of view, the classification in question is clearly reasonable”

“The court must not embarrass administrative authorities and must realise that administrative authorities have expertise in the field of administration which the court does not”

…contd

contd…

(vi) Writ petition of Anand-Bazar Patrika Pvt. Ltd (publishers of Anand Bazar Patrika and the Telegraph) challenging Wage Board recommendations for newspaper industry, admitted. (June, 2011)

Petitioner’s arguments: Appointing Wage Boards to fix wages a “violation of right to carry on business”

If upheld, will it imply that the government has no right to regulate wages? Minimum wages?

…contd

erosion of basic rights, a danger signal for democracy, equity and social harmony

role of civil society and academics: campaign and advocacy