Striking a chord with workers

Newspaper reports say that the Government is seeking the consent of the Cabinet on the two Codes — Code on industrial relations (CIR) and on wages. The depth and width of marketisation of economic transactions as a result of globalisation and its impact on business is something that needs to be reckoned with, as much as its adverse effects on workers’ welfare.

The need for business needs to be matched with ensuring workers’ welfare. Towards this, certain principles and suggestions based on the ILO instruments largely can help.

Formalising informality is one of the measures to promote ILO’s Decent Work agenda. Analysts of NSSO data on employment and unemployment have shown repeatedly that a large number of workers (77.1 per cent) do not have written job contract in the labour market and close to 70 per cent do not enjoy social security.

The informality of employment is only rising even as marketisation of business is growing enormously.

Freedom of association and the right to collective bargaining (FoA & CB) are essential aspects of a pluralistic democracy.

As the government is keen to ease regulations including deemed compliances and self-certifications, it must trust the ability of the trade unions to govern themselves and provide basic rules for ensuring functional efficiency of them.

In line with ILO Conventions on FoA & CB the government should ensure complete independence of trade unions including leaving the choice of leaders to workers and aid collective bargaining by providing for a mechanism for choice of negotiating agent.

Further, as the new rules for inspection provide a chance for compliance to violating employers before proceeding to prosecute registration of trade unions should be cancelled subject to such opportunities for corrective action.

Some of the proposed measures seek to pander to the prejudices of employers as in the case of ban on outside leadership. These measures smack of not only paternalism but betray a deep sense of distrust on one of the social partners.

Collective bargaining cannot be effective if the threat of sanctions on both sides cannot be exercised freely and in a democracy right to strike cannot overwhelm the rights of the community and hence there can be reasonable regulations for orderly conduct of strikes including strike ballots.

But such regulations should succeed government’s ability to ensure “bargaining in good faith” on the part of employers. In mature industrial relations, as institutionalisation of social dialogue takes place, conflicts wither away owing to learning effects.

Loss of production due to industrial conflicts underscores the “premature” state of industrial relations. Collective bargaining agreements must be set on par in terms of legality and applicability as that of conciliated settlements and arbitration and adjudication awards — these will go a long way in strengthening bi-partism in India.

The principal objective of the Industrial Disputes Act (ID Act) must be to promote industrial peace and industrial democracy through a combination of methods wherein bi-partism and voluntary arbitration holds place of primacy.

Compulsory adjudication should be used more as a last resort for collective disputes and primarily for individual disputes as a first resort without wasting time in conciliation. Direct resort to compulsory adjudication must exist for all kinds of disputes should the employers violate the principles of FoA & CB as workers need state support.

In accordance with the principles of pluralistic democracy strikes must be defined and regulated on par with lockouts (the proposed definition in the CIR is wider than necessary by including mass casual leave) and penalties for violation of regulations of them cannot be equated in the manner it is proposed.

The Government is quite clear that it means to afford flexibility to the employers despite fierce opposition from trade unions.

The basic principles of regulation on employer-initiated terminations are to prevent unfair dismissals and to provide security to workers. Following the ILO instruments on termination of employment India has a fair system in place but suffer on some aspects. For example, employers complain of prior permission clause and workers the utter lack of social security and any back up plan in case of loss of employment.

The Government’s proposal to raise the threshold of Chapter V-B to 300+ is fine for two reasons. One, as employers say that they no longer depend on this chapter to achieve numerical flexibility and the Contract Labour Act aids them, workers do not seek abolition of contract labour system for fear of consequential unemployment in view of the Supreme Court’s decision in SAIL case.

Two, this is a conservative demand unlikely to cause disproportionate harmful effects on workers and it is a return to original position of 1976. However, this could be granted under certain conditions. One, employers must comply with union recognition and collective bargaining laws, and trade unions must be consulted compulsorily. Two, workers and unions must enjoy right to information subject to controls.

Three, severance pay should be hiked considerably and be based on either preceding or remaining years of service whichever is higher. Four, alternatives such as retraining, relocation within the firm without dilution of service conditions, or alternative firm jobs, etc. must precede retrenchment/closure suitably, i.e. functional flexibility choices should be explored.

The writer is a professor in human resources management at XLRI, Jamshedpur