After announcing the withdrawal of three farm laws, Prime Minister Narendra Modi now reportedly plans to defer until next year the implementation of another contentious “reform” – the four labour codes.
The Union government missed several deadlines to formally enact the codes, even though the Parliament passed them back in 2019 and 2020. The labour codes would make it easier for businesses to hire and fire workers.
Much like the contentious farm laws, the labour codes too were railroaded through the Parliament without any rigorous pre-legislative deliberation, neither with workers nor trade unionists. More than 10 major trade unions demanded the scrapping of the labour codes, alongside the repeal of the farm laws.
It has been argued that India’s labour laws have been a key hindrance for business expansion. The herculean task of legislatively recasting them would receive much applause, only if the process of doing so involved considerable deliberation and reasonably accommodating workers’ concerns. Instead, the codes are seen to be pushing corporate interests.
Despite India having ratified the International Labor Organisation’s convention number 144 of 1976 on tripartite consultation between governments, employers’ and workers’ organisations, worker-centric groups were not consulted on the codes. This despite the fact that the government consistently claimed that the attempt at codifying the various labour laws would lead to simplification and universalisation.
In reality, each of the four codes has critical anti-labour amendments. The governmentality applied behind amending these appear to resonate more closely with the colonial British state.
Take the Code on Social Security, 2020. The Code has almost a hundred definitions. To understand who is covered by what kind of social security is difficult, even with the help of experts.
Social Security, available in the form of provident fund, employees’ state insurance, and employees’ compensation and gratuity, is provided for less than 7% of the workforce in the formal, organised sector. The informal space, where more than 90% of Indian workers are employed, has not been covered by this form of social security.
Instead, those working in the informal, unorganised workspace are left to the mercy of the government through welfare schemes, without details mentioned or any confirmed resources made available. The much talked about inclusion of “gig” and “platform” workers comes with the declaration that they are not workers.
The Industrial Relations Code, 2020 has three parts. As Babu Mathew, a professor from National Law School of India University, Bengaluru, explains in Economic and Political Weekly:
“The trade-union part [in the code] introduces a long-pending welcome reform providing for compulsory recognition of trade union/s, but there is little clarity whether implementation will be through the secret ballot method or other methods. Regarding dispute settlement, the new law breaks the backbone of collective bargaining by rendering all strikes and lockouts de facto illegal. There is even a provision for deregistration of a trade union if the code stands violated. And, with respect to standing orders, it is not applicable to any industry employing less than 300 workers, thus leaving service conditions of such establishments to the arbitrary will of managements.”
A closer reading of the Code on Wages, 2019 and Occupational Health, Safety and Working Conditions Code, 2019, too shows there is an effort to codify concentrated control in hands of the employer – and then the state. For example, in matters of fixing minimum wage, overtime and bonus payments, the Code on Wages, 2019, provides no space for workers, or for inputs from any collective group (unions).
The Code replaces four laws (The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976), giving the government a commanding authority in setting the wage structure for companies to follow.
A serious concern here is the abdication of legislative function when the law leaves the criteria for quantification of the minimum wage to the rule-making authority. Even the actual mechanics or rules of setting the wage is not made clear by the government, which causes doubt on how a progressive wage structure will be achieved for the organised working classes across sectors.
Top-down command style
Whether it is on citizenship, land-acquisition, agriculture reform, labour law reforms or even regulating capital markets, the top-down, ad-hoc monolithic command style seen in the Modi-Shah government has spelt constant trouble for all stakeholders, including the government itself.
A law is first railroaded in the Parliament, often passed by voice vote, without debate or pre-legislative deliberation. The Opposition revolts and then, those likely to be affected by the law (farmers, workers and unionists) protest on the streets until the laws are either withdrawn or repealed.
The government, instead of listening to voices of disagreement, in the meantime, spends (or wastes) all its political capital in dismantling the protests, often labelling participants anti-nationals, or worse.
Mainstream media toes the government rhetoric throughout. Anchors in televised studios call any new announcement by the prime minister on a law a “masterstroke” – and use the same word to praise him if she withdraws a law.
Whether it is workers, farmers or land, issues affecting them, the Constution has put them in the state and concurrent list for a reason. Those elected to form state governments or those who are part of a decentralised political ecosystem, alongside civil society members, need to be taken into confidence when issues around factor-market reforms are deliberated or put into motion.
What we unfortunately see is a blatant disregard for basic constitutional values and principles of federalism, in the thirst for pushing an authoritarian governance style with “Chinese-style” characteristics. It will not work in India – and it never has.
Anyone with a reasonable understanding, or close reading on the political economy of reforms in India from the 1970s-1990s, their failures, successes, will say this (see Atul Kohli’s work discussed here).
A historian too, with knowledge of the British colonial state’s attempt at creating a centralised “imperial umbrella” (law, language and knowledge) in India, shall say the same (see Tirthankar Roy’s work discussed here).
Deepanshu Mohan is Associate Professor and Director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University.
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