A closer engagement with the new labour codes can reinvigorate India's workers' movement while providing much-needed solace to the unorganised sector, writes Shyam Sundar.
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GREAT episodes such as May Day reflect the actual and potential struggles for labour rights both at the macro-systemic level even as they define the polemic nature of capital–labour relations.
For the working class movement, the State is at once a friend and a foe. It is essentially capitalistic yet is an agency for realising labour rights mostly in response to sustained and global (read systemic) struggles, often bloody.
In a sense, for labour, the State is the granter of labour rights and privileges. On the other hand, labour discovered that the State is not a trusted ally as it seeks to collect and protect its political electoral power. This paradoxical relationship needs to be understood when one speaks of labour rights.
Labour rights have substantive and procedural aspects. They can be legislated but would not be realised for want of complying with the procedure, say registration.
In the case of organised workers, the government, employers and trade unions take care of the procedural aspects of ensuring labour rights. This is far truer in the case of rights concerning unorganised workers. They primarily depend on State agencies. For them, legislation and labour administration together ensure labour rights.
In another sense, the vast majority of unorganised workers who outnumber organised workers rely on the State for crumbs of several forms of security, from social to existential securities.
“For the working class movement, the State is at once a friend and a foe.
So two segments of the working class, viz., the organised and the unorganised workers, rely on the State for labour regulation to grant and protect their rights (say via judiciary).
In the case of organised workers, there typically exist employer–employee relations and the State's role ranges from an umpire to an adjudicator of labour rights. But in the case of unorganised workers who may be self-employed, wage employees, or those whose status is yet to be judicially or legally delineated (say platform workers) the State is highly relevant.
Historically, labour institutions such as labour laws (of the State) and trade unions have been blamed for the condition of labour. The reform debate during the command economy primarily surrounded organised workers and the organised sector.
Issues such as compulsory adjudication, trade union recognition, wage policy, etc., were debated yet without concrete outcomes. Unorganised workers remained either partly visible (with some welfare boards at the Union level and in some states such as Kerala) or invisible.
Labour laws covered and uncovered through the thresholds in them. Conservative thresholds for application of labour regulations have prevailed since their enactment and they excluded millions of workers.
Labour laws grew but covered either short spaces (little coverage) or the same spaces widely (wider coverage, e.g., the Employers State Insurance Act, 1948).
Trade unions fought many a bloody battle for domination in the same small space called the organised sector. They seek to occupy premier industries even if it means ousting existing trade unions.
Hence, even as the number of trade unions grew, the union coverage or union density remained almost the same. For both trade unions and the State, exclusion dominated rather than inclusion. However, unorganised workers did not enter the reform discourses during the command economy as widely as they do now.
The issue of labour institutions has resurfaced in the post-reform period. The mainstream economic and political theories argue that State intervention in the labour market is not suitable in a globalised economic context.
They call for reforms of labour laws and the labour inspection system. The reform debate shifted from the industrial relations system (reform of compulsory adjudication, right to strike and collective bargaining, wage policy, etc.) to labour market regulation (hire and fire, contract labour, etc.).
Specifically, labour regulations and labour inspection systems constitute undue intervention by the State and produce inefficient and even inequitable labour market outcomes such as inequality within the working class, high unemployment and so on. Hence, the State must exit the organised labour market.
However, in the case of workers who do not have formal employer–employee relations, the State is the default economic actor to address their problems.
While labour regulation figured more than its due in the labour market discourses, the unorganised sector increasingly became visible to all the agencies including the trade unions.
“For labour, the State is the granter of labour rights and privileges.
Unorganised workers provide a 'big market' for membership for the trade unions as their traditional membership base was dwindling thanks to globalisation. So the State and trade unions are inevitable in realising labour rights in their case.
Since 1991, the State, irrespective of the colours of the political parties in power, has sought to introduce privatisation, liberalisation and globalisation of the economy.
Following the recommendation of the Second National Commission on Labour (SNCL), during the last few years, the Union government has enacted four labour codes, viz., the Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Code on Social Security. All these codes, with the exception of the Industrial Relations Code, concern the welfare of unorganised workers.
The Code on Wages provides for universal access to statutory minimum wages. Under the Minimum Wages Act, 1948, the government picks up industries or occupations in a piecemeal manner and notifies them as 'scheduled employments' eligible for minimum wages.
Hence, the coverage varies across the States and industries. This method was more exclusionary. This serious shortcoming was cured by extending statutory minimum wages to all workers. This reform measure will benefit millions of unorganised workers.
“The vast majority of unorganised workers who outnumber organised workers rely on the State for crumbs of several forms of security, from social to existential securities.
The Occupational Safety, Health and Working Conditions Code covers the unorganised sector and workers as the code subsumes the Building and Other Construction Workers Act, 1996, the Beedi and Cigar Workers Act, 1996, the Inter-State Migrant Workers Act, 1979 among others.
The code defined migrant workers to include voluntary migrant workers and those migrating through contractors. Earlier, the Inter-State Migrant Workers Act, 1979 excluded migrant workers. This serious defect has been taken care of by including them under the definition of migrant workers.
The code has liberalised the erstwhile Contract Labour (Regulation and Abolition) Act, 1970 by removing the contractors employing less than fifty workers and allowing contract labour not only in peripheral but also core activities subject to some conditions.
Trade unions criticise this measure as aiding contractualisation of workers which means sub-optimal working conditions. However, the government and certain economists see this as an incentive to create employment.
The code requires the Union and state governments to collect, compile and analyse occupational safety and health statistics, to collect and maintain a database or record of migrant workers.
Migrant workers can self-declare and register themselves using the Aadhar card. This procedural aspect is important to enable the realisation of the rights of migrant workers.
The Code on Social Security contains the most important provisions pertaining to unorganised workers, both traditional and modern (i.e. platform and gig workers).
Unorganised workers include home-based workers, self-employed workers or wage workers in the unorganised sector and those in the organised sector not enjoying employment and social security. They also include gig and platform workers.
“Trade unions fought many a bloody battle for domination in the same small space called the organised sector.
Chapter IX of the code includes provisions for extension of social security to unorganised and gig and platform workers. It provides for the creation of facilitation centres to enable registration of unorganised workers and their enrolment in the relevant social security schemes.
This is another huge procedural aspect of labour rights. The Union and state governments are required to provide all kinds of social securities to the registered unorganised, platform and gig workers as provided for in the code.
Even though the four labour codes have serious shortcomings and are incomplete, they contain important welfare provisions for unorganised workers.
The State not only enacts the codes but also has tremendous procedural responsibilities to cater to the welfare of the unorganised workers. Universal minimum wages and social security apart from other benefits would enhance the welfare of the millions of unorganised workers.
The government has developed the E-Shram portal for creating a national database of unorganised workers, which will be seeded with Aadhaar. As of April 23, 2024, 295.54 million E-shram cards have been issued to unorganised workers.
This number is far from the estimated 400 million plus unorganised workers. It covers various occupations such as agriculture, domestic and household workers, construction workers, apparel workers, etc.
There is no information as to the construction of the database concerning migrant workers, platform and gig economy workers, etc.
The Bharatiya Janata Party's manifesto for the 2024 general elections explicitly states that the party "will reach out to migrant workers and empower them to avail benefits of various programmes that they are eligible for".
How will it reach out to migrant workers if it does not have the database? Are we going to witness a repeat of the Covid story of the absence of a relevant database?
Covid-led crises in the labour market showed historical deficits in the labour market governance and portrayed the State as insensitive, irresponsible, and inadequate.
Coming back to the labour codes, the Union government published draft Rules under the four labour codes for inputs from all concerned with them.
“The BJP's manifesto for the 2024 general elections explicitly states that the party "will reach out to migrant workers and empower them to avail benefits of various programmes that they are eligible for".
Many State governments also did the same. However, the labour codes have not been implemented as the Union government did not notify the Rules in the official gazette even though the Parliament passed them long ago.
More importantly, the Rules framed by the state governments differ glaringly on the same substantive clause in the mother law due to a lack of coordination by the Union government.
Laws have no relevance if the Rules under them are not framed and notified. Rules framed by the state governments are chaotic and differ across States. There is no coordination either by the Union government or by the state governments themselves.
Trade unions must for their own sake intervene in a studied and careful manner to cure this silly but important defect.
There is another political economy reason. Much of the core labour law reforms such as raising the thresholds for hire and fire and those for the factory legislation and contract labour act, liberalisation of inspection systems, and increase in the hours of work under the Factories Act, 1948 have been carried out in many states.
Regional governments have introduced reforms concerning labour inspection. If interrogated, the Union labour minister gets away by saying that "labour is on the Concurrent List".
Central trade unions are fiercely fighting against these reforms at the national level, but their struggles at the regional level have not been strong enough to defeat the regional government's move to reform, save in Maharashtra at times. The organisational energies of the working class must be carefully reallocated as fighting on hire and fire is merely symbolic.
While the labour codes are doubtlessly badly constructed and defective in many ways, they promise two substantive global labour rights, viz., universal minimum wages and social security, which have not been realised owing to the non-implementation of the labour codes.
Rules, database, registration, etc. are integral to the realisation of these two labour rights as for others. If not taken care of, this will hurt the vital interests of the unorganised workers. Defective labour market governance is historical and applies to all political parties.
May Day 2024 is all about lost opportunities to secure two universal labour rights concerning unorganised workers.
More importantly, the working class must resort to all forms of agitations including legal to ensure that the procedural aspects to realise core labour rights are effectively implemented.
In a historical sense, no one, not even trade unions, have bothered to interrogate the government on the non-implementation of labour laws relating especially to unorganised workers.
“May Day 2024 is all about lost opportunities to secure two universal labour rights concerning unorganised workers.
Trade unions simply failed the vast millions of unorganised workers. There cannot be a repeat of the Inter-State Migrant Workers Act, 1979 and the Unorganised Workers Social Security Act, 2008!
There is also a need for efforts to streamline the Rules under the labour codes across the states so that the working class realises its legislated rights.
In sum, the labouring class can continue to fight for substantive rights such as formal and decent jobs but the latter is complete only when workers realise the rights.
So, this May Day, trade unions and other civil society organisations must resolve to fight for efficient compliance with the procedural aspects mentioned in the codes. Strikes and litigations on these issues will enjoy tremendous public legitimacy.