Basic labour rights under new labour codes

In a predominantly neoliberal economic setting, workers' rights are being curtailed through various means. The entire focus is on minimizing the labour cost and capital constantly searching for cheap-labour destinations. In such a context, the new labour Codes, as conceptualized in India, have the potential of further undermining the basic labour rights in India, particularly in the matter of daily work hours and trade union rights. 

This is part of our special issue on May Day 2022.

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GIVEN the occasion of May Day 2022, let us examine the basic workers' rights prevailing in India, particularly in the context of the formulation of the four new labour codes. These four codes are merging 29 existing labour laws under four broad categories: wages, social security, industrial relation, and occupational safety, health and working conditions.

Here, we will examine two basic labour rights, namely the eight-hour work day, and trade union rights. The first is provided under the Code on Wages, 2019, and the second one is provided under the Industrial Relations Code, 2020.

Daily work hours under Code on Wages 2019

In recent times, there has been chatter in the public domain and media in general that India will have a four-day workweek as and when the labour code, particularly Code on Wages 2019, comes into operation. Let us examine to what extent this is possible under the Code.

Daily working hours are provided under Section 13 of the Code on Wages 2019. Section 13(1) reads as follows:

13. (1) Where the minimum rates of wages have been fixed under this Code, the appropriate Government may —(a) fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals;

Subsequently, the number of hours of work was fixed under Rule 6 of the Draft Code on Wages (Central) Rules, 2020 published in July last year. Section 6 of the draft Rules read as below:

6. Number of hours of work which shall constitute a normal working day. — (1) The normal working day under clause (a) of sub-section (1) of section 13 shall be comprised of eight hours of work and one or more intervals of rest which in total shall not exceed one hour.

(2) The working day of an employee shall be so arranged that inclusive of the intervals of rest if any, it shall not spread over more than twelve hours on any day.

…

(4) Nothing in this rule shall be deemed to affect the provisions of the Factories Act, 1948 (63 of 1948).

Section 13(1) of the Code read with Rule 6(1), (2) and (4) of the draft Rules implies that actual working hours in a day cannot be more than eight hours. It is another matter that spread-over, including rest period and overtime, can extend to 12 hours but regular working hours are fixed at eight hours. A 12-hour spread-over would include rest hours and overtime. No worker is allowed to work more than five hours without a break of at least half an hour, as per the Factories Act, 1948. That means a maximum 12-hour spread-over will include at least half an hour of rest.

The contention of a four-day week emerges on the premise that the daily working hours would be 12 hours and the total working period in four days would be 48 hours. The Factories Act stipulates 48 hours of work in a week. If 48 work hours can be reached in four days, the rest three days can be paid holidays.

However, setting a daily 12-hour workday is not legally feasible under the Code on Wages and the draft Rules framed thereunder. Daily working hours are stipulated at eight-hour only. Spread-over can extend to 12 hours. But daily work-hour and spread-over are not the same. This confusion is created because work-hour and spread-over were taken to be synonymous, which they are not.

Daily work-hour and weekly work hours in the Code on Wages remain in existing laws like the Minimum Wages Act, 1948 and the Factories Act. The only change that gets affected is regarding the spread-over limit. The existing spread-over is a maximum of ten and a half hours, which is now extended to 12 hours under the new Code. That seems to be creating confusion and giving rise to the misperception of a four-day workweek.

Here, it can be mentioned that the daily eight-hour work schedule is something that is universally applied and is regarded as one of the basic labour entitlements. Stretching it to 12-hour work would violate international standards, and is also not provided in the Code on Wages 2019 and draft Rules framed thereunder. What is being claimed in the news media and public domain in recent times is misleading and legally not tenable.

However, there remain possibilities that employers would deliberately misuse the 12-hour detention option and make the workers work beyond the stipulated eight hours. It is likely that certain employers would take advantage of such an expanded window and reduce three shifts to two shifts. Given the exploitative nature of Indian employers and labour market imbalances, where supply far exceeds demand, hours of work, including spread-over, should not exceed more than ten and a half hours. 12 hours will detain the workers unnecessarily and provide scope for rampant misuse. Already, in a number of instances, three shifts have been converted into two shifts for all practical purposes.

Also read: New Code on Work Conditions: Should a Workweek have Four Days or Six?

Trade union rights under the Industrial Relations Code, 2020 

Now, let us look at the trade union rights as provided in the newly enacted Industrial Relations Code.

The Code has several proposals to rationalise the range of regulations that govern the formation and rights of trade unions. The core proposal is to centralise the power of the Registrar in granting registration of trade unions. The grounds for the cancellation of registration of trade unions by this Registrar are markedly broadened. The most glaring example is the section on 'Strikes and Lockouts' (Section 62). The Code effectively extends the barriers for striking by essential service employees to all employees, thereby making strikes legally non-tenable.

The Code has further introduced provisions that have huge repercussions on the relative bargaining power of trade unions within a structure where participation in bargaining forums depends on recognition accorded by the employer. The Code has, to a great extent, sanctified the unitary trade union regime by specifying that if a trade union has fifty-one per cent or more membership, it becomes the sole bargaining agent. Smaller unions are excluded from the negotiation process in such instances.

Section 14(2) of the Code states that "where only one Trade Union of workers registered under this Code is functioning in an industrial establishment, then, the employer of such industrial establishment shall recognise such Trade Union as the sole negotiating union of the workers."

Section 14(3) states that "[i]f more than one Trade Union of workers registered under this Code is functioning in an industrial establishment, then, the Trade Union has fifty-one per cent. or more workers on the muster roll of that industrial establishment, verified in such manner as may be prescribed, supporting that Trade Union shall be recognised by the appropriate Government or any officer authorised by such Government on this behalf, as the sole negotiating union of the workers."

The implication of section 14(3) is that if there exists one big trade union (having fifty-one per cent or more membership share), other smaller trade unions will become redundant as those would not be recognized by the employer. Collective bargaining will remain worryingly unitary as one big trade union will be the sole bargaining agent in all tripartite talks. Smaller trade unions will not get the opportunity to grow and prosper.

Trade unions usually take time to grow within an organization. During the formation period, a trade union has fewer members. With time and through greater mobilization, membership grows. Mobilization happens through advocating workers' rights in bargaining forums and pushing agenda that enhances compensation and welfare entitlements.

Now, under section 14(3), smaller trade unions will not get the opportunity to participate in the bargaining process, and will be denied the subsequent opportunity of expanding their base. This implies that the bigger trade union, being the sole bargaining agent, will monopolize the trade union rights and continue to exist, even if it is unable to protect workers' rights.

Also read: Draft Rules on Trade Union Recognition and Activities are arbitrary and unreasonably restrictive

In labour administration, particularly in industrial relation parlance, the majority view has never been taken as the only view. Decisions are taken on the basis of consensus rather than the majority view. There is an extensive ecosystem in the form of social dialogue and tripartite consultation that define the industrial relation landscape in India. It thrives on multiplicity and diversity of views. Existing legislation on industrial relations is characterized by multiplicity and diversity, and even minority views are adequately taken care of. Relatively smaller trade unions also get the opportunity to express their opinions in collective bargaining and influence the outcome. This will no longer be there once section 14(3) takes effect.

In recent times, there are instances where an industrial organization is having one trade union which is not affiliated with any existing mainstream national/state trade union. These are apolitical trade unions rooted in that particular unit and formed by insider workmen. The formation of such a unit-specific trade union is facilitated by the management itself. Such trade unions act in close connivance with the management. Concerns of such trade unions are limited to specific issues pertaining to the respective units only. An ideal example of such management-propelled trade unionism is that of the Honda Factory in Greater Noida. It is the only trade union in that unit, and with more than ninety per cent membership. It works in close association with the management. The introduction of provisions as postulated in section 14(3) will provide further impetus to this existing trend.

A recent International Labour Organization report notes, "Although trade union numbers are quite high in absolute numbers, the tendency to effectively bargain is quite low due to a lack of statutory support to promote collective bargaining in India". It is difficult to form a trade union in present circumstances. There are hardly any trade unions in the IT industry, which has witnessed massive retrenchment during the last three years. The automobile sector has also experienced turbulence in trade union activities in the recent past. Overall, trade unions in India are finding it difficult to remain relevant in a pre-dominantly neo-liberal production regime, which gives priority to ease of doing business rather than safeguarding workers' interests and rights.

Certain provisions in the Code on Industrial Relations, like Section 2(zk) pertaining to the definition of 'strike', Section 62(1) pertaining to the prohibition of strikes and lock-outs, and Section 14(3) pertaining to criteria for recognition as sole bargaining agent, have far-reaching impact on the manner of formation, growth and functions of trade unions in the years to come. The informal sector constitutes the overwhelming part of the labour force, where union penetration is already at a low level. Even within the organized sector, trade union bargaining power is getting weakened. The Code on Industrial Relation is expected to further exacerbate this process in the coming days.

Also read: Trade Union Recognition (Central) Rules, 2021 – A Critical Analysis and Some Recommendations – Part I

Conclusions

The right to an eight-hour work period in a day, and the right to organize trade unions and participate in the collective bargaining process, are considered basic labour rights. In a predominantly neoliberal economic setting, workers' rights are being curtailed through various means. The bargaining power of the trade unions is also declining over time. The entire focus is on minimizing the labour cost and capital constantly searching for cheap-labour destinations. The world of work is witnessing the proliferation of non-standard and precarious employment.

Under such a context, the new labour Codes, as conceptualized in India, have the potential of further undermining the basic labour rights in India, particularly in the matter of daily work hours and trade union rights.

(This is an updated and amalgamated version of the author's previous writing on this issue for Eleventh Column and Newsclick.)