Hard-won labour rights have receded in the face of new labour laws to promote ‘ease of doing business’, informalisation of work, and the trappings of the start-up culture in India, writes Maya John.
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May Day began to be commemorated in India 101 years ago. The first programme, organised in the city of Madras on May 1, 1923 is credited to M. Singaravelu Chettiar, who was a towering nationalist figure, and an early communist associated with the anti-caste movement.
By introducing May Day in India, Singaravelu sought to draw on a rich tradition of May Day celebrations that existed in many parts of the world; thereby connecting the struggles of Indian workers to the larger international level resistance of labour against brutal exploitation and dehumanisation.
What began with a workers’ rally in Chicago in May 1886 created a momentum that reached Indian shores by 1923.
This year, May Day coincides with India’s eighteenth general election. Amidst the dust and din of election campaigning, political parties remain evasive about labour issues, reflecting a general consensus in favour of pro-capital policies. Against this backdrop, “Modi ki Guarantee, Shramik Sammaan” (2024) rings hollow, for it continues from the same trope in 2014 wherein the Bharatiya Janata Party (BJP) sought to foster a “harmonious relationship between labour and industry”.
What began with a workers’ rally in Chicago in May 1886 created a momentum that reached Indian shores by 1923.
The approach essentially amounts to labour being reduced to passivity so that the ruling elites can “make India a hub for cost-competitive labour-intensive manufacturing” (BJP Manifesto, 2014).
Taken together, this so-called harmonious labour–capital relationship combined with labour–intensive manufacturing simply amounts to the overexploitation of labour so as to keep the cost of production low.
In this regard, the ruling party stands committed to doing everything which removes any hurdles to the ‘ease of doing business’. Hence, their concerted effort to put an end to labour law as we have seen it for most part of the twentieth century.
Labour, which creates the economy— from a needle to skyscrapers— gets very little in return. As a civilisation, we were confronted by labour’s immeasurable suffering during the Covid pandemic and ill-fated lockdowns.
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However, the precarity persists unabated. Yet, the working masses continue to remain in the margins of public discussion. In trying times such as these, the tradition of May Day proves even more relevant and potent, especially if we seek to go beyond Modi’s smokescreen of “sabka vikas”.
History labour made
Of the many universal working-class demands associated with the tradition of May Day, and against which we can objectively assess the present predicament of labour, is demand for legalisation of an eight-hour workday.
Emerging from within working-class platforms and organisations in Europe and America in the nineteenth century, such as the International Workingmen’s Association, the demand for the eight-hour workday came to be seen as a preliminary condition, without which efforts to emancipate the working class would prove futile.
As aptly expressed by Karl Marx (Das Kapital): “By extending the working day, therefore, capitalist production … not only produces a deterioration of human labour power by robbing it of its normal moral and physical conditions of development and activity, but also produces the premature exhaustion and death of this labour power itself.”
As the labour movement unfolded and finetuned its critique of capitalism, there emerged a steady realisation of the need to establish a common day for the assertion of non-negotiable labour rights and for commemorating important labour struggles.
By 1890, the Second International had adopted the resolution for a worldwide struggle on the issue of a universal eight-hour work day. At the turn of the twentieth century, the May Day tradition was fairly entrenched with workers’ political organisations and trade unions stopping work wherever possible, and using the occasion to energetically demonstrate on universal working-class demands.
By then, an entire discourse had crystallised which emphasised the fact that although the wealth of the economy is a creation of labour, the entitlements of labour in the economy are negligible.
For all the long hours of work and physical exertion, what labour gets in return is simply poverty, precarity and powerlessness.
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It is precisely in opposition to such predicaments that labour’s defence of shorter hours of work emerged with distinct clarity. The eight-hour workday challenged not only the internal logic of the capitalist economy to overwork a few, but also exposed the resultant problem of rampant unemployment and deterioration of workers’ health.
Hence, an integral component of the spirit of May Day has been the assertion that overwork and unemployment are two sides of the same coin. Labour’s evolving critique of estranged labour came to vigorously argue against the encroachment on a large part of the day by lengthy work hours, which denied many regular employment, and at the same time deprived employed workers of the hours which they could otherwise utilise for politics, spending time with friends and family, leisure and basically to enjoy life as human beings.
The early twentieth century in India was characterised by the precarious condition of labour, which had been greatly enhanced by years of colonial rule. Projecting the work relations between employer and employees as a ‘private’ matter of contract, the colonial State refrained from the task of regulating them.
Private regulation of the work arrangement, and correspondingly, the private power of employers to determine hours of work, wages, etc., were the entrenched order of the day.
The approach essentially amounts to labour being reduced to passivity so that the ruling elites can “make India a hub for cost-competitive labour-intensive manufacturing” (BJP Manifesto, 2014).
However, the advent of colonial capital paved the way for new kinds of workplaces, such as factories, plantations, mines and dockyards, where large numbers of workers were mobilised under exploitative work arrangements.
The assemblage of large numbers of workers at crucial points of the capitalist value creation chain, and the visible collective mobilisation of workers against their exploitation triggered among official circles the growing recognition of the myriad problems with ‘private’ regulation as well as a certain degree of receptivity to constituting employer–employee work relations within the ‘public’ domain of social relations.
By the time Singaravelu introduced the tradition of May Day in India, the ruling elites had been rudely confronted by unfolding circumstances that cautioned them as to the political import of workers’ issues.
The horrors of the First World War and the appended radicalisation of labour had facilitated worker-led revolutions in Europe, as well as numerous militant strike waves in India’s industrial centres.
Thus, in order to placate, in particular, organised labour and labour militancy, governments and post-War international institutions of diplomacy sought to install a uniform standard for labour rights.
Significantly then, the first international treaty to mention the eight-hour workday was the Treaty of Versailles, which in the annex of its thirteenth part established the International Labour Office, now the International Labour Organisation (ILO).
Given the spectre of world revolution that loomed large, it was no coincidence that the eight-hour workday was the first topic discussed by the ILO, culminating in the Hours of Work (Industry) Convention, 1919.
Law’s labour lost
Since then, an expansive corpus of labour laws has evolved in India. Nevertheless, it is only a small corpus of employer–employee work relations, associated largely with the formal sector, that has been governed by the country’s labour laws, and thus, subject to State regulation.
The present conjuncture, of course, is characterised by a renewed offensive attack on labour by capital. While it is a fact that the country’s corpus of key labour laws continues to elude workers of various kinds of industrial and commercial establishments, capital has nonetheless aggressively been pressing for reforms.
Its endeavour has been to push for reforms in the laws that offer some ‘protective’ cover to the workforce of ‘larger’ establishments. Consequently, the dominant policy discourse has increasingly come to assert that labour laws covering the workforce of larger establishments constitute fetters to better employment practices due to the purportedly ‘high’ levels of regulation they facilitate, which tend to prevent alterations in the use of labour in enterprises.
This, in turn, has been used to explain the hesitation of employers to expand production, and thereby, the scope of employment. In other words, the ‘protection’ of existing jobs is seen as affecting the creation of ‘future’ employment. Increasingly, even government reports have given traction to such a perspective; shifting a lot of the blame for ‘slow’ growth in industrial production and ‘low’ foreign direct investment (FDI) onto ‘inflexible’ labour markets.
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This current policy ecosystem, dominated by private capital’s accusations of an inflexible labour market in India and appended claims for ‘ease of doing business’ and ‘simplification’ of employers’ compliance with the law, warrants closer scrutiny.
The projected lack of labour market flexibility in India is an untenable claim, given the high levels of employment of contract labour in all kinds of industrial and commercial establishments, high labour turnover, extended overtime put in by a majority of workers, the growing size of the informal sector, creation of special economic zones, the pattern of high-skilled workers entering lower-skill segment jobs, as well as the presence of a weak trade union movement which is unable to prevent retrenchment.
Labour, which creates the economy— from a needle to skyscrapers— gets very little in return.
Moreover, despite the virulent propaganda by foreign and Indian capital that the Indian State has failed to deliver and India’s labour laws are restrictive and obsolete, adequate flexibility and innovation have steadily been introduced into the system of labour regulation through executive Orders of the Union and state governments.
Importantly then, even prior to the enactment of the four labour codes by the Modi government between 2019 and 2020, there was a wave of piecemeal endeavours by which state governments chipped away at key labour laws under the authority granted to them in the Concurrent List within which labour falls.
In this way, the 1990s and early 2000s have seen periodic amendments to the Industrial Disputes Act, 1947, the Factories Act, 1948, the Industrial Employment Act, 1946, etc., by several states, as well as a slew of executive Orders passed at the state and Union levels in the bid to attract foreign and domestic investment. The labour codes simply constitute de jure recognition of these earlier interventions.
Notably, the bulk of amendments has concentrated on introducing self-certification of employers’ compliance with labour laws in ‘small’ and ‘micro’ industrial establishments, and the exemption of these establishments from the ambit of crucial labour laws.
In 2014, for example, the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988 was amended to change the definition of ‘small’ establishments so as to cover units employing up to 40 workers.
The original piece of legislation defined the threshold limit as up to 19 workers. Now, of course, with the Central Acts being modified and superseded by the new labour codes, many of the protections offered by the law to workers of larger establishments also stand withdrawn.
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To elucidate, the four labour codes introduced by the Modi government substantially revised the pre-existing thresholds which were used to earmark the ambit of labour law enforcement; namely the size of an establishment’s workforce.
The Industrial Relations Code, for instance, allows establishments employing up to 300 workers to lay off and retrench workers or close units without prior approval of the government, thereby pushing out a large section of workers employed in numerous medium-sized enterprises from the ambit of industrial disputes legislation. Earlier this threshold was 100 workers.
Likewise, the codes categorically double the threshold for the applicability of the Factories Act, 1948, i.e., from 10 to 20 workers where an establishment ran on electricity, and from 20 to 40 workers here a unit ran without electric power.
Even the threshold specified in the Industrial Employment (Standing Orders) Act, 1946, by which an establishment with at least 100 workers was mandated to formally define employment conditions has been enhanced to 300 workers.
The Occupational Safety, Health and Working Conditions Code, meanwhile, increases the threshold limit of contractor–employed workers from 20 to 50 while allowing the hiring of contract workers in all areas, including core production.
Return of colonial precarity
These new threshold limits in the labour codes, and the exemptions introduced by earlier labour law ‘reforms’, have further fostered the trend of ‘dwarfism’ within the Indian economy; namely, the rapid growth of start-ups and small-scale enterprises.
Clearly, the given pattern of labour law amendments fits well with India’s existing growth model in which ‘micro, small and medium enterprises’ (MSMEs) enjoy certain leverage.
Consequently, the newly established start-ups as MSMEs are provided enough leeway to evade the law with relative ease. Not surprisingly, owners of small enterprises have come to constitute a large employer lobby in India. As per the Economic Survey of India, 2019, small enterprises employing less than 50 workers have come to constitute almost 46 percent of manufacturing units in the country.
This trend can be traced to how MSMEs are strategically placed in global supply chains as vendor companies to which bigger corporate houses outsource the most labour-intensive work.
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Since reducing the cost of raw materials and capital goods is not easy for manufacturers, considering this would substantially reduce the profits of appended capitalist firms involved in raw material processing, transportation and capital goods production, the owners of MSMEs strive to stay competitive by simply overexploiting their small workforces.
What has made matters worse for labour is that the amendments to statutory labour laws have hastened the process of the State’s withdrawal from the ‘public’ regulation of the majority of employer–employee relations; be it the case of MSMEs, larger enterprises, or myriad informal arrangements in the service sector.
This current policy ecosystem, dominated by private capital’s accusations of an inflexible labour market in India and appended claims for ‘ease of doing business’ and ‘simplification’ of employers’ compliance with the law, warrants closer scrutiny.
The deregulation of a large number of work relations is most evident in the rapid privatisation of the public sector; a major relaxation in labour laws in ‘special economic zone’ (SEZ) enclaves; the watering down of the provisions of labour inspection; the growing paradigm of self-certification by employers of their compliance with labour laws; and the tweaking of many statutory labour laws on occupational safety standards, work hours, minimum wage, compensation, industrial disputes, etc.
The rapid unfolding of deregulation has meant a phenomenal growth of ‘private’ regulation of workplace dynamics. In this regard, the private power of employers to unilaterally fix wages, extract overtime, determine compensation, hire and fire, etc. has increased manifold; returning labour to the colonial precarity of the early twentieth century.
One of the immediate consequences of deregulation includes the continuous reproduction of caste and gender inequalities within work regimes, particularly those associated with lower-segment jobs in the informal sector.
Unorganised informal workers are then simply reduced to being passive recipients of State welfare, while being simultaneously denied their agency to collectively assert and defend their rights.
Such reproduction stems from the fact that there is a large number of women, children and those from socially marginalised communities who are heavily concentrated in informal work arrangements where the State is most conspicuous by its absence.
Another fallout of the growing deregulatory paradigm is the generalisation of the highly oppressive paradigm of work relations typical of the informal sector. In the informal sector where a vast majority of working-class men and women are labouring in labour intensive, lower segment jobs, the absence of public power of the State has nurtured the condition of ‘quasi-judicial’ powers of employers over the work contract.
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Essentially, this power amounts to labour being completely subordinated to the blanket authority of the employer. In other words, in the privatised domain of the workplace, the employer’s writ runs large. Now, of course, such enhanced oppressive private power of employers with respect to the work contract has increasingly become the norm across a large part of the formal sector as well.
The concerted attack on higher segments of the labour market tends to have a spillover effect on the lower rungs labour market where informal workers are exposed to exceedingly higher levels of exploitation as a result.
The possibility of this looms large, given that the enhanced deregulation of work relations translates into periodic unemployment of higher-skilled workers, who are then compelled to crowd lower-skilled, informal sector jobs.
Subsequently, the existing informal workforce— predominantly women and other workers of socially marginalised communities— shall be compelled to negotiate their own survival through lowering of wages, longer spans of overtime, enhanced quantum of work, and so on.
The new threshold limits in the labour codes, and the exemptions introduced by earlier labour law ‘reforms’, have further fostered the trend of ‘dwarfism’ within the Indian economy; namely, the rapid growth of start-ups and small-scale enterprises.
The retreating presence of State regulation from the world of work, the concomitant rise in private power of employers, and the long working hours that are characteristic of our present times affect women disproportionately.
They juggle the double burden of dismal working conditions, low and stagnant wages on the one hand, and a huge quantum of housework on the other. This apart, it is a vast number of labouring women who are excluded from the purview of crucial labour laws that regulate the most fundamental aspects of the work relation.
These include the lakhs of women employed as paid labour in agriculture and as ‘community workers’ under various schemes and programmes run by the Union and state governments.
Community workers such as ASHAs, Anganwadi workers and helpers, etc., are not even identified as ‘workers’. The same elusiveness of status pervades the paid domestic work industry, the third largest employer of female labour.
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In this case, the lack of State regulation is driven by the logic that the private home of an employer does not map down to an identifiable workplace. Correspondingly, domestic workers have long been excluded from the ambit of most statutory labour laws.
Needless to say, the inclusion of informal, largely unorganised workers under welfare schemes has often been showcased by governments, including the present ruling dispensation, to draw attention away from the marked exclusion of the same workers from many statutory labour laws.
The present circumstances indicate the tragic return to colonial precarity that has accompanied the larger retreat of the public presence of labour.
What is concealed is the fact that existing welfare legislation for informal workers restricts State intervention to social security, allowing the State to sidestep the need for active regulation of their work relations.
Unorganised informal workers are then simply reduced to being passive recipients of State welfare, while being simultaneously denied their agency to collectively assert and defend their rights.
In more specific terms, the rapidly unfolding context of deregulation, backed by persistent criminalisation of the labour movement, obliterates the collective force of labour from ensuring the implementation of welfare legislation; thereby rendering the alleged extension of social security as unattainable for the larger section of workers.
The present circumstances indicate the tragic return to colonial precarity that has accompanied the larger retreat of the public presence of labour.
While spirited workers’ struggles exist, these prove fleeting and sporadic. The rich are not afraid of the labouring poor— a marked contrast to when workers’ inalienable rights were shaping international-level treaties and peace settlements. Labour which creates the economy, and civilisation along with it, needs to create a future for itself.
