The State is Abdicating from Regulating Industry :

Dr. Usha Ramanathan on the proposed labour reforms under Modi Government

17th May 2015, Chennai

In a scathing attack on the fresh round of labour rights restricting reforms that are being proposed by the one year old NDA Government, Usha Ramanathan, a professor of law, working on issues of environment, labour and civil rights, maintained that the changes proposed to the labour legislations are a significant step by the Indian government towards abdicating from its role in regulating industry or making them comply to legislations that protect labour rights, wages and working conditions. “The State is saying (to the corporates), I am stepping off, I am on your side. I will cease to be an intruder and become a facilitator” she said in a lecture she gave in Chennai organized by Catalyst Study Circle.

Listing the various changes that are being made to Factories Act, Industrial Disputes Act, Apprenticeship Act and other critical legislations on labour and industry, she pointed out how, apart from diluting various provisions and enhancing flexibility for employers to ‘hire and fire’ workers, the government is also dismantling the oversight mechanism and processes that enable the workers and the State to enforce these legislations. Some of key elements to which she directed our attentions are

A) MSMEs (Medium, Small and Micro Entreprises) have been exempted from various labour laws including minimum wage act, maternity benefits act etc. They are now to be governed by a single code that states that they do follow these standards. But given the lack of process and procedure (that existed in these acts) for workers to complaint and gain redress and with restrictions upon Inspectors to act upon any complaints that they might receive, it is difficult to detect violations or to proceed against them.
B) Along with this is the attempt to make such violations not acts of crime but as a civil dispute between workers and employers. This thus becomes a matter of conciliation rather than of prosecution. It is in this process that ‘Inspectors’ are to become ‘facilitators’, aiding industries to confirm to the new codes rather than investigative agents trying to prevent such violations. The Rajasthan government, which has become a testing space for such labour law dilution, the government has even deemed that once such a conciliation has been brokered, the industrialist would be considered as acquitted.
C) Self-Certification and E-intimation procedures (for closing down operations) are other actions that would decrease oversight and make violations, even grave ones, difficult to identify early enough. Thus we would be in a situation where only a major disaster of the scale of Bhopal would be necessary for us to catch violations but it would have become too late by then.

Together with this are the attempts to alter the apprenticeship act to allow for keeping people in perpetual apprenticeship and effectively converting them as low cost, highly insecure labour. There is also an amendment proposed to increase overtime by 150% from the current 50 hrs over 12 weeks to 125 hours over 12 weeks. This would effectively increase average work duration from 8 hours to 10 hours and in extreme case even 11 hours.

A more sinister design of the present government seems to be its attempt to create a competitive atmosphere among the state governments. By letting certain states adopt these amendments even as they fail to pass the parliament, the Modi government is pitting one state against another in a ‘Race to the Bottom’. While the central government faces tough challenge in the parliament (from the upper house), this method bypasses this hurdle while also allowing the central government to wash its hands.

The Unions have ofcourse reacted strongly to this fresh attempt to curb labour protection, curtail their space for collective bargaining and exempt majority of industrialists from the requirements of labour legislations. They are to decide on a future course of protest including an nationwide general strike on 26th May at a national convention of central trade unions. Dr. Usha Ramanathan said, ‘this time around they (unions) are fighting for survival. They have not even been consulted, while FICCI and CII are getting the agenda fulfilled to the letter. So even the unions that are affiliated to the ruling party have not taken it lightly and have joined in the protest. But we still are unsure as to the specific charter of demands and objections that the unions are raising against the amendments.’

While many of the policies and schemes, with regard to labour law dilution, remains versions of the previous government, Usha Ramanathan feels the centrality of the present set of reforms is the Stepping away of the state from regulating corporates and sending a message to them (however unclear) that in order to facilitate their operations the government would dilute the laws to the extent that workers do not have recourse to administrative or judicial avenues for redress. This coupled with limitations towards unionization and collective bargaining would render the workers with no means to enforce their rights.

In the 1990s, the assault was on the Trade Unions, by calling them as outsiders, corrupt leaders, trying to hamper production growth and industrial peace, severe restrictions were placed on unionization and collective bargaining. Today it is the same rhetoric that is being used against any form of inspection and regulation. The Industry lobbies claim that the 5% of the workforce, who have formalized and secure work are creating impediments for the rest of the 95% who languish under informal working conditions. But the essence of the labour law amendments would rob the 5% of these benefits while allowing industry to exploit labour further. With little accountability to workers associations or to the State agencies, India Inc is effectively left to self regulate and we know that they have been key players in the biggest of scams (like spectrum and coal allocation) to rock India or the gravest of industrial accidents (like Bhopal) in the world. From the discussion with Dr. Usha Ramanathan, it becomes clear that the working class is left to the mercy of the masters of industry and commerce as the State increasingly acknowledges its true allegiance lies with Capitalists.

The discussion was based on an article by Dr. Usha Ramanathan that appeared in the journal ‘Seminar’, May 2015, issue 669;

The full lecture with discussions can be accessed below


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