Enactment of the Amendments to Industrial Employment (Standing Orders) Act and the struggle ahead – Ma Le Theepori

Thozhilalar Koodam Note: An important amendment to Industrial Employment Standing Order Act was passed on July 04, 2016 after the president gave assent to the bill. The amendment ensures that working conditions of precarious workers including trainees, and apprentices are stated by the industrial establishments in their Standing Orders. Further, the Standing Order will have to state the percentage of trainees and other non-permanent workers in relation to total workers in the factories. This article is a translation by Thozhilalar Koodam of an article that was written by Comrade Kumarasami of AICCTU in Ma-Le-Theepori. This article has been slightly changed from the original version for readability in english.

The Amendment to Industrial Standing Order Act(47/2008) was passed unanimously in May 14th 2008 by Tamil Nadu State Assembly. The then DMK Government could not get approval from Central Government during its rule until April 2011 ,and neither could the ADMK Government between 2011 and 2016 . However, eight years after the bill was passed in the State Assembly, the presidential assent to the bill was finally given on June 26th, 2016. The State Government has passed the law via Government Order (GO 163) on July 04, 2016 and published in the Gazette.

What are the amendments?

The Industrial Employment (Standing Orders) Act has been in force since 1946 and determines the working conditions of those employed in industrial establishments. The act defines Standing Order as rules related to matters set out in schedule as per Section 2(g) and mandates that the standing orders should be framed for all these matters (Section 3(2)) and will define the service conditions between the worker and the management. The schedule has defined the following matters under the purview of standing orders currently:

  1. Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers, or badlis.
  2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.
  3. Shift working.
  4. Attendance and late coming.
  5. Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
  6. Requirement to enter premises by certain gates, an liability to search.
  7. Closing and reporting of sections of the industrial establishment, temporary stoppages of work and the rights and liabilities of the employer and workmen arising there from.
  8. Termination of employment, and the notice thereof to be given by employer and workmen.
  9. Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
  10. Means of redressal for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants.
  11. Any other matter which may be prescribed.

Only these matters can be taken up under Standing Orders. The amendment (47/2008) has added two provisions under item 10 for redress for workmen against unfair treatment as follows :

10-A. Employment or re-employment of apprentices, probationers or badlies or temporary or casual workmen, and their conditions of service.

10-B. Fixation of number of percentage of apprentices, probationers or badlies or temporary or casual workmen employed with reference to the total number of workmen employed in that industrial establishment.

As the labour laws are under concurrent list (State and Central Governments), the State Government can enact amendments to the labour laws. Tamilnadu Government has acted by invoking its powers under the concurrent list. Any such amendments by the State Government will have to be approved by the President and the Central Government for the act to be passed. This amendment has been carried out after 62 years of existence of this Act.

Rationale for amendments

When the law was brought under State Legislature, then Labour Minister Anbarasan (DMK) and Labour and Employment Secretary M.Selvaraj had outlined the reasons and objectives of the amendment as follows:

  1. It has been brought to the notice of the Government that lots of industries are employing many workers as trainees for three years. Even though the apprenticeship was a mechanism to get workers to be trained before being employed properly, these trainees are employed directly in production process. They are being given low wages and denied entitlements and social security under labour laws. In particular, unmarried women are employed in textile industries as trainees. After the completion of three years, they are not retained as workers and are replaced by new trainees. This form of labour arrangement that was initiated in textile industry has now spread to other industries.
  2. To change this process and to stop exploitative conditions at workplace, the Government has decided to amend the Industrial Employment(Standing Orders) Act 1946, as applicable to Tamil Nadu, such that the working conditions and re-employment of apprentices, workers on probation, badli temporary workers and other non-permanent workers are codified in the model standing order and the percentage of such non-permanent workforce in the total workforce in establishments is stated.
  3. The amendment bill is to enact these decisions by the Government.

The changes 10A and 10B try to highlight the conditions that were observed in industrial establishments.

Central Government’s refusal to approve the amendments

The UPA Government (DMK Government was in alliance with UPA at that time) did not approve the amendment. The DMK Government did not also exert any pressure for the amendment to be approved, compared to the pressure tactics it exerted for cabinet positions.

After the Government changed in 2011, the new Government wrote reminder letters in 16.06.2011, 20.07.2011, 15.09.2011, 26.12.2011, 24.01.2012, 28.02.2012, 15.10.2012, 26.11.2012, 18.01.2013 and13.02.2013 to the Central Government. In a response by Central Government seeking explanations on 27.02.2012, the Tamil Nadu Government also responded on 14.08.2012.

The Central Government opposed the amendment on three counts :

  1. Trainees should not be covered under the amendment.
  2. The regulation of percentage of non-permanent workforce among total workforce will lead to capital flight.
  3. No opportunity has been provided to employers on whether such amendment can be enacted. This is contrary to principles of natural justice.

Actions taken to pressurise the Central Government on approval process

As the amendment aims to protect the rights of lakhs of trainees and non-permanent workers, AICCTU had taken measures both movement-wise and with support of others to approach State and Central Governments for smooth passage of the bill. We met with Central and State Labour Department Officials. We wrote letters and monitored the bureaucratic process consistently. We also raised the issue through trilateral meetings, protest rallies and signature campaigns. We raised questions repeatedly on the delay by the President when the amendment impacted lakhs of people.

We believe that the State Government had written its own responses to the objections raised by the Central Government. AICCTU, for its part, had raised the following points in its communication, as responses to the Central Government’s objection.

The custom of using trainees in direct production is a widespread phenomenon in Tamil Nadu. The Tamil Nadu Government has also agreed that the claim of only providing training to trainees is fraudulent and there are various official reports supporting this viewpoint. AICCTU has also pointed out that the judiciary has asked the State Government to intervene in this issue.

AICCTU referred to steps taken by the State Government to provide minimum wage for trainees in the textile industry. The Tamil Nadu Government added apprentices under Minimum Wage Schedule on Jan 03, 2007 and notified minimum wage for the apprentices via GO (2D) 61 by Labour and Employment Department on Nov 07, 2008(The minimum wage for a trainee in textile industry is set at Rs 325.30 for 2016-2017). When the owners petitioned High Court to revoke the GO, the writ petition was dismissed by the High Court on April 30, 2009. AICCTU has pointed out that if wages can be determined by the Government for trainees, then other service conditions can also be determined.

On the objection raised by the Central Government that investment will run away if there are restrictions in number of trainees and non-permanent work force, it was pointed out that as per Chapter V B of Industrial Disputes Act, 1947 that when an establishment employs more than 100 workers in the past one year, then it cannot retrench workers, layoff or close the factory with out prior permission from the Government. When owners of Meenakshi Mills petitioned the Supreme Court that this provision impedes on their freedom to conduct business, the Supreme Court has ruled that the Government has a right to place certain restrictions/regulations on the right to conduct business by the owners in the interest of society. AICCTU has argued that there is social interest in restricting the freedom of industries to employ non-permanent workforce without any regulations and increase precarious employment in the industry.

On the objection of the Central Government on whether industries were given an opportunity to respond before the amendment bill was passed, AICCTU has argued that the principles of natural justice cannot apply to State’s sovereign authority. It has further highlighted that the amendment was placed in front of State Labour Advisory Board in which the industry representatives are members. (It must be noted that a judgment has been ruled in Pricol Case that under conditions of social interest and expediency, if the State places certain restrictions on industry or workers under Industrial Disputes Act Section 10B, then the principles of natural justice will not apply to such actions by the State. This has also led to the workers being implicated in the double life sentence that was imposed on workers recently).

Apart from AICCTU, the actions taken by Shanmugam, General Secretary of LPF were also crucial to get the amendment passed. The Textile owners were very actively pursuing to oppose the bill during the UPA regime. With the change in power, the textile owners were confident that NDA Government was theirs and will not sign such a pro workers bill. But based on concerted actions, the Central Government has signed the bill (They must have not known its impact). Now the mandate is on State Government to pass the bill via Government Order has become imperative.

Immediate necessities for the amendment

News reports have said that there was a debate about employment in Tamil Nadu State Assembly on July 26, 2016(Tamil Hindu, July 27,2016, கடந்த 5 ஆண்டுகளில் 5 லட்சம் பேருக்கு வேலை – அமைச்சர் நிலோபர் கபீல் தகவல்). Minister O. Panneer Selvam had announced that over 58190 people have been appointed for employment in the past four years through Employment Service Departments only after proper advertisements and by Tamil Nadu Public Service Examination as per Supreme Court Order. He has further stated that the employment included 8500 appointments as Village Administration Officers, 15,481 through Group 4 exams, 131 through Group 1 and 1207 through Group 2. From the Minister’s statement details, it emerges that only 25,319 people have been employed through these services and the statement does not have any details about the appointment process of 32,871 employments in the last four years.

In addition, Labour Minister Nilofer Kapil has responded that over 60% of 85 lakhs registered in Government Employment Service Departments have completed either 10th or 12th and are pursuing higher studies, i.e only 34 lakh people are looking actively for employment(The Minister has not submitted any evidence on this). Similarly between 2011 and 2016, 86696 have been employed through Employment Offices, 56,328 through teachers through Teachers Recruitment Board, 32,997 through Tamil Nadu Uniformed Services Recruitment Board and 1,42,114 through private recruitment camps While the disaggregated data totals only to 3,18,135, the Government has claimed employment of over 5,01,874. Hence there is no proper accounting concerning 1,83,739 employments.

At a later point, he had contradicted the information about 1,42,114 jobs created by private employment camps. He has said that 3530 companies had participated in 15 districts in special employment training camps and out of 4,47,496 people who had attended, 59,232 have been recruited and 53,440 students are receiving training. As per the minister’s comments, 29 lakh workers then do not have any employment. AICCTU has already pointed out that these wages through these employment usually do not exceed Rs 12,000 and average earnings usually are around Rs 8000. While the Tamilnadu government has ensured that there is no shortage of workforce in the police department, there also it has only employed new workforce as special officers on consolidated wages.

These data makes it clear that large section of urban and rural workers are in low, precarious, insecure employment. Continuous employment is becoming scarce. Contractual employment and use of trainees in direct production has become the primary form of employment in manufacturing and service sector. Even engineering and other graduates are being employed only as trainees and contract workers. Hence, there is a basic need for limiting the number of trainees and other precarious work force in the total employment in industries.

What is to be done?

Maharashtra State Government has already made provisions in its act for employment, working conditions and reemployment of workers on probation, temporary workers and badli workers. In 1977 (17.11.1977), the Maharashtra Government had added rules 4A, 4B, 4C and 4D in this regard. Rule 4C states that those workers who have worked for more than 240 days in temporary employment be made permanent. The rule 4D regulates that a regular list of temporary workers be maintained and temporary workers must be recruited only from this list. Through this, it disallows industries from bringing in new temporary workers to replace older temporary workers. When Maharashtra has made these amendments as early as in 1977, can Tamilnadu lag behind in this regard even after 40 years?

At the same time, Tamil Nadu has taken a progressive march in enacting item 10B in the schedule (Defining the percentage of trainees and contract workers in a workforce). It is important that this should be cemented by limiting the percentage of temporary workers to 5% in a industry, factory, retail or other commercial services by amending the Model Standing Orders. There had been talks among trade unions that under DMK Government, then Chief Minster had pondered over limiting the precarious workers to 5% or 10% of the regular workforce. It is imperative that the current Chief Minister ensures that the non-permanent workers in entire workforce does not go beyond 5%.

The Tamil Nadu Trade Union Movement should direct energies towards ensuring this. The left trade unions must play a central role in ensuring the welfare of lakhs of precarious workers from Hyundai to Pricol. There is a historical necessity for leftist agenda based independent left-wing politics.

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