From “Decent Work” to Doles: Reframing Informal Workers as Welfare Recipients

(This piece is an extract of a longer paper entitled “Doles and Domestications: Refiguring Informal Labour in Globalizing Cities” by Karen Coelho)

The accelerating trend of informalization of labor across India since the since the onset of globalization in the late 1980s has been partly enabled by a set of legal manoeverings which reveal the plasticity of legal infrastructures in accommodating the emerging political-economic regime. This process of state-sanctioned casualization of labour has directly contradicted the spirit and provisions of the national Contract Labor (Regulation and Abolition) Act of 1970, which was intended to eliminate the recognized evils of labor contracting in the interests of workers’ rights and social justice. Through the 1990s, courts took increasing recourse to the exemptions clause in the Act to give governments elbow room to operationalize their economic policies. In addition, a couple of key judgements of the Supreme Court over the 1990s and early 2000s contributed to critically weakening the Act. The most cited of these was the Steel Authority of India vs National Union of Waterfront Workers and others (2001 7 SCC 1), which held that the abolition of contract labor (by government order) did not automatically imply an obligation on the employer to absorb the affected workers into permanent positions.

Frequently, judicial delays, set against rapid changes in economic structures, contributed to informalization. In the instance of the dismissed trolley workers of Chennai Airport, the High Court judgement reinstating them into permanent employment was rendered void by the fact that by the time the order was passed, the Airport Authority had been privatized. Thus courts across the country as well as the Supreme Court have, since the early 1990s, supported the entrenchment of an executive policy regime that has consistently casualized labor.

But legal and judicial channels have been the exception rather than the rule: the process of informalization of labor has relied primarily on a range of extra-legal strategies deployed by state agencies as well as private firms, including semi-coercive tactics such as “voluntary” retirement schemes, freezes in hiring (employing contractors or consultants to fulfil even core functions), and institutional innovations such as the creation of intermediaries to function as labor contractors. For instance, as advocate Ramapriya Gopalakrishnan points out, workers hired in 1983/84 by Madras Refineries Limited ((MRL), now Chennai Petroleum Corporation Limited (CPCL)), were denied permanent status on the grounds that they were engaged through the MRL Industrial Cooperative Society, which, the company claimed, was a labor supply contractor. Workers, however, argued that the society was formed by the company to address workers’ welfare issues, and was run by the company’s own management.

Another common strategy is to keep workers in the status of apprentices or trainees, sometimes for several years. Several companies established around Chennai have entire workforces comprising apprentices. Thus, as one labor lawyer put it, “A worker may enter a company as a contract worker, then after a year or two he may become an apprentice and stay in that position for some time. Then he will become a probationer, … and maybe after some 7-8 years, he may be hired as a worker, or he may be dismissed.” Other companies resort to terminating and rehiring workers every six months to break their continuity of work and thereby sidestep laws like the TamilNadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act 1981, which stipulates that any worker who has worked for 480 days be made permanent.

While combinations of such measures have succeeded in undermining the legal infrastructure built to prevent the informalization of labor, another strand of legal history must be traced to account for the undermining of the identity, status and rights of informal workers, and their reinsertion into state policy as welfare recipients. This thread highlights the discursive role of laws in terms of their treatment and framing of informal work. A comparative examination of the language and provisions of the various Manual Workers Acts passed by different states in the 1980s or earlier, the Building and Construction Workers Acts enacted by the central government in the 1990s, and the Unorganized Workers Social Security Act of 2008, reveals a progressive dilution of the discourse of worker rights and the disappearance of provisions for regulating wages, employment, and working conditions in favor of a steady encroachment of welfare schemes into the legislative space.

The class of Acts exemplified by the national Dock Workers Act of 1986, the Maharashtra Mathadi Workers Act of 1969 or the Tamil Nadu Manual Workers Act of 1982, fruits of long struggles by workers, aimed to decasualize work in a range of manual activities such as headloading, portering, and construction, and to win recognition for these workers as regularly employed individuals, entitled to all the privileges and benefits of permanent workers. It is relevant to note here that the bulk of workers in these activities are dalits. By bringing these professions into the ambit of state regulation, the Acts attempted to minimize the conditions that rendered their workers footloose, anonymous, replaceable and invisible. Their primary regulatory instrument was the tripartite labor board, wherein all workers as well as employers or hiring establishments were to be registered. The Acts provided for a minimum guaranteed number of workdays, and stipulated overtime payments, health and safety measures, accident insurance, and employees’ provident fund, as well as security provisions such as Employees State Insurance (ESI), Workmen’s Compensation and penalties for non-compliance with these regulations.

None of these Acts enjoyed an easy birth or prompt implementation. In the case of the Tamil Nadu Manual Workers Act, it took 13 years of hard battle between the passing of the Act in 1982 and the establishment of the first welfare boards in 1995, during which period its spirit had been substantially diluted. Provisions for regulation of employment were dropped, and what emerged was not much more than a set of labor welfare boards that focused on distributing packages of benefits to workers.

Around the same time, two landmark pieces of legislation for construction workers were passed at the national level, namely, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, and the Building and Other Construction Workers (Welfare Cess) Act, 1996. These were also passed in response to many years of struggle by construction workers’ unions. The Tamil Nadu Construction Workers Union (TMKTS) which had played a critical role in pushing for the implementation of the state legislation, was invited to be a part of the Tripartite Working Group formed by the Central Government to assist in drafting the Bills. The union also played a key role in the National Campaign Committee (NCC) that spearheaded efforts to involve construction workers in drafting model legislation that would incorporate their concerns. The NCC’s model bill, drafted along the lines of the Mathadi Workers’ and Dock Workers’ Acts, envisaged self-regulatory mechanisms with workers’ participation in the form of Tripartite Construction Labor Boards. These boards were to ensure compulsory registration of employers and workers, regulation of employment by rotatory work allocation, dispute resolution mechanisms, and collection of levies from builders to fund social security and training for construction workers. While the Acts that were eventually passed represented a significant dilution of these demands, they nevertheless addressed issues of wages, hours of work, conditions of work and safety as well as social security and welfare boards.

Despite their dilutions and compromises, the laws of the 80s and 90s appear highly progressive in comparison with the Unorganized Workers Social Security Act of 2008. The 2008 Act, which resulted from years of campaigning and at least four different draft bills submitted by various campaigns and organisations, proved a major disappointment to unions and labor advocates, who regard it as a setback to the gains made by informal workers over decades. Labour advocates decry the law as “anaemic, inadequate and even dysfunctional” (Sankaran 2009). Some claim that it even lacks a legislative structure as it fails to incorporate any recognition of status, entitlement or rights. The Act abandons all efforts at regulating employment, wages, or conditions of work, and concerns itself exclusively with providing social security for unorganized workers. Even within these limited parameters, it remains toothless: rather than providing for a minimum set of social security entitlements and specifying funding sources for these (as recommended by the NCEUS and vociferously demanded by Left parties in Parliament as well as labor activists from almost across the political spectrum), it simply recommends that schemes be worked out by state governments. Thus it confers excessive powers on state-level executive branches to determine the details of social security provision to workers.

Rather than legislating universal minimum level of social security for all workers, as recommended by the NCEUS, the Act makes a critical distinction between workers below and above the poverty line (BPL and non-BPL workers), targeting its scheduled list of schemes (such as old age pension and maternity benefits) primarily at BPL households as poverty alleviation efforts rather than as social security for workers. As Goswami (2009) notes, the Act also fails to incorporate any specific provisions for women workers such as equal remuneration or protection from sexual harassment in the workplace; instead the schemes address women’s needs in the context of their roles as mothers or widows.

Thus, this most recent national legislation for unorganized workers epitomizes the refiguring of these workers as targets of discretionary governmental assistance rather than rights-bearings contributors to the prosperity of globalizing economies.


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