Tatsat Chronicle Magazine

Sparks of Discontent: Labour Law Reforms Raise More Questions Than Answers

In 2019 and 2020, the Central government made sweeping changes to labour laws, which were projected as reforms, though yet to be notified. The new Codes replaced a host of old laws and left implementation to the states. The labour unions, however, see these changes as dilution of labour rights to favour
July 22, 2023
Not acceptable: The labour unions say the new labour Codes don't protect the interest of workers. Photo: WallpaperFlare.com (representative image)

During his visit to India in April this year, Apple Inc. Chief Executive Officer Tim Cook reiterated his commitments to growth and investment across the country. He met Prime Minister Narendra Modi, tweeting later, “We share your vision of the positive impact technology can make on India’s future — from education and developers to manufacturing and the environment, we’re committed to growing and investing across the country.” In response, the Prime Minister tweeted, “Glad to exchange views on diverse topics and highlight the tech-powered transformations taking place in India.” The key to India’s manufacturing growth lies in labour law reforms.

Cook is reported to have shared his company’s business plans and intentions of scaling up local manufacturing in his meetings with top government officials. He also participated in the inauguration of India’s first Apple retail store in Mumbai followed by another in New Delhi.

According to some reports, Cook sought “policy support to build a component ecosystem”. It was not the first such attempt at seeking policy support in favour of the investor, nor is it Apple alone making the move. Major global manufacturers have for long been nudging the Central and state governments to modify labour laws and make them flexible.

British newspaper Financial Times said in March that Apple and its manufacturing partner, Taiwan’s Foxconn, were among companies seeking alterations in legal frameworks to drive more productivity and efficiency in operations. Such “proposals” may be spurred by the China story where some 90% of all iPhones are assembled. Apple’s partners there collectively employ over a million workers in four factories, producing phones worth over $100 billion (in free on board, or FOB, value).

Partners or contract manufacturers like Foxconn, Pegatron and Wistron assemble iPhones for Apple Inc. in various locations. In India, Foxconn’s manufacturing unit is based at Sriperumbudur, Tamil Nadu, while Pegatron is in Kancheepuram in the same state and Wistron’s unit is located near Bengaluru, Karnataka.

Also Read: Labouring For Reforms 

In comparison to China, the three factories here, with over 63,000 workers, assemble around 7% of the global production and make $7 billion worth of phones in FOB value.Thus, appeals from such multinationals are linked to their ambitious plans to scale up Indian operations. So attempts to amend the laws, some considered “archaic”, have been made by the Centre as well as states.

While the Centre has introduced four labour Codes and pushed through labour reforms, it has left the states to notify their own rules and regulations after passing required laws in their legislatures. The states are required to notify rules under the four Codes since labour is a Concurrent List subject.

However, the implementation of the Codes, passed by Parliament between 2019 and 2020, has been stalled. While the Code on Wages was passed in 2019, the other three — Occupational Safety, Health and Working Conditions Code, Industrial Relations Code, and Code on Social Security — were passed the next year. Together, these sought to introduce sweeping changes to India’s labour and job markets.

Trade unions claim that the Codes will meet the same end as the contentious farm laws, which had to be repealed following widespread agitations, including a year-long siege of the National Capital.

A platform of 10 trade unions had urged Union Minister of Labour and Employment Bhupender Yadav to scrap the Codes. But the RSS-affiliated Bharatiya Mazdoor Sangh (BMS) decided to plough a lonely furrow.

And the left-oriented Centre of Indian Trade Unions (CITU)  argued, “The overhauling of the 29 existing labour laws into four labour codes…is aimed at substantially eliminating all their protective components in terms of rights, wages, social security, health and safety and welfare benefits.”

It said that the Codes are “aimed at institutionalising virtual conditions of slavery on the workers and to facilitate the project of the ruling class and their pet government to eliminate almost all statutory entitlements of working people for defined working conditions, minimum wage, working hours and social security along with right to organise, right to collective bargaining and right to strike etc both directly and circumstantially. Along with these, the very provisions of inspection, which is the lifeline of implementation of the labour laws, have been practically done away with”.

The Indian National Trade Union Congress (INTUC), a workers’ body affiliated to the country’s principal opposition party, issued a statement saying, “There is a general talk about the labour reforms being necessary in the industry and business houses especially in the context of FDI.  There is also demand from the trade union that labour reform is highly necessary because some of the labour laws are outdated. In the context of the demand from the employer and workers, particularly the business communities, it is necessary to examine the above subject deeply and some meaningful decision should be taken in this regard.”

It alleged that “…a number of industries (which) were closed down without paying legal liabilities to the workers.  There are a number of industries which are not paying the normal regular wages. The workers are suffering and not extending co-operation to the industry/business”.

Hiranmay Pandya, president, BMS, says, “Government policies are not so labour-friendly. If the government does not change its attitude, and take steps in the interests of labourers, BMS will go to the people. With the help of workers, BMS is confident of winning every battle.”

In its 20th all-India triennial convention in early April, the BMS passed a resolution that included five demands. These were: labour policy and laws should be made for the entire unorganised and organised labour sector, mutual agreement and collective bargaining should be encouraged, priority should be given to maintaining industrial peace, appropriate standards of social security should be determined, and compliance with labour laws and timely arrangement for settlement of labour disputes must be assured.

According to BMS general secretary Ravinder Himte, it is not possible to agree to some of the Codes until the government accepts these recommendations. The organisation is mainly seeking changes in two Codes: The Industrial Relations Code and The Occupational Safety, Health and Working Conditions Code.

Recently, in Maharashtra, the BMS joined other trade unions in criticising the Maharashtra Code of Industrial Relations Rules, 2023, formed under the Codes notified by the Centre. The labour rules will make it easier to retrench workers and shut down factories with 300 or fewer workers. The rules further exclude those earning ₹18,000 and above per month and in supervisory roles from the definition of “worker” under the Industrial Disputes Act. Currently, only factories with fewer than 100 workers can retrench employees or undertake closure without permission from the government. Also, under the new rules, the unions need to give a 60-day notice prior to striking work, instead of the 14-day period under the old labour laws.

Meanwhile, the Tamil Nadu government, after passing an amendment to the Factories Act of 1948, did a rethink. Implementation would have extended the number of working hours in a day from eight to 12. It is said that Chief Minister M.K. Stalin announced a rollback following talks with alliance partners and trade unions. He announced the withdrawal of the legislation in his May Day speech.

The amendment proposed to insert a new Section 65A in the Factories Act that would enable factories to have flexible working hours. The amendment, however, did not mention specific changes, which were expected to be notified separately. As with the Centre-introduced Codes, it proposed to extend daily shifts of factory workers to 12 hours from eight. That was to be if workers “opted” for a four-day work week. Earlier, a similar piece of legislation was passed in the Karnataka Assembly to amend the Factories Act. This also seeks to change the provisions relating to daily working hours, wages for overtime work, women working late shifts, etc.

Such legislative changes can be traced to the Central government’s Codes. These, as trade union leaders claim, weaken the entire system of labour protection and limit collective bargaining.

The General Conference of the International Labour Organisation (ILO) in October 1919, also known as the First International Labour Conference, adopted certain proposals regarding “application of the principle of the 8-hours day or of the 48-hours week”. Under Article 2, it says “the limit of eight hours may be exceeded on the remaining days of the week by the sanction of the competent public authority, or by agreement between such organisations or representatives; provided, however, that in no case under the provisions of this paragraph shall the daily limit of eight hours be exceeded by more than one hour”. It also resolved that “where persons are employed in shifts it shall be permissible to employ persons in excess of eight hours in any one day and forty-eight hours in any one week, if the average number of hours over a period of three weeks or less does not exceed eight per day and forty-eight per week”.

On its part, the government defends itself saying that the amendments have kept the 48-hour week stipulation intact.According to reports, Arunachal Pradesh, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Manipur, Odisha, Punjab, Uttarakhand, Uttar Pradesh, and Jammu and Kashmir have framed required regulations under the new labour laws.

Thirty-one states have published draft rules under the Code on Wages, and 26 states have published draft rules under the Code related to Occupational Safety, Health and Working Conditions, according to a Hindustan Times report in May. Twenty-eight states have published draft rules under the Code on Social Security while an equal number have completed preliminary processes regarding the Industrial Relations Code.

Meanwhile, while the debate rages on labourers’ interests and production targets, a major concern for such workers is safety against occupational hazards. Early this year, Indiaspend reported, quoting official data, that every day three workers die in Indian factories. “Between 2017 and 2020, three people died and 11 were injured each day, on average, due to accidents in India’s registered factories, per data from the Ministry of Labour & Employment’s Directorate General Factory Advice Service & Labour Institutes (DGFASLI), accessed by IndiaSpend in November 2022 through a Right to Information (RTI) request,” it said. The data mentioned that 3,331 deaths were recorded between 2018 and 2020, but only 14 people were imprisoned for offences under the Factories Act during the same period, the report added.

Regarding the Occupational Safety, Health and Working Conditions Code, CITU observed that it seeks to amalgamate and subsume 13 enactments related to factory workers, mine workers, dock workers, building and other construction workers, plantation workers, contract labour, inter-state migrant workers, working journalists and other newspaper employees, motor transport workers, sales promotion employees, beedi and cigar workers, cine workers and cinema theatre workers.

The CPI(M)-affiliated union alleged that “basic worker-related aspects of the 13 laws are going to be repealed by this Code, pertaining to working conditions, principal employers’ obligations in case of contract work, clear-cut definition of wage, basic components and details of occupational safety and health as available in the parent laws, tripartite implementation mechanism etc and above all enforcement — everything has been diluted and/or grossly altered only to the advantage of their masters — the capitalists — in their mad drive to ensure ‘ease of doing business’. Through this enactment, violation, and loot on workers by the employers are being sought to be legitimised”.

The repealed Acts, it claimed, dealt with specific issues and sectors. “This was the case in Acts related to construction, beedi and cigar, mines, and docks workers, working journalists, sales promotion employees, motor transport workers etc. This ensured some protection to the concerned workers,” it said in a statement.

Rejecting the new Codes as a “one model fits all” attempt, CITU claimed that “most of the workers in the unorganised sector, as in beedi and cigar, construction, motor transport, and major sections of working journalists, migrant workers, contract workers will be the worst to suffer as their working conditions will be subject to arbitrary interpretation by the employers with a helping hand from the ‘appropriate government’.”

In a development that certain observers equate with the chronology leading to the repeal of the three farm laws, talks between the Central labour ministry and unions have stalled. However, this time, it appears that the government intends to take all stakeholders on board. But that may not happen before the general election is held next year.

Jayanta Bhattacharya

Journalist. Curious about astronomy, cinema, communications, digital media, geostrategy, human rights, military, tech, and nature.