Why not repeal labour laws altogether?
Why suspension for 1200 days?

Bhaskar Majumder

The book Political Economy authored by Leontiev (not Leontief) starts like this: the son asks his father, “Why are you sitting idle at home?’’ His father replies, “Yesterday I produced more’’. The other side was not discovered like, “Father, why are you not coming back home?’’ and the response could have been, “Yesterday I was not allowed to produce’’. I am sure my readers now relate the untold episode in the context of destination-locked migrant workers for 50+days.

I have reasons to believe that the Act-architecture in India is archaic since many of those were formulated during the colonial era to serve the colonial masters. Many of these Acts revolved around labour. Some of the labour laws were amended or re-formulated post-independence. Post-Corona, 2019/2020, 50+labour days lost, the governments have become anxious for labour failed to add value that could have gone partially to Government treasury through a number of means and methods.

The alert state governments of Uttar Pradesh, Madhya Pradesh, and Gujarat have now announced that except for laws pertaining to the payment of minimum wages, following safety norms and adequate compensation for workers in case of industrial accidents, no other provisions of the labour law would apply to any new companies that wish to operate in the respective states for at least 1,200 days, and for those that have already been operational for that period. This step was allegedly needed to attract investment after the lockdown. This announcement aimed at providing opportunities for small and medium enterprises (SMEs).

Uttar Pradesh Model
The Government of Uttar Pradesh gave nod to the 'Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020' to exempt factories, business establishments and industries from the purview of all, except three labour laws for three years. The Industrial Disputes Act of 1947 has been withdrawn. Workers’ safety is blown to the winds because the provisions of the Factories Act will no longer be there.

Gujarat Model
The Government of Gujarat, though late, accelerated its entrepreneurial talent announcing land acquisition for companies to set up plants who would relocate them from China, it was reported. The Land Acquisition Act was archaic – of 1894 that was amended first time in India in 1984. The talent of Gujarat needs no introduction for out of the 2,574 large industries set up in India in the past three years (1917-2020), 734 units were set up in Gujarat alone. Gujarat banked on more entry of foreign firms and foreign direct investment, in the latter Gujarat was always a story of success.   

Assam Model
The state of Assam did not propose doing away with labour laws. The Government of Assam proposed introducing fixed-term employment to help both workers and industries, and sought to take more firms out of the ambit of laws governing factories and contract workers. The fixed-term employment was expected to save cost and time by direct hiring of contract workers, without the need to go through the contractor system. In Assam, companies will have to offer social security benefits to workers hired on fixed-term basis equal to that given to permanent workers in the same unit.

Maharashtra Model
Maharashtra is different because of its highest carrying capacity of migrant workers inter-state. Post-Corona after 50+days it started facing labour-deficit based on fixed capital-labour ratio with companies saying workers adamant to go back home. The highest number of persons affected by the deadly Corona-virus in the state caused anxiety among the migrant workers. Ghar Wapsi was felt  to see the members in families, apart from mid-May being sowing season as well as marriage season in the villages in UP and Bihar. Following the stop-go decision of the competent authority to permit the migrant workers to travel to their home states, the migrant workers felt encouraged to take the special trains to reach home. Maharashtra is yet to announce any such Acts as the others did post-Corona.

Punjab Model
Punjab became the first state post-Corona to reverse an order made earlier to hike minimum wages of workers. This reversal was felt urgent to help companies overcome the economic crises caused by 50+day lockdown. The minimum wage rates vary over states.  Employers applauded the downward flexibility in the wage rate. The Code on Wages Act, 2019 sought to protect the entire workforce with minimum wages. The applicability of state announcements needs to be examined vis-a-vis this Central Act, 2019.

Labour falls under the concurrent list of the Indian Constitution and states can make their own changes. It is being reported that some of the path-finding state governments proposed increasing the working hours in factories from a maximum of 8 hours to 12 hours per day. States such as Rajasthan, Punjab, and Haryana have already moved on this axis.

Trade Unions
Ten central trade unions (CTUs) considered the steps of the selected states as violation of the Rights to Freedom of Association (ILO Convention 87), Rights to Collective Bargaining (ILO Convention 98) and the norm of 8-hour working day as provided in the Core Conventions of the ILO. The CTUs may approach the ILO against suspension of labour laws and may call for nationwide agitation. Of the total 12 CTUs, the 10 CTUs that issued the joint statement were INTUC, AITUC, HMS, CITU, AIUTU, TUCC, SEWA, AICCTU, LPF and UTUC. 

Some Stray thoughts

  1. Making working hours 8 to 12 means two shifts per day, instead of three. The corollary is, fewer labourers will be required per day; depending on production period, technology and market, employment of labourers will be manifest.
  2. There is no guarantee that wage rate is going to be one and a half times more when working hours per labourer get one and a half times more.
  3. Even if wage rate of less number of labourers is enhanced, that does not compensate labourers waiting outside the factory gate.
  4. The labourers inside the factory gate or outside can approach any competent authority, for law vanished for labourers.

In case the labourers go back home, they will be quarantined for 21 days by the state administration before they get to see their families, get scope to be engaged in sowing and all that. This will mean starvation for the labourers and their families.

Keep workers under pressure
Workers now stand on the axis of job-loss and wage-cut, eviction from labour colonies converting them into expendable by successful completion of 50-day lockdown. The Government of India and of the states are no less concerned for national self-reliance where definite sleeping hours need to be replenished by indefinite working hours. For a great cause, some have to sacrifice – the first sacrifice can be made by those who are capacitated to work as slaves and bonded labourers or tied labourers and unpaid/invisible/prison labourers. As a footnote, self-reliance is nothing new as a goal; it was pledged in the Fifth Five-Year plan of India 45 years back.

The anti-worker move by suspension of labour laws by some state governments went parallel to enhancing the working hours per day per labourer from 8-hour to 12-hour through executive order. This was high time for the lockdown by forced distancing facilitated this. The state governments thought labour-coercion would promote investment that precisely went against the basic determinants of investment with or without Keynes.

People believe what power believes – otherwise people will be made to believe what power believes. The question now is not if power that is already centralized will increase, the point is it has already reached the peak. It cannot dislodge itself now. People, excepting the migrant workers, are convinced that they can live a life of comfort at home – local equilibrium. Who thinks if it is low-level or captivated equilibrium? Non-migrant people also felt secure being home-locked for 50+days for Corona, the ghost, could not enter the houses of 129 crore+ population that was by no means a great achievement of power.

Under the above psychological conditions, if some lakhs of insecure workers remain insecure, how does it affect the life of the majority? Needless to mention, most of the self-engaged workers work around 10 hours a day and some work the whole day – voluntary drudgery? In case of works at piece rate, it may be clear like in brick kilns, or home-based beedi rolling that are wage-paid; also in case of waste picking by child-workers that is wage-unpaid, or women domestic workers working in two shifts per day for multiple employers, or coolies on railway platforms. The non-labourers like priests-professors obviously do not come under the purview or the MPs-MLAs and all that. After all, the labourers are not visiting Europe – so they are to be kept under pressure. The state is prepared for that. Are the labourers prepared?

Apology: I have full faith on state-wisdom and the Constitution of India.

Bhaskar Majumder, Professor of Economics, G. B. Pant Social Science Institute, Allahabad - 211019

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May 14, 2020

Prof. Bhaskar Majumder

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