Just as the Vatican is starting to make peace with the fact that some marriages may need to end in divorce, Indian labour laws and trade unions must recognise that employment contracts cannot be for life. While there are many conspiracy theories going around, the bilateral decision by two consenting adults?union leaders and Maruti?to voluntarily end their employment relationship reflects the reality that it is better to end frayed relationships. Legitimising fixed term employment and recognising the ability of companies to resign from employment contracts?a right that employees have always had?will greatly reduce informal employment, reduce corruption, retard the substitution of people by machines, and improve labour relations.
In 1959, senator John McClellan chaired a committee of the US Congress tasked with looking into a series of scandals involving corruption and power abuse by trade union leaders. His conclusion, ?The special privileges which trade unions possess are in the highest degree destructive of the individual rights of working men and businessmen, of our economic system, and ultimately of our legal, political, and moral framework. The conduct growing out of these special privileges would bring an end to law and order and subject all to the rule of the arrogant, the racketeers, and the strong-arm men they both employ. If followed to its logical conclusion, it will lead eventually back to the law of the jungle. The question is whether our politicians will have courage enough to enact some legislation to protect the working people of the country against exploitation.?
India?s irrational labour laws have victims but no villains. Companies, forced with a choice of entering into labour contracts that cannot be ended choose to hire many employees via contractors for fixed terms. The majority of our labour force toils in informal employment?93% of the total?because our labour laws protect the small minority and ensure that 100% of net job creation since 1991 has happened in the informal sector. The lack of rational regulation for contractual employment means that most labour contractors are criminals or politicians because the key skill is regulatory arbitrage. Union leaders have become the ultimate interest group?Mancur Olson?s explanation of how a small but vocal and organised minority in a democracy can hijack the agenda. Trade unions have been able to position their self interest as national interest and do not care for the majority of our labour force that is not interested in job preservation but job creation.
Of course, there must be non-negotiable labour laws; minimum wages, adequate benefits, leave and safety conditions. These were not under dispute at Maruti. But legislation about non-negotiable employment terms has dangerous and undesired consequences. We must make our labour laws realistic and enforce them. Very few people disagree that India?s labour laws are a tangled mess with pathetic enforcement. India has 450 million employees but the Provident Fund covers only 30 million and the ESI even less. There are 136 million people in this country on contract but only 1 million are covered under the Contract Labour Act. The factories Act mandates a cr?che at every worksite but less than 0.1% have one. The shameful transmission losses between how our irrational labour laws are written, interpreted, practiced and enforced ensure that neither employers nor job seekers are happy with the status quo. Trade unions have a legitimate role in society, but only if they move beyond the small labour aristocracy they currently represent.
The author is chairman, Teamlease Services
The use of money, muscle and state power for ?trade union busting? has been an age old practice of unscrupulous employers. Threats and bribery, as in case of the Maruti Suzuki workers, may create some temporary setback but can never undermine the trade union movement, whether in Gurgaon, Manesar or in any other place in the country.
The basic issue involved in these strikes are not being discussed seriously in many of the discourses after the strike. The issue is that of trade union rights to the workers. The workers are demanding that their right to have a trade union of their choice be respected and the right to collective bargaining be ensured. This ?simple? demand of ensuring a fundamental and democratic right for the workers in the manufacturing sector is being denied in this largest democracy in the world! The working class in India had conducted strikes and struggles for this fundamental right of forming trade unions even during the colonial period. The constitutional right of workers to form a union of their own choice has now been again brought to the national agenda by the movement of the young work force in Maruti and the same cannot be trivialised through a mischievous campaign on ?bribery?, side tracking the core issue of trade union recognisation. I further understand the workers at the Manesar plant have taken the set-back in stride and have again sought registration of their union.
What happened in Maruti is only the tip of the iceberg. The right to form a trade union and to register the same is being denied in many parts of the country. Such industrial anarchy in violation of the labour laws of the land is bound to create severe industrial unrest and Maruti-like situations in other industrial areas also. Most of the private industries/investors during the last twenty years have been trying to have a ?tax?free? and ?union?free? regime in a nexus with investor-friendly and corporate-captive governments at the centre and the states.
The denial of registration of unions is now becoming a serious issue in many states. The struggles of workers in MNCs like Hyundai, Foxconn in Tamil Nadu and Volvo in Karnataka are on issues of registered unions being denied collective bargaining rights.
In Hyundai, there was only one registered union for more than three years, which the management refused to recognise and also dismissed, suspended and transferred office bearers and leading activists. When the pressure was mounted on the management through continued struggles, the management got a ?pocket union? registered and declared that union as recognised! Now, workers from the first union who command a huge majority support are demanding a secret ballot for the recognition of their union. In Volvo, in Bangalore, 60 days of strike have just ended, but four of the office bearers of the only union are still under suspension, but forced the management to settle other issues like regularisation.
The government at the Centre and the state should draw the correct lessons from the Maruti struggle and ensure industrial democracy as per the laws of the land, instead of encouraging and abetting ?trade union-busting? operations as has been done in the case of Maruti.
The author is general secretary, Centre of Indian Trade Unions