With unorganised force beefing up unions, the focus now is on job creation than job protection

While demands for wage hikes will continue to remain on the agenda of trade unions, especially in a country where retail prices are rising close to 10% every year, the focus of trade union movement is shifting towards job ?creation? in all segment of the economy rather than the previous stance of confining to ?protecting? jobs in the formal sector.

This may bode well for the labour class, but it surely poses a challenge for the government and private sector in the coming days.

Last week, the coordination committee of all trade unions submitted a 10-point demand to Prime Minister Manmohan Singh with equal pay for contract workers doing similar jobs as regular employees topping the agenda. Hiking the minimum wages to R10,000 per month was second on the list, said G Sajeeva Reddy, chairman of the apex committee of unions and president of Indian National Trade Union Congress. Extension of pension for all types of workers, social sector benefits for unorganised were also on the list, he said.

Though INTUC is aligned to the ruling Congress Party, Reddy said, ?There are some points where we differ with the government.?

The largest trade union has in fact joined hands with the Bharatiya Mazdoor Sangh and Left-leaning AITUC to form a coordination committee, headed by Reddy, to voice the concerns of workers that are similar across states ruled by different parties.

Clearly, most of the demands of the apex trade union panel are aimed at protecting the interest of contract workers and those in the unorganised sector and not for the small fraction of formal sector workers, whose jobs are permanent and who earn many times more than the government-mandated minimum wage of R115 per day.

This change in focus has not come all of a sudden due to a change in ideology. Rather, it has more to do with the rise in the membership of unorganised sector workers in the country?s leading trade unions.

One of the trade union members said close to 70% of the new workers who have enrolled with their union are from unorganised sectors ? agriculture, building and construction, domestic services, forestry, plantation, personnel security and social welfare services (like anganwadi).

Trade unions change tack…

Not surprising, the trade unions have become vocal on trebling the minimum wages of informal sector workers.

?The trend (in trade union membership) is towards the unorganised sector,? said DL Sachdev, secretary of All India Trade Union Congress affiliated with communist parties. ?In 10 states, workers are not getting even the minimum wage. When this happens, they are tempted to agitate. But so far there was no way they could have voiced their concern. This is why trade unions are raising these issues now.?

Industry experts say the trend in trade union membership bodes well for the country as trade unions have so far been taking care of the interest of a minority 7% of the country?s 450-million workforce even while the majority of informal workers remains unattended. ?Now, trade unions have to make up their mind on whose side they will be?formal workers who constitute just 7% of the country’s labour force or the majority 93% of informal workers. They also have to decide whether to focus on job protection (of 7% of formal sector workers) or job creation for the informal sector workers,? said Manish Sabharwal, CEO of staffing firm TeamLease.

In the formal sector, the main issue now revolves around contract labour even as regular employment is virtually static or shrinking. ?There is no fresh recruitment and employees are trying to cut cost by employing contract labour. Today, the number of contract workers is twice the regular workers,? said Sachdev of AITUC.

Trade unions leaders point to widespread violation of labour laws, which could be one reason for the rise in labour unrest. Last year, labour agitations in Maruti Suzuki?s Manesar plant turned violent, resulting in death of a HR manager and injuries to many staff. While this came as a shocker to many, trade union leaders point to the widespread practice of companies offering contract workers one-third the wages of regular workers.

During 2012, industrial unrest increased as formal sector workers protested disinvestment, high inflation and expansion of contractual work force in not just private companies, but also in government-owned firms. The impact of strikes has compounded the problems of an industry struggling to cope up with sluggish demand, slowing exports and high borrowing costs.

Trade union and industry experts agree that trade union movement could become less aggressive and more constructive in the coming years. Since strikes in banks, coal mines, airline and transport sectors hamper not just economic activity, but the common man, especially the daily wage earners in a big way, a change in the composition of trade unions could alter the path of labour agitation. ?So far what we have seen in trade union movement is mindless negativism. The change in the composition of trade unions towards informal sector workers should force a change in their conduct,? said Sabharwal of TeamLease.

The government is not completely unmindful of the labour scenario. Moves are afoot to amend the minimum wages act as also the contract labour act. There is intense debate within the government and industry about the rise in wage costs due to the amendments in the labour laws.

Trade union leaders like Sachdev justify this, saying, ?Higher wages will generate higher demand and help in faster economic growth. However, company profit margins will be affected to some extent,? adding, ?But it’s a cost worth paying. Constructive trade unionism can add a few percentage points to the GDP.?

Fatter unions?

* INTUC membership has gone up to 3.33 crore from just 39 lakh five years ago

* The BMS has 1.71 crore members compared with 66 lakh in 2008

* AITUC has 1.42 cr members, up from 34 lakh in 2008

More trouble

* The recorded number of strikes in PSUs and banks in 2012 was 122 compared with 51 in 2011

* A loss of 1,128,159 man days was reported in 2012 against 670,487 in 2011