Any talk of reform in labour laws is invariably met with resistance from trade unions as they fear that changes could curtail some of the current privileges their members enjoy. They would rather have a running business down its shutters than allow tampering with the benefits of its workers.
The Narendra Modi government has announced plans to reform India’s labour laws. Accordingly, new legislation are sought to be brought, with over 40 laws proposed to be merged under four categories of wages, social security, industrial safety and welfare, and industrial relations. For this, the Union Cabinet has already approved two new bills.
Labour Minister Santosh Gangwar had been pushing ahead with the idea of labour reforms ever since he took up the portfolio in 2017. This was because some provisions in the labour laws were found hampering investment and entrepreneurship given the stringent conditions stipulated by them in terms of the welfare of workers.
Any talk of reform in labour laws is invariably met with resistance from trade unions as they fear that changes could curtail some of the current privileges their members enjoy. They would rather have a running business down its shutters than allow tampering with the benefits of its workers. What’s more, existing laws back their stand. It is a different matter that in the end both sides end up losers.
In the context of the new initiatives by Modi 2.0, a revisit to some of the basic issues of trade union militancy is in order.
Trade unions were born out of a need to protect workers from the exploitative tendencies of capitalism and played a salutary role in safeguarding the interests of workers. This explains the almost romantic appeal of trade unionism to intelligentsia of the time. However, along the way, things have changed and union activism increasingly saw the unions pitting themselves against the rest of the people and holding society to ransom. Unity has become an exploitative tool for organised labour, which is used here in a broader sense to include sections such as the bureaucracy, to corner the benefit of development and progress to the exclusion of the vast majority.
As long as unionism was restricted to the factory/plant level, things were working out well. The moment it got extended to the level of the industry, unionism moved away from its original intent and assumed a role that was built on protectionism and exploitation. Unions now fight not to secure the basic rights of their members, but to safeguard whatever they have achieved so far and claim more. Little do they realise that the organised labour has been benefiting at the cost of the vast millions, who get no salary, no overtime, no provident fund, no paid holiday. They are using unity to feast on the miseries of the majority.
In their desperation to defend their turf, they have often taken positions that obstructed progress and a more equitable distribution of national resources. The banking sector is a classic example. Today it is impossible to imagine banking without technology. However, when efforts were first made to introduce computerisation in its most basic form, the banking trade unions opposed it tooth and nail. In fact, the Reserve Bank of India had installed the first few computers somewhat surreptitiously, telling the staff that these were meant for data collection and analysis.
Later when the RBI introduced computerised cheque clearing operations in1982, it had to be done out of a separate office in Calcutta, and not the regional office of the apex bank, due to opposition from the unions. The game changer was the licensing of new banks in the private sector, which leveraged technology to compete with the State-owned banks. Today, when banking operations are entirely technology-driven, one can imagine what would have happened had the authorities succumbed to pressure from the trade unions.
Trade unions often betray a false sense of conviction that the banks are essentially meant for the benefit of their employees, whether it is computerisation or amalgamation of smaller banks to create more viable entities. When in September 2018 the government announced the merger of State -owned Vijaya Bank and Dena Bank with the bigger Bank of Baroda under the Prompt Corrective Action (PCA) framework of the RBI, first the officers went on a one-day strike in December, followed by the employees of all banks, public and private, to oppose the move, ostensibly in the name of customer inconvenience due to the likely closure of several branches after the merger.
It is heartening to note that the Modi government is seeking to extend social security benefits, so far monopolised by the organised labour, to the unorganised sector, which accounts for the largest chunk of India’s working age population. In March, Modi announced the launch of the Pradhan Mantri-Shram Yogi Maandhan Yojana, meant to provide pension to 42 crore workers in the unorganised sectors. The new labour codes are expected to further expand this facility.K Raveendran is a senior journalist. Views are personal.