Labour Laws | States could turn to the four codes set by the Centre

Representative Image

For governments that have had to shelve planned reforms due to political opposition, the last month has been a shot in the arm.

Take for example the law that prohibited farmers from directly selling their produce to ultimate buyers. The Agricultural Produce Marketing Committee (APMC) was set up by governments in different areas within the state, ostensibly to protect farmers from exploitation by the private industries which bought their produce. However, in effect, the commission agent who the farmer was forced to deal with, acted as a monopolist, and ended up gobbling up most of the profit. It was estimated that farmers never got more than 25-33 percent of the final price (and during seasonal spikes, like onions touching Rs 200, the farmer didn’t share the bounty).

Maharashtra’s government has been trying hard to abolish the APMC system over the last few years, only to run into opposition from the middlemen. Last month, so as to avoid the possibility of COVID-19 spreading at APMC mandis, the government permitted farmers to directly approach and sell to industries. One feels that the change is here to stay. While it is quite likely that farmers will still be better off trading directly with the consumer, perhaps prescribing a mandatory minimum indicative price would go a long way in protecting the farmer.

The scrapping of labour laws by several Bharatiya Janata Party (BJP)-run states are also the circumvention of opposition to planned labour reform by the Modi government. However, analyses of the changes have to be much more nuanced.

Last year, the Union government consolidated India’s myriad labour laws into just four statutes. The code on wages has been enacted, while the ones on safety, health and working conditions; on social security; and on industrial relations, are still pending in the Lok Sabha. Trade unions across the spectrum have decried the reforms.

Now, Uttar Pradesh, Madhya Pradesh and Gujarat (many other states are expected to follow suit) have reportedly abolished a substantial number of laws on worker protection — including ones that mandated a minimum wage as well as decent working environment, such as the requirement for toilets.

It is debatable whether the old labour laws actually did protect workers. Anecdotes abound of workers toiling in inhumane conditions, the law probably circumvented by greasing the palm of the labour-inspector. On the other hand, these laws unnecessarily stifled entrepreneurship with rules that required the enterprise to get government approval before shutting down, or even firing workers in some cases. Further, it stands to reason that if more industries existed, even if one factory shut down (leaving the worker unemployed), she would have other employment options.

At the same time, the complete abolition of labour laws, as the states have resorted to, is simply unconscionable. Often labourers, at the risk of sounding patronising, are extremely poor and practically illiterate, making it almost unlikely they can negotiate fair terms for them, making it imperative that the government provide minimum conditions to be met by enterprises. Enterprises may be permitted to fire employees, but is there a justification for not providing salary in lieu of notice period, as urban middle white-collared workers are inevitably entitled to?

The ordinances dispose with the need to maintain registers by the firms. These registers are not merely a bureaucratic hassle. Often, they are the only protection a worker has against exploitation. For example, mines were supposed to maintain a register that showed the number of people inside the mine at any given point of time. Scrapping such a requirement might be fatal to the miner’s life, or to even rescue efforts in the event of a disaster.

The scrapping of laws might also directly violate India’s obligations under International Labour Organization (ILO) conventions, which India is a signatory to. These include conventions pertaining to abolition of forced labour and child labour, as well as to discrimination. Interestingly, India has not signed the conventions pertaining to trade-unions and collective bargaining yet.

It is quite likely that these ordinances will be struck down by the high courts, for its complete disregard for worker rights. If they are, the states would do well to revert to a much more moderate reform, perhaps on the lines of the four codes released by the central government.

Abraham C Mathews is an advocate based in Delhi. Twitter: @ebbruz. Views are personal.