Sunday, November 1, 2015

A Consensual Agenda for Labour Reforms


‘Creating an ambience where both workers and managements understand their rights and duties is no tall order’.

The Centre is engaged in serious discussions with trade unions over the new labour code, with a view to improving the ease of doing business. But missing from the debate is the issue of the obligations of workers. During the 1960s and 1970s, workers’ education, aided by the government, provided them with the opportunity to know their rights. But the whole campaign was on rights and not obligations. Once rights are conferred on any group, and they become binding, it becomes difficult to reduce or deprive such rights.


Trade unions have also been the foundation on which many political careers have been built. Vested interests are bound to exist in such a context that could affect the speed of reforms. That said, interests need to be balanced. Productivity and security in industry depends as much upon the welfare of workers as that of management. Technology is a double-edged sword while knowledge is a sharp tool in the hands of both parties.

Industry is looking forward to flexibility in employing labour for various categories of the workforce, including the non-permanent flexible category, linking pay to performance, reviewing work norms on a regular and real-time basis, healthy cooperation between the management and workers for introducing new technologies and new work practices, and promoting leadership among workers for efficient bargaining.

Preventive litigation
We have Bar Associations right from the district to the State levels and the Bar Council with State chapters. There is no evidence that these organisations have ever put in efforts to prevent litigation. Whenever any dispute arises between management and labour, the advocates argue for workers’ compensation.

The Association could develop a code among advocates on preparing proper ground for arguments based on not just the law but on humanitarian and welfare considerations. Perhaps, the new evolving labour code can consider introducing this aspect.

Processes are more important than products and output. There are a number of schemes targeted at the welfare of workers.

Like a menu card in a hotel, each industry must display these schemes. For instance, there are social welfare schools where a child can be educated at least cost and better than normal schools — private or public.

There are scholarships for workers’ children, periodic health check-ups and other benefits available through Employee’s State Insurance and other channels. An industry that provides knowledge and access to workers of many of such facilities can be incentivised through annual awards.

Kindle entrepreneurship

Each child from the age of twelve should be equipped with some skill or the other as part of the curriculum. Internships provide the best opportunity. During the vacations children could be provided access to such skills and services with the help of either the industry or the NGOs. This provides them the mindset of entrepreneurship. Such internships should get them some monetary incentives at the hands of the industry or establishment to which they are attached.

FDIs that come in have their eyes set on markets and profits. They might, by restructuring processes, cause drastic reduction in employment. Therefore, enhancing the skills and even re-skilling and multiple skilling would assume importance so that alternate opportunities could be safely exploited without disturbance to the family life of the workers.

A culture of unity
We often hear people telling with pride that they belong either to a SBI family or the Tata group or Birla group long after they left the enterprise. Preserving this sentiment demands a basic recognition that industry is a larger family, and management is the karta of this joint family. Labour reforms hopefully would take adequate care of the welfare of the workers and enhance their productivity in India’s unique cultural ambience. The new code and new statutes should accommodate these aspects.

The writer is an economist. With inputs from Anil Kumar, Advocate, AP High Court

(This article was published on October 30, 2015)
Printable version | Oct 31, 2015 8:30:04 AM | http://www.thehindubusinessline.com/opinion/a-consensual-approach-to-labour-reform/article7823694.ece © The Hindu Business Line