Labour Rights in Globalising India
T.S. Papola
ICSSR National Fellow and Honorary Professor
ISID, New Delhi
NATIONAL SEMINAR
on
Globalisation, Labour Markets and Employment Relations in
India
Mumbai University
9-10 July 2012
1. Post-globalisation, labour has lost out globally
on multiple fronts
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decline in bargaining power vis a vis capital
political groups/parties based on support of, or providing support
to labour, losing power
smaller increase/stagnation/decline in labour incomes/share vis a
vis capital income
erosion in labour rights, waning of support of governments,
general public, judiciary
2. Internationally, these phenomena have
been caused by
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increased mobility of capital as part of globalisation with
continuing, or even increased, restrictions on the mobility of
labour
high and rising levels of unemployment in developed countries
and slow growth of employment (“Jobless growth”) in developing
countries
pressures to increase labour market flexibility and reduce labour
protection due to increasing international competition for
markets (WCSDG, 2004, para 210)
increasing hegemony and influence of neo-liberal economic
ideology
3. In India, there is a sharp decline in union
power and influence
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small base: only 2% of all workers (9.57 million / 474 million) and 35% of
‘organised’ sector workers (9.57 million / 27.12 million) unionised (2008),
yet influence much larger earlier
percentage unionisation declining due most new employment in informal
sector or non-regular
failure to organise the unorganised
declining political influence due loosening of ties with affiliating political
parties (How many TU leaders MPs now as compared to earlier?)
ascendency of ‘employer militancy’, as seen in rising importance of
‘lockouts’ over ‘strikes’, within an overall decline in “industrial disputes”
Year
Number
Strikes
1990
2000
2003
2006
2010
Lockouts
528
426
255
154
262
403
345
297
192
168
Persondays Lost (million)
Strikes
Lockouts
10.6
11.96
3.21
3.16
5.12
13.5
16.80
27.05
10.60
8.18
4. Common perceptions about labour and
labour organisations have changed
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public no longer sympathetic to the cause of labour, not
willing to bear any inconvenience due to a strike/bandh
unions no longer viewed as useful social institutions
contributing to democracy and social change
governments keen to project themselves as ‘pro-industry’,
instead of ‘pro-labour’ as earlier
labour no longer seen by governments as weaker party
deserving protection and support
industry often looked with a positive prism – contributing
to growth and development, and labour with a negative
prism – as a disruptive force in economic growth, by public,
media and even governments
5. Governments are no longer keen to
strictly implement protective labour laws


persistent demand for “labour reforms” = labour flexibility =
freedom to “hire and fire”, from industry, international financial
institutions and others
government inclined to view some regulations e.g., certain
provisions of IDA and CLRA, as “extremely restrictive”, as evident
in the statements in official documents
e.g. Economic Survey, 2005-2006
“Various studies indicate that Indian labour laws are highly protective of labour and labour
markets are relatively inflexible .... Evidence suggests that states, which have enacted more proworker regulations, have lost out on industrial production in general” (Para 10.13, p. 209)
Eleventh Five Year Plan
Though it “has not proved to be a major obstacle in downsizing by several manufacturing
enterprises during the past years”, “Chapter VB of the ID Act, 1947 does create a psychological
block in entrepreneurs against establishing new enterprises with a large workforce—“
or
CLRA “constrains seasonal employment because of the fear the work done by the employees
recruited to meet the temporary or seasonal demand would be declared to be work of
perennial nature, thus constraining production for supply of large orders.” for eg. in garmentscontd…
…contd
5. Governments are no longer keen to
strictly implement protective labour laws

yet, no change in law, (political compulsions?); instead,
 states allowed to amend laws, change rules, relax implementation
( See e.g., Debdas Banerjee, D N Reddy, Shyam Sundar, Alakh Sharma and Kalpana, Papola
Pais and Sahu(all 2008)on changes in labour laws rules and practices in different states,
and an interesting piece by Shyam Sundar ( EPW, May 26, 2012) on how recent version
of ESMA in Maharashtra curbs labour rights “ to maintain uninterrupted economic
service and attract capital” in pursuit of the logic of globalisation”)
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inspection, almost done away with, following guidelines to
that effect from the central govt
several activities, specially in IT, EPZs, SEZs, declared
public/essential services and exempted from application of
labour laws
increasing flexibility even without labour law reform
acknowledged in Prime Minister’s Speech in the 44th session
of the Indian Labour Conference (14 February 2012):
“--- this view (that the labour laws are unduly protective of labour) has lost its
importance in recent years as more and more state governments have become
6. Change in the attitude of judiciary:
Influence of neo-liberal economic thinking
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Judiciary which in the past has zealously protected the rights of
labour, even to the extent of pronouncing e.g. “an enterprise has
no right to exist if it cannot pay minimum wages” (Buckingham
and Carnatic (Binny) Mills Case, 1951; Reptakos, Brett and
Company case, 1992) has become not only flexible, but even
apathetic to the cause and rights of labour, quite often clearly
under the influence of neo-liberal economic thinking.
Some examples of Supreme Court (SC) Judgements where increased
competition in the globalised world seems to have influenced the
verdict
contd…
…contd
6. Change in the attitude of judiciary:
Influence of neo-liberal economic thinking
(i) Tamil Nadu Government Employees Strike case (2003)
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“There is no fundamental/legal/statutory right to resort to or to go on
strike”
Even though, directly refers to the government employees (who are paid from
public exchequer), the tenor of the judgement is wider, could be applicable to all
workers
Quotes with approval earlier judgement of the Constitutional Bench (CB) of SC
(2003)
“for just or unjust cause, strike cannot be justified in the present day situation”
(emphasis added)
(ii) Karnataka Government appeal against the judgement of Educational Appellate
Tribunal order to set aside the dismissal of a lecturer who hit the Principal of a
College with a chappal, upheld by SC (Bench of two judges, December 2005)
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Indiscipline to be curbed with an iron hand
“In view of the change in economic policy, it may not now be proper to
allows employees to break discipline with impunity” (emphasis added). Was
it proper earlier?
contd…
…contd
6. Change in the attitude of judiciary:
Influence of neo-liberal economic thinking
(iii) Karnataka Government appeal against KHC judgement to regularise daily wage
employees working for 10 years or more, upheld by SC (5 judge SC Bench,
April 2006)
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“There is no right to regular employment for those who have been
given employment on a daily basis”
“Government closing down departments due to financial constraints and
streamlining administration not obliged to reemploy those losing their jobs”
recognising the need for flexible labour laws and downsizing of the
government-tenets of neo-liberal economic policy
(iv) Appeal of VB Gadhre and others against the High Court order setting aside an
award by labour court to reinstate eight employees dismissed by Gujarat Ambuja
Cement, but ordering a retrial, rejected by SC.
Supreme Court asked High Courts and Trial Courts not to show misplaced
sympathy to workmen in labour cases, as there is no room for misplaced
compassion in today’s competitive world!
contd…
…contd
6. Change in the attitude of judiciary:
Influence of neo-liberal economic thinking
(v) SC upheld differential duty hours (6 ½ and 7 ½ hrs) for similar workers (typistcum-computer clerks) appointed before or after a date (Nov. 1, 1998), agreeing
with HC judgement and rejecting writ petition by Transport and Port Workers
Union against Mumbai Port Trust (December 2010)
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“In the modern world, businesses have to face competition with
other businesses.To do so, they may have to have longer working
hours and introduce efficiency while avoiding labour disputes.
Looked at this point of view, the classification in question is clearly
reasonable”
“The court must not embarrass administrative authorities and must realise
that administrative authorities have expertise in the field of administration
which the court does not”
contd…
…contd
6. Change in the attitude of judiciary:
Influence of neo-liberal economic thinking
(vi) Writ petition of Anand-Bazar Patrika Pvt. Ltd (publishers of Anand Bazar Patrika and
the Telegraph) challenging Wage Board recommendations for newspaper industry,
admitted. (June, 2011)
 Petitioner’s arguments: Appointing Wage Boards to fix wages a
“violation of right to carry on business”
 If upheld, will it imply that the government has no right to regulate wages?
Minimum wages?
7. Sources of support/power to labour to
protect their rights – drying up
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erosion of basic rights, a danger signal for democracy,
equity and social harmony
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role of civil society and academics: campaign and
advocacy