Blog: Labor Law Reforms Have Already Happened Mr Prime Minister!

Compensation & Benefits

Labor Law Reforms Have Already Happened Mr Prime Minister!

From political collusion to managerial short-sightedness, the laws have been rewritten on the ground
Labor Law Reforms Have Already Happened Mr Prime Minister!

I have an untold story about labour reforms that must be narrated. Let me explain. I visited industries at many places in different states. I realized that the Prime Minister has been completely misled on the issue of labor law reforms. The reforms have already taken place!

Here is what I discovered:

Ministers have a ‘helping’ attitude (So do employers: they help ministers). I met an entrepreneur. His establishment was an SME, and it had built up a reputation in the market. During my conversation he told me that his workers were organised by a union which was led by a minister. The entrepreneur had excellent rapport with his workers and identified those who were members. Simultaneously, a deal was struck with the Minister. The entrepreneur removed the members gradually and made his organization ‘union-free.’ All this with the connivance of the minister. All is well now on the IR front.  

Government officials are so friendly. In a small establishment, I was looking up their statutory records. The Accident register showed a blank for the last three years. I questioned the HR manager. He initially said that there had been no accident at all and they had an accident-free factory. He pointed out to the big signboard at the main gate which talked about high safety standards. On more detailed questioning, he admitted that there were accidents. But entering them in the register meant harassment from factory inspectors. Several visits. Threats of prosecution. Bribes. The solution to this was easily implemented with a small payment to the factory inspectorate during Diwali. This story, with the same theme, is repeated almost everywhere with only the players’ names and some insignificant details being different.

The HR manager hastened to add that the company pays compensation in case of accidents. Aw. Grateful for small mercies, sir.

Even workers are helping to make changes in law. I was speaking to a Silvassa-based manager with a plastic goods manufacturer. The number of permanent workers in that factory was in the range of 10 to 20. Contract laborers numbered 300. Permanent workers worked eight-hour shifts and the contract labor, mainly from Odisha, invariably worked 12-hour shifts. That was an expressed but only verbal term of employment. Why so? I asked. The reply (and this is unfortunately a fact) was that if you gave them eight-hour shifts, they would go and work elsewhere for another eight hours, because workers from Odisha come to Silvassa with the sole intention of making money.

This manager feared that I might advise his bosses to ensure the company runs only eight-hour shifts. So he went on to caution me: “This is a well-accepted system here. Do not disturb it.”

Gujarat and neighbouring Union Territories allow manufacturers to make their own labor laws. 

Managers with ‘cadre blindness’. I was to hold a training program on employee relations, at the insistence of their HO in Mumbai, in a very large plant elsewhere. It was delayed. Not once but twice. The reason was that the plant HR manager did not want the program to be held there at all. But he had to bow to the wishes of the HO finally. On arrival, he said I could talk about anything except labor laws and discipline. The reason: “Our plant is run by engineers and ITI operators. So far we have no union, and do not want one either. Please do not give them ideas.” What was there to be afraid of? The plant was run in the first shift by permanent employees. But it was run in the second and third shifts by contract employees. And the operating managers had been advised that the ‘grievances’ of contract workers should be handled by the contractor to preserve the sanctity of the contract.

This deliberate blindness to the needs of contract workers was threatened by the proposed training on ER.

Unions are conniving with employers, though a few are pragmatic. In a certain auto industrial unit, trainees and contract labor are grossly exploited and misused. Their number runs into the hundreds. The union of permanent employees was fighting a war against the company for wage revision. The union lodged several cases on this issue in the Labour Court. Finally an agreement was reached between the company and the union of the permanent workers. One of the terms of the agreement was that the union would withdraw all cases lodged in the Labour Court. So who is using contract labor for gains? Company or union? Or both?

Separate settlements have been signed with temporary workers. The official stance of the union is that “we have to accept that nothing in life is permanent, but we as a union can mitigate the hardship.” The union has ensured that both temporary workers and contract workers are given a pay rise. An interesting stance that recognizes the reality of industrial life while ensuring that their ‘IR rules’ are reset without waiting for labour law amendments.

Ab bolo, Narendrabhai, all is well, why make changes in law at all?

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Topics: Compensation & Benefits, #IndustrialRelations

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