For some years, responsible opinions have been expressed that as part of India’s modernization, “worker laws” need to be reformed. The opinions have, however, remained as good intentions well preserved. Meanwhile, economic growth has been slower than possible and the outcry for more jobs is getting louder. The problem with the current industrial laws are as yet undiagnosed and therefore the question of a cure has not been found. In this article, I have gone back two centuries. What was it then and what it could now be?
Outsourcing of work by business, industry, et al was first witnessed two centuries ago. The need then was by British traders who knew their trade but were utterly alien to conditions in Bengal. To quote from Echoes from old Calcutta by S Das Gupta and published by Naya Prokash ~ “Banyan is a person either action for himself or as the substitute of some great black merchants by whom the English gentlemen generally transact all their business. He is interpreter, head bookkeeper, head secretary, head broker, the supplier of cash, and cash-keeper, and in general also secret-keeper.
He puts in the under-clerks, the porter or doorkeeper, stewards, bearers of the silver, slaves, running footmen, torch and light-carriers, palanquin- bearers, and all the long tribe of under-servants, for whose honesty he is deemed answerable, and he conducts all the trade of his master, to whom, unless pretty well acquainted with the country languages, it is difficult for any of the natives to obtain access. In short he possesses singly many more powers over his master than can in the country be assumed by any young spendthrifts, steward, moneylender, and mistress all together.”
The cause lately originates in the demands justified by the Industrial Disputes Act, 1946 which was incidentally like a parting gift to India before the British rulers departed for good? They meant well, especially when one thinks of the arbitrary, exploitative behaviour of the employers in the early decades of the twentieth century and before.
The legislation however could not have foreseen its effects in the context of militant trade unions of the later decades. The militancy was not confined to Kerala and West Bengal but also prevailed in Maharashtra, as well as Haryana. The north was marked by muscle whereas the Mumbai region produced more interesting varieties including monetary militancy.
For example, a union led by a certain RJ Mehta, which lent money sufficient to keep body and soul together of the worker members through the entire strike period. The workers therefore did not get impatient to settle with the employers. The loans were recovered with reasonable interest from the hefty increments Mehta squeezed from the management.
Plus he took from the workers a large share of the increments for the first one year of the agreement. In Mehta-led agitations and strikes, no violence took place. The tactics, including the ultimate personal violence, adopted by Datta Samant, a medical doctor, were again unique. The managements had mostly no answer but to surrender to the demands. Some of the enterprises collapsed after a time.
To amend the ID Act substantially at this stage would be difficult; the trade unions have by now too many vested interests in the legislation. Even the affected workers would not like any undue changes. It is therefore best to frame a new law as an alternative to the ID Act. New projects could easily opt for the new law under which the workers are employed. For the established industries, let them carry on under the ID Act.
When their three, four or five contracts between the workers and employers expire, let the managements tempt or persuade the unions to sign the new contracts under the new Act, good for them. If not, carry on and renew their agreements under the old law.
From the workers’ viewpoint, under the old or current law, the statutory or retiring dues are not adequately protected, especially if the employer-company were to close down prematurely. They may or may not get their gratuity, leave encashment or even the full Provident Fund. Under the new bankruptcy laws, there may be quite a few quick and urgent closures.
The first step the alternative legislation should take is to plug this probable misfortune. The safest way to do so would be to give say a separate bank draft of 25 per cent of the monthly salary or wages every month. This draft should not be cashable for five years so that the employee cannot spend it immediately but willy nilly preserve it as a genuine saving.
The second feature of the new law should be that the wage be gross or all-inclusive and therefore without odds and ends in perquisites. This would enhance his/ her savings paid as part of the 25 per cent draft. Third, the appointment would be terminable with a month’s notice. This would encourage entrepreneurs to promote worker intensive projects, also seasonal businesses without fear of being burdened with employees without work to allot subsequently.
This fear keeps many a medium or bigger size employment intensive project from seeing the light of day. This is sad especially for the lesser educated or trained men and women. These are just the young people who need a break, an opportunity to learn a vocation on the job and prove that they can also ‘do it’.
This writer is an example; he had a total of only eight years’ formal education. Had he not got an early break, he might have had to live with being a clerk, or even a peon. There is today many a job being advertised, especially by public sector corporations, which however insist on the applicants being, say, graduates. Yet there can a good number of class, X and XII passed boys and girls who may prove brighter than graduates.
We also need to remember that there are a large number of schools and colleges which need to come up in the standard of education that they need to impart. The candidates consequently also vary a great deal in the quality of what they know although they hold respectable degree cards. The new law should take into account all these sociological realities and not just confine itself to the terms of employment.
The old or the current law is not merely obsolete but also indulgent. For example, it permitted trade unions to exert pressure on managements to employ more workers than necessary. One way was to assign designations to them. Say, a gum carrier in a cigarette factory. His department would require a refill every 45 minutes, a piece of work which would take him say ten minutes at a time or eleven times in the course of an eight-hour shift. Thus the gum carrier had say two hours’ work.
The other six hours, he sat around without work. Another example is to unload a wagon of tobacco, for which there were gangs of 14 workers. In case, two or three of the particular gang members were absent, the manager could not borrow substitutes from the next gang. He had to take on temporary workers while the next six gangs merely twiddled their thumbs.
Quite extraordinary as it may sound, most factory managers had to collect, by deducting from the wages, the trade union subscription of every worker. The intention was to bind every worker to the union which in turn often agitated against the company. The arrangement is called ‘check off’. So incongruous can be the results of a law when it is cunningly twisted.
The writer is an author, thinker and a former Member of Parliament.