LABOUR LAWS AMENDMENTS: Part 21

Industrial Relations Code is for Capital to Maximise Profits 

R Karumalaiyan 

THE Industrial Relations Code, 2019 has been introduced in Lok Sabha in the ongoing session. It seeks to replace three important labour laws – the Industrial Disputes Act, 1947; the Trade Unions Act, 1926; and the Industrial Employment (Standing Orders) Act, 1946. The BJP government, in its first tenure itself, mooted this bill, and uploaded it on the labour ministry’s website, in April 2015. The draft was then circulated among the central trade unions in October. Bipartite and tripartite discussions were held on this draft. 

The rights and benefits available to workers under these existing Acts were either diluted or in many cases, altogether eliminated. On the whole, the Industrial Relations Code Bill 2015 was meant to empower the employers to retrench workers and close down industries at their will and to change, unilaterally, service and employment conditions of the workers after observing certain formalities. That draft bill had some atrocious provisions to impose a virtual ban on the right to strike of the workers. Naturally no trade union worth its salt could agree to such proposals. Almost all the central trade unions unanimously opposed the government’s proposals in all the bipartite and tripartite meetings. 

By the end of September 2017, the labour ministry came with another version of the draft bill. That draft too practically ignored almost all the comments and proposals of the central trade unions. It only made a few minor and cosmetic changes to the 2015 version. Nevertheless, on November 20, the union cabinet approved almost the same version, called ‘Industrial Relations Code Bill, 2019’, and it was tabled in Lok Sabha on November 28. Left members in Lok Sabha opposed the bill at the introduction stage itself and boycotted the house, in protest. 

The basic direction of the Industrial Relations Code Bill, 2019 remains unchanged: it legally arms the employers’ class with comprehensive instruments to suppress the workers, drastically curb workers’ rights to fight for their demands, make it almost impossible for them to get organised into trade unions. It is nothing but a direct affront on the workers’ right to freedom of association and collective bargaining – provided by the Core Conventions 87 and 98 of the International Labour Organisation (ILO). It is nothing but a blatant attempt by this government to ensure a “trade union-free work place” for its corporate masters. This is the core element of the neoliberal trajectory that the BJP government has sincerely adopted and implemented through this piece of legislation. 

The bill starts its demolition operation from the definition clause itself. The ‘industry’ has been so defined to exclude all social, charitable or philanthropic services. The State played a prominent role in providing education, social and health services. Now all these services have been so commodified as to be sold in their respective market at a market rate. All these mega corporate hospitals and educational empires have become so large than ‘industry’ in all terms, but will not be covered under this code. Besides, after passing the bill in parliament, the central government reserves the right to declare/notify any ‘activity’ that does not comes under the definition of ‘industry’. 

Section 2 (zm) and 2(i) of the code has been so drafted that a large section of workers and employees can be pushed out of coverage by terming them ‘supervisors’ or ‘managers’. Those who are said to be employed in that so-called ‘supervisory capacity’ drawing wages in excess of Rs 15,000 will be excluded from the definition. Thereby all such workers will also be out of coverage of the code itself. Sub-section (iv) of Section 2(zm) leaves it open to the central government to revise the said amount by notifications that may be issued from time to time. The practice of branding a section of senior/skilled workers as ‘supervisors’/ ‘managers’/ ‘officers’, etc just to deprive them of their trade union rights and treat them as ‘non-unionised’ category, is already quite rampant in many establishments, particularly in the private sector. Moreover, fixing Rs 15,000 per month as the ceiling for categorising them as ‘supervisors’/ ‘managers’ is not at all rational and scientific. The wages vary widely within various establishments and between the public sector and the private sector. In many industries, particularly in the public sector, highly skilled workers get more salary than the so- called ‘managers’/ ‘supervisors’ in the private sector. 

Moreover, this is particularly ridiculous when the government of India has itself accepted Rs 18,000 per month as minimum wage for its employees, as per the recommendation of the Seventh Pay Commission. Does it mean that all workers will be categorised as ‘managers/ supervisors’/ ‘officers’ and be denied the right to form unions? Or is the government making clear its intention to apply different criteria for its employees and for the industrial workers? 

All persons employed in any trade or industry, are eligible to register trade unions including the unorganised workers. These requirements for registration, ostensibly, are similar to that under the Trade Unions Act, 1926. But more than one crore-strong schemes workers are, conveniently, left out of this definition, though they all were recognised as ‘workers’ in the 43rd Indian Labour Conference.      

A reading of section 9 however suggests that even if a trade union has complied with all the requirements prescribed under the code for registration, the registrar may refuse to grant registration to the union. Such discretion is not in conformity with the principles laid down in ILO Convention No. 87 and our courts’ judgments. Apart from this, the ILO Governing Body’s Committee on Freedom of Association had earlier pointed out that the minimum membership requirement of 100 workers for registration of a trade union and continuance of registration is also not in conformity with Convention No. 87. 

There is no time limit for registration unlike earlier versions of the code which stipulated a time-frame of 45 days/60 days for the registration of trade unions. The prescription of a time limit of 45 days has been a long-standing demand of the central trade unions which has also been ignored. 

After all these exclusions of workers and obstacles in registering trade unions, the code speaks on ‘recognition of negotiating unions/negotiating council’ without spelling out the mode of verification of membership. As per the principles laid down by the ILO Governing Body’s Committee of Freedom of Association in Case No. 2512 (India) recognition should be granted only to trade unions that are “independent and truly representative of the workers.” 

The code also provides for the recognition of central trade union/ federations by the central government as well as state trade unions by the state government under section 27. However, here again there is no clarity on the procedure by which such recognition is to be granted. 

More dangerously, the code overtly interferes into the functioning of trade unions. Under section 7(i) it makes it mandatory for trade unions to hold elections every two years to elect their office-bearers. As per the Trade Unions Act currently in force, such elections are to be held once every three years. As per the principles relating to freedom of association laid down by the ILO supervisory bodies, determining when elections should take place, should be left to the constitutions or rules of the respective trade unions. Such over-regulation on this aspect is not in conformity with ILO Convention No. 87. 

Sections 93(1) and 93(2) of the code, again more damagingly, try to interfere into the internal functioning of trade unions contrary to the principles relating to freedom of association as laid down by the ILO supervisory bodies. Section 93(1) provides that no person can be expelled from a trade union for refusal to take part in a strike that is considered “illegal” or be subjected to any disciplinary action. Then Section 93(2) enables such strike-breaking worker against whom any such action is taken to approach the civil court for ‘relief’ and the code empowers the court to either grant the relief of restoration of membership or a direction to the trade union for payment of compensation or damages to the concerned worker. Though trade unions/office-bearers have got immunities for discharging their duties, this section administers a deathly blow to its real functioning. 

In 2015, the BJP government had proposed allowing factories with up to 300 workers to retrench, lay off or closure without seeking the government’s nod in the Industrial Relations Bill proposed in 2015. All trade unions had then unitedly opposed this proposal of legitimising the creation of jungle-raj zones. This hotly debated Chapter VB of Industrial Disputes Act was cleverly managed under section 77(1) in this code, again, for the benefit of employers. It apparently looks like that the central government has withdrawn its proposal to give flexibility to big companies, in terms of manpower, to retrench or lay off workers and closure without seeking government permission as the code retains the same threshold limit of 100 workers. In the very next words, to quote, “or such number of workers as may be notified by the appropriate government”, the code assures the corporate world that their much-demanded flexibility will be taken care of by the governments. It may be recalled that in the past few years of BJP ruling, as many as nine states – Rajasthan, Gujarat, Jharkhand, Uttar Pradesh, Haryana, (United) Andhra Pradesh, Maharashtra and Assam – have allowed factories with 300 workers to retrench without official sanction. If the government has any spine, it is natural to expect that all that states’ amendments would have been nullified by this code. But here that is not the case. 

The central government has proposed to bring fixed-term employment as part of the labour law, instead of administrative rules, so that it will take effect across India. In March 2018, the government had notified fixed-term employment in the Standing Order Act rules, allowing industries to hire workers for a fixed tenure and fire them immediately after the tenure expires. None of the states had adopted the central government’s rules and the capital found it hard to maximise profit from the central government’s fixed-term employment rules. Accordingly, the central government proposed the same in the body of the Act, ie, in the code to facilitate the engagement, nay, exploitation of workers on a ‘fixed term employment’ basis. 

Despite the unanimous opposition of the trade unions and the strong opposition of the working class voiced through innumerable protest demonstrations and strikes, the BJP government is going ahead totally ignoring the voice of the workers. The need of the hour is to elevate the struggle to the combative level both at the national and work place levels and the same must reflect in our massive mobilisation in the January 8 General Strike called by ten major central trade unions.