At the outset many thanks for inviting me to address this seminar. The subject is ‘Challenges to the Trade Unions due to Growing Precarious Work in Organised Sector.’
1. I worked in the corporate world for over 36 years. I was always aware of the precarious work. I retired nine years ago when I decided to explore the world of Employee Relations from all angles. It took me to factories in many cities and to interview many trade union leaders. I interviewed several workers. The reality as it unravelled before me, was not unknown, yet it was shocking.
2. In my presentation today I will rely less on numbers and more on life stories to make points. The numbers are available in plenty if you google, but the life stories which tell us the impact of precarious work on men and society are in terrible short supply, hence my choice of the stories.
3. The title of this seminar uses a word ‘Precariat.’ Wikipedia tells us that “in sociology and economics, the precariat is a social class formed by people suffering from precarity, which is a condition of existence without predictability or security, affecting material or psychological welfare. The term is a ‘portmanteau’ [meaning linguistic blend of words] obtained by merging precarious with proletariat.” Wikipedia also tells us that “the proletariat is the class of wage-earners in a capitalist society whose only possession of significant material value is their labour-power (their ability to work).”
4. So precariat is a social class formed by wage earners in capitalist society and they suffer from precarity.
5. Precariat is a product of neo-liberal capitalism. So what is neo-liberal capitalism? Prabhat Patnaik explains it well, “Neo-liberal capitalism” is the term used to describe the phase of capitalism where restrictions on the global flows of commodities and capital, including capital in the form of finance, have been substantially removed. Once an economy has got sucked into the vortex of globalised financial flows, its State willy-nilly has to bow to the caprices of international finance capital and pursue policies favoured by it. This fact has a number of implications; and these implications constitute the salient features of neo-liberal capitalism.”
6. There are two important implications, Mr Patnaik points out:
a. First, neo-liberal capitalism is marked by a re-location of activities from the advanced to the underdeveloped world, to take advantage of the low wages prevailing in the latter, for producing for the world market.
b. Second, it alters the character of the State everywhere, so that the State, instead of apparently standing above classes and defending the interests of all, including even the oppressed classes, becomes more openly and directly linked to the interests of the corporate-financial oligarchy….”
7. This should corroborate our experience. There is not a day when foreign direct investment is not mentioned in the press. That is the focus of all economic activities. The growth of ‘precariat’ is at a high pace since the 1990. It is the year when globalisation arrived in India. There is a reason why this happened. In order to fulfil the objective of growth, the Government of India must get foreign direct investment so that more employment can be created. But the FDI comes if you are competitive. Under these circumstances the Government comes under pressure to lower labour standards as well as wages so that the investments are attractive. But doing so defeats the entire purpose which is to improve standard of living and well-being of people.
8. Let us capture the situation and the trends:
a. The Government has repeatedly announced that it will undertake labour law reforms. It is also under pressure from the foreign investors, our Press and employers to undertake reforms quickly.
b. The thrust of the reforms is providing exit policy. So we have a few states allowing closures if the number of employees is less than 300. The number of States allowing such a provision is expected to grow.
c. There are a number of studies which show that this is not really a hurdle to industrial growth. But this voice is lost in the din created by the Press.
d. To make matters worse, applicability of The Factories Act is changed. This will mean more number of workers will get out of coverage and will experience precarious work.
e. The contract workers employment which was regulated with greater rigour has been allowed with impunity. State is not regulating this effectively. Unions have lost power to resist, and in some cases they have connived with employers. It is common to find the ratio of permanent workers to precarious workers as 1:10. In some industrial centres in Gujarat the migrant workers help make this ratio extremely skewed. In some industries, one of them a big player in the steel industry, not one permanent worker was employed and this was flaunted as a major achievement.
f. The number of disputes before Labour and Industrial courts is all time low. This shows that trade unions have given up their role and so also the State as the watch-dog.
g. The Government has helped create more precarious work by endorsing schemes like Yashaswi Earn and Learn, and NEEM. The Government has effectively endorsed precarious work.
h. The real wages of workers have shown negligible increase in the last twenty five years. This also means that benefits of globalisation has not percolated down to workers at all.
9. Let us watch this video to understand how things work in practice to produce precarious work.
Here is a summary of what Swapnil Marathe said in this video:
I have worked for six years at Hyundai, but now I am removed from service. I worked for four years under the Yashaswi Scheme of Earn and Learn. Under the scheme we would get a Diploma if we completed the course successfully. We were required to work for 120 hours overtime in a month. So it was not possible to attend classes and finish our Diploma course. [The recognition of this Diploma course was later withdrawn]. We were paid Rs 8,500 as stipend in the first year, and this was increased every year by Rs. 1000. But effectively we used to get Rs. 7000 in hand during the first year as they would make several deductions. Very often we used to lose Rs. 1000 as incentive. They deducted Rs. 500 for use of transport facility. Sometimes they used to cut our pay for reasons we never understood. So we decided to stop work. We camped outside the factory for two days. Then they brought goondas – they came in two Scorpios and a Sumo. They were armed with hockey sticks. We told them don’t beat us. We can’t fight with you. So they got undertakings written from us. After completing four years they gave me a break and then put me under Yashaswi NEEM. They paid me Rs 14500. But after completing one and a half year they transferred me suddenly to another factory at Ranjangaon. They said they will pay me Rs. 10000 pm.
Ranjangaon is far away. And how to manage my family in Rs 10000? My wife and I have two children. I have to send money for my aging parents who stay in our village. Last year I spent Rs 50,000 because my father met with an accident. ……How to survive here, Sir?
10. Option Positive conducted a study of 113 establishments in Chakan, Ranjangaon, Pimpri-Chinchwad, Baramati region, covering all major industries. Here are some findings:
Out of the 1,03,882 workers employed in 113 organisations, workers in permanent employment were 39,125 [37.66%], Contract workers were 40,423 [38.91%], workers in temporary were 14,110 [13.58%] and Trainees are 10,224 [9.84%]. In other words, the ratio of permanent to ‘flexible’ manpower was approximately 38:62.
11. My work took me to Umbergaon often. I sponsored a study of contract labour. Umbergaon has mostly migrant labour – they travel from Uttar Pradesh and Bihar. Some come from Nepal in search of work. Here are some excerpts from our study:
They work for 12 hours a day. That is how their pay is fixed, it is one and a half times the minimum wage. [Adivasi ladies are employed to work for eight hours and they are paid minimum wages.] Working twelve long hours is less of a problem than working with high handed supervisors. A worker’s day (7 am-7 pm shift) starts at 4 o’ clock in the morning. Besides getting ready, he needs to cook food for himself and for his roommates who will return from night shift. Travel time from their accommodation to company is approx. 20 mins and they are expected to report sharp at 7 am at the Company gate. Late reporting means being marked absent.
Most workers are ‘forced bachelors’ or bachelors. When one is irregular in early routine, food is the casualty. Due to paucity of time, one chooses to get ready and reach factory in time without the tiffin. One has to go out for food either by taking half day off or fast in absence of canteen within the factory premises. This usually turns out to be lose-lose since company loses half a day work while the worker loses half a day salary.
When contract workers leave the company or takes unannounced long break, their data becomes dormant in register. When one resumes the duty, Contractor makes a new card for the contract worker. It is understood that very often a contract worker is registered with different name than earlier. In many cases, adequate identity proof documentation is unavailable.
Under the pretext of above, treatment to Provident fund becomes suspect. Contract workers, due to their limited understanding and hearsay, are led to believe that their earlier PF is null and void. While PF deduction is mandatory, its further allocation to respective accounts is dicey especially due to interrupted jobs, lack of identity proofs etc. Contract workers leaving the company within 6 months or in 1 year are most probably getting deceived. Contractors maintain account for each worker for the retention portion of their wages. Contractors pay part amount to workers when they break from the job and settle the balance when they come back from village.
When so many young and migrant workers stay in a city, it is also an invitation to AIDS. It is not without reason that Surat is considered as AIDS Capital of India. The city has exceptionally high population of migrant labour.
12. We have seen how so called skill building schemes have been misused to create precarious labour. In the second example we noted how migrant labour is systematically exploited. The situation in Industrial Model Township in Manesar is not very different.
13. The state of precarious work there is well captured in the recent report of PUDR [Peoples Union for Democratic Rights]. This report is about how workers are working in inhuman conditions in SPM Autocomp Systems Pvt. Ltd., Manesar. It also gives details of how workers’ action to form a union is quelled by management and the State alike, using highly violent measures. This is what the report of PUDR says:
Following this, on 18 September, the workers filed an application with the Union Registrar at Chandigarh for registering a union. Some 62 workers signed this application and it has the support of all 180 permanent workers employed.
On 23 September, a collective demand notice was submitted by the workers to Assistant Labour Commissioner’s (ALC) office in Gurgaon. The demand notice mentioned increase in the basic wage, increment, double rate overtime etc……The management responded to the union application and demand notice with hostility and coercion. It exacerbated the existing repression and singled out those who are perceived to be involved in the union activity and attacked them in multiple ways. Open and direct threats were given to seven workers in a ‘meeting’ with the owner. Some, like Sitaram, were punished and made to sit inside a ‘room’ in the plant and prevented from working. Three were forced to sign papers stating that they were not involved in the formation of the union. Simultaneously, the owner used his political clout via an ex-Sarpanch of neighbouring Kesan village and goons and bouncers were sent to the workers’ residences for three successive days. Besides muscle power, monetary incentives have been used for buying out workers and for forcing them to leave the factory premises. One union member has reportedly been bought over.
The process of repression reached a new low on the morning of 10 October when the management called for a ‘negotiation’ meeting with the union members, including terminated workers. The meeting was staged as the management’s goons kidnapped key union advisor, Dheeraj, and prevented him from attending the meeting. From ten in the morning till three in the afternoon, Dheeraj was driven all over Manesar and not allowed to use his mobile phone. Inside the meeting, the management used Dheeraj’s absence to browbeat the workers. However, even while they were unaware of Dheeraj’s whereabouts, the workers refused to speak without legal counsel. The management then decided to change its tactics and it physically disrupted the meeting and abused the workers and forced them into hired cars. They were taken to the lawyers’ canteen in Gurgaon court and kept hostage till about eight in the evening and allowed to leave only after they signed papers stating their withdrawal from union activity. In the next few days, bogus calls were made to two union advisors, Dheeraj and Akhilesh, informing them that an FIR had been lodged against them. On 14 October, nine workers who had been forced to sign the withdrawal letter were prevented from entering the factory premises.
14. We have seen three cases of precarious work. They earn low wages. Their employer flouts labour laws. They are prevented from forming union. They can’t lead a decent life, their earnings are uncertain. All the three are of workers in cities. We can see that millions of workers in our country are victims of precarious work. I thought that this situation must be peculiar to India. A look at ILO documents informs me that this is a world-wide phenomenon!
China, the country that has been at the epicentre of the globalization of production in the past twenty years, is a case in point. While employment in the private sector grew by leaps and bounds, much of it was precarious in character as the labour market was segmented by internal migration status, but also as virtually all jobs created since 1986 were based on fixed-term contracts. Census data from 2005 on urban workers show that while 73 per cent of unofficial rural migrant workers were employees, 47 per cent had no contract, 25 per cent had short-term contracts and only one per cent had a long-term contract.
South Africa is another country where third-party contract labour has grown significantly in recent years, in an apparent drive by South African employers to subcontract many of their activities.
In fact, precarious labour is the norm in Africa.
15. The ILO document also gives many definitions of ‘precarious work.’ I prefer the definition of The European Metalworkers’ Federation (EMF) which uses the term in a broader sense: “Precarious work is a term used to describe non-standard employment which is poorly paid, insecure, unprotected, and cannot support a household”.
16. I will now discuss the challenges before the trade unions. One of the defining characteristic of precarious work is that the nature of employment relationship. Take the case of Swapnil Marathe who was engaged through Yashaswi Institute. On the face of it, he is not an employee but he is a trainee. When he gets appointed subsequently four years later and carries on the same job, he is a trainee under NEEM. So it is convenient for Hyundai to say that he is not their employee. That absolves them of any responsibility and liability towards Marathe and such others. While the Court may lift the veil and discover the true relationship, it will take a few years before they declare Marathe an employee of Hyundai. The ambiguity of the employment relationship and the prolonged litigation makes recourse to the law an impractical solution for a trade union. Yet they must pursue this measure because if the courts recognise malpractices of precarious work under various garbs, it would force the State machinery to take preventive measures.
I am aware that a certain organisation is likely to file a public interest litigation soon. I hope that they succeed. If they do, it will be a body blow to the malpractices of engaging persons as trainees.
While on the subject, I must observe that the NEEM or National Employability Enhancement Mission is a scheme that practically sanctions exploitation! I was under the impression that this was the work of Indian Government, but I now realise that such schemes exist in many parts of the world! It is not without reason that precarious work is a global phenomenon!
Unions have unfortunately been always an offshoot of political parties in our country. With weak influence of unions following globalisation, political parties seem to have paid little attention to them. Getting labour law changes or policy changes that will prevent precarious work seems to be another uphill task.
This is further complicated by the adverse public opinion about trade unions. The impression in public mind is that trade unions were so far run by those who saw money making opportunities. Corruption among the union leaders was an open secret. Trade unions have lost sympathy of the common man. How to influence him to support them is a huge challenge.
The unions need today a leader who can move masses, create awareness among people of how precarious work is creating precarious society. Somebody like Dr Datta Samant who is capable of taking on the current system, who can move masses, who can bring about disruptive changes. A disruptive leader who will guide through chaos, thrive on uncertainty and who will write a different set of rules.
The central dilemma in the precarious work case is whether organisations exist for betterment of society or whether society must bow to the forces of neo-capitalism. The answer is in the balance as Henry Mintzberg suggests. I would like to quote him :
“Capitalism certainly needs fixing, especially the frenetic stock markets and the deplorable pursuit of Shareholder Value. But that will happen, not by capitalism getting itself right so much as by society getting capitalism into its rightful place, namely the marketplace. How did a word coined to describe the funding of private enterprises become the be all and end all of human existence? It is the balance in society that we need to get right, and that will not be done by business alone, or, for that matter, by government or community action alone.”
Thanks Ladies and Gentlemen for giving me a patient hearing.
Vivek S Patwardhan
[“Challenges to Trade Unions due to Growing Precarious Work in Organized Sector” – My Address at the Uni Global’s Seminar. At YWCA, Mumbai, on Dec 18, 2017]