Workers’ Rights and Labour Laws A backgrounder for the workshop on labour to be held from 29–31 December 2000 at the National Conference on Human Rights, Social Movements, Globalisation and the Law at Panchgani, Maharashtra Published by the India Centre for Human Rights & Law 4th Floor, CVOD Jain School 84, Samuel Street Dongri, Mumbai 400009 Phone +91.22.2375.9657 E-Mail [email protected] i About this Backgrounder The following collection of articles, analyses and documentation is meant to serve as a backgrounder for the three-day workshop on labour held during the National Conference Human Rights, Social Movements, Globalisation and the Law held at Panchgani, Maharashtra, from 29–31 December 2000. Ranging from the abstract and academic to the documentary and polemical, these pieces are all drawn from Mumbai- based scholars and trade unionists involved in the labour movement, and most of them connected to the Trade Union Solidarity Committee (TUSC), whose documentation comprises a large part of this collection. While not making any claim to an exhaustive exploration of the dynamics of changing labour law and workers’ rights — the limitations of this collection are obvious — it is hoped that it will serve as a useful handbook for this workshop and as a resource for activists, lawyers, scholars and journalists during the workshop and after it. This backgrounder is the first in a series of occassional papers on labour issues to be published by the India Centre for Human Rights & Law, Mumbai. The editors would like to acknowledge the support and assistance provided by the following individuals and groups in compiling this backgrounder: Dr Jairus Banaji and Rohini Hensman of the Union Research Group; N. Vasudevan of the Blue Star Employees Union and Joint Convenor of the TUSC; Bennet D’Costa of the Hindustan Lever Employees Union; Dr K R Shyam Sundar of Guru Nanak College, Sion Koliwada; and Gayatri Singh and Meena Menon of the Maharashtra Kamgar Sangharsh Samiti, who have co-organised the workshop. “India: Workers’ Rights in a New Economic Order” by Jairus Banaji will appear in the forthcoming issue of Biblio: A Review of Books and is reproduced here with the kind permission of Alice Albinia, Assistant Editor. “World Trade and Workers’ Rights: To Link or not to Link?” by Rohini Hensman and “Second National Commission on Labour: Not up to the Task” by K R Shyam Sundar originally appeared in Economic and Political Weekly vol.35, no.15, 8 April 2000, pp.1247–1254, and vol.35, no.30, 22 July 2000, pp.2607–2611, respectively, and is reproduced here with the kind permission of Padma Prakash, Senior Assistant Editor. Jairus Banaji transcribed the “Rationalisation of Labour Laws: Amendments Proposed by the Government of Maharashtra” into electronic format from the state government circular. Whatever oversights, errors, or lacuna which occur in the following pages are entirely the responsibility of the editors. Shekhar Krishnan and Mihir Desai India Centre for Human Rights and Law Mumbai, 20 December 2000 ii Table of Contents I. Workers’ Rights India: Workers’ Rights in a New Economic Order The First Arvind Das Memorial Lecture Jairus Banaji 1 World Trade and Workers’ Rights: To Link or Not to Link? Rohini Hensman 8 Industrial Relations Problems in the Matter of Supervisory and Management Staff: Law, Practices & Procedure 22 Bennet D’Costa Who Are We? 36 Note on Trade Union Unity 40 Charter of Workers Rights 42 Trade Union Solidarity Committee (TUSC), Mumbai II. Labour Laws Rationalisation of Labour Laws: Amendments Proposed by the Government of Maharashtra 45 Will Maharashtra Government Turn the Clock Back? Labour Law Amendments: Charter for New Slavery Bennet D’Costa 47 Second National Commission on Labour: Not up to the Task K.R Shyam Sundar 52 III. Submissions by Mumbai Unions to the Second National Commission on Labour Hindustan Lever Employees Union 62 Trade Union Solidarity Committee 85 All-India Blue Star Employees Federation 94 Kamgar Aghadi 100 Trade Union Centre of India 105 Thekedari Paddhati Virodhi Manch 112 iii I. Workers’ Rights India: Workers’ Rights in a New Economic Order: The First Arvind Das Memorial Lecture1 Jairus Banaji With traditional forms of collective bargaining failing in the face of rapid corporate restructuring, what perspectives can the unions evolve to ensure their survival and growth? This paper argues that the labour movement has a powerful stake in shaping the agenda of corporate governance, both because implicit contracts are impossible to enforce without a role in strategic decision-making, and in the sense that public corporations can no longer be conceived merely as shareholder domains. However, in a country like India where the majority of wage earners are unorganised, the workers’ rights clause has a major role to play. Following the large-scale defeat of the Bombay textile strike in the early eighties, employers mounted a concerted offensive against organised labour which was sustained into the nineties. The system of industrial relations ran into trouble in the eighties as managements resisted collective bargaining and began first a gradual and then a large-scale restructuring of employment. It is possible to argue that after 1991, with increasing competitive pressure from product markets, deregulation was squeezing profits and forcing employers to cut internalised employment systems in a more dramatic and decisive way. For example, throughout the eighties large companies had been reducing workforces through natural wastage, but from the early 90s they began to structure so-called voluntary retirement schemes to induce large- scale exit from companies. This began in 1992 when the Swiss multinational Ciba- Geigy negotiated a mass retirement for 902 workers in its Bombay factory. That may have been prompted by a circular from the ministry of finance which suggested tax breaks to encourage companies to downsize. Since then there have been numerous and (for many firms) repeated voluntary retirement schemes with a very considerable loss of jobs in manufacturing. However, it is helpful to keep the two phases distinct. In the eighties lockouts were used to weaken union resistance to management demands and the gathering assault on workers’ rights was not, therefore, the simple outcome of liberalisation, which came several years later. Secondly, outsourcing spread basically in the eighties, suggesting that crucial aspects of lean production had already been introduced by employers in India well before they became management orthodoxy on a world scale. The reasons why manufacturing firms subcontract are complex and vary from industry to industry, so there is no point in overstating the issue. Suffice it to say that without the extensive outsourcing networks created in the eighties, the voluntary retirement schemes of the 1990s would just not have been conceivable. Thirdly, if the resistance to bilateral settlements meant a gradual erosion of bargaining rights, other management moves in that period were more explicit. Bargainable jobs were redesignated to remove them from the union category, sales and supervisory staff were denied the right to join unions, union leaders were repeatedly chargesheeted, suspended or dismissed on various trumped up charges, federations representing workers in several establishments of the same company were fiercely resisted, etc. Judicial decisions, often the inevitable outcome of these moves, 1 First given as theinaugural Arvind Das Memorial Lecture in New Delhi, 24 October 2000, this paper is forthcoming in Biblio: A Review of Books, and is reproduced here with the kind permission of Alice Albinia, Assistant Editor. Readers who would like to consult the full version of this paper, including footnotes, may do so at the Queen Elizabeth House web site, http://www2.qeh.ox.ac.uk. The body of the text is otherwise the same. tended to reinforce the position of employers, legitimising the erosion of employees’ rights though most of the eighties and into the following decade. Standing back from all this and trying to gain some sense of the general trend, one might say that the industrial relations system broke down in the eighties and was never put back on its feet in the years that followed. Managements had recovered initiative in a decisive way after the union expansion of the sixties and seventies, and the labour movement entered the economic reforms era in a defensive mood and lacking any strategy for renewed growth. With the voluntary retirement schemes of the last few years, certain sectors of the union movement have seen major contraction, namely, the so-called employees’ unions which are tied to a particular plant or company. If the plant closes down, the union disappears, unless it has members in other establishments. The downsizing of offices and factories has thus also been a downsizing of one of the more advanced and combative forms of trade unionism in India. Let me turn, somewhat rapidly, from this background to ‘Corporate governance’. This, as you know, refers firstly to the general drive in most markets in the industrialised world, including countries like India, to define rules which encourage companies to function in more professional, transparent, and socially accountable ways, insofar as they rely on some form of capital market financing. These rules have increasingly acquired a formal expression in the so-called ‘codes of corporate governance’ which spread rapidly in the late 90s, drawing their inspiration from the 1991 Report of the Cadbury Committee, which emphasised self-regulation and drafted recommendations for independent boards and more reliable corporate reporting practices. Cadbury was largely a reflection of the then prevailing state of opinion in the UK accountancy profession, which saw itself under mounting public pressure, and of course of the growing concerns of institutional shareholders, and the basis for its rapid diffusion as a model can likewise be explained by the spectacular growth of US and UK institutional investments in European and emerging markets in the 1990s.