Law’s labour lost: return of early 20th century precarity?

May 19, 2020

Suspension of labour laws will have adverse effect on labour and the wider economy

By Maya John

In the backdrop of the lengthy national lockdown, resulting slump in the economy and growing talk of labour shortage, State governments across India have been rolling out special measures to provide enhanced incentives to businesses. Lately, the governments of Uttar Pradesh (UP) and Madhya Pradesh (MP) have announced the most comprehensive measures for complete exemption of businesses from almost all labour laws for the next three years and 1000 days, respectively.

The key relaxations include extension of shift timings from 8 to 12 hours, augmenting overtime per week to 72 hours, empowering employers to change shifts as per their convenience and to settle disputes without approaching the labour courts. Apart from these two States, the governments of Rajasthan, Gujarat, Punjab, Haryana, Himachal Pradesh, among others have at present enhanced shift timings to 12 hours.  

In reality, such measures have their precedents in the last three decades, which have seen extensive liberalization of the Indian economy. Increasingly since the early 1990s, the emerging consensus within the ruling elites has been that labour laws act as a fetter on the development of the free market.

The laws have been steadily projected as a hindrance to employers’ efforts to change production arrangements and introduce newer modalities of work and employment relationships that have evolved around increased casualization and informalization.

However, claims about the lack of labour market flexibility in India prove unsustainable, given the fact that the bulk of landmark labour laws elude a large section of workers who have been denied rights and benefits on the pretext of less regular work contracts, length of employment, nature of establishment (seasonal or perennial), etc. It is only a minuscule section of organized workers who have been covered by ‘protective’ legislation. 

In the post liberalization era, employers’ recommendations for dilution of labour laws have increasingly held sway. This is evident in the watering down of the provisions of factory inspection, the growing paradigm of self-certification by employers of their compliance with labour laws, and the tweaking of many statutory labour laws on occupational safety standards, work hours, minimum wage, compensation, industrial disputes, etc. by successive governments, both at the state and central level.

Having said this, most of these prior relaxations were aimed at smaller establishments where the collective strength of labour proved comparatively less capable of resisting such onslaughts.  

Evidently then, capital and the state seek to circumvent the possible reaction and resistance of more organized labour of large establishments by using the exceptional circumstances triggered by lockdown to further the interests of employers. It is in this light that we must assess the amendments to shift timings, as well as withdrawal of the state from intervention in labour disputes and from overall regulation of labour–capital relations.

Importantly, the repercussions of these measures are detrimental not only for labour, but the economy and society as a whole. To elucidate, the enhanced shift timings and imposition of longer hours as overtime amount to the over-exploitation of some workers, and consequently, the unemployment of others who are seeking work. With every two workers forced to perform the work of three, we can surely expect a negative spiral effect not just in terms of swelling unemployment, but also in terms of declining purchasing power of the working masses.

Such conditions shall widen the net of impoverishment as more and more fall into an endless trap of poverty, and before we know it, the economy could slide into a longer and more sustained slump.    

Apart from these impacts, it is also worth noting the repercussions on the domain of the workplace itself. The recently announced changes to labour laws are an epitome of deregulation of a large number of work relations. In other words, deregulation marks a sinister return to the more brutal, early colonial precarious labour conditions wherein the state refrained from regulating labour–capital relations, using the logic that such social relations fall within the private domain.

Indeed, with current governments steadily withdrawing from regulation of industrial relations, the domain of the workplace shall be reduced to a private domain in which employers shall yield enhanced power to unilaterally fix wages, extract overtime, manage leaves, determine compensation, etc. Once inside the factory, labour shall be under the blanket authority or complete command of employers.

Given that labour inspection has shifted towards the self-certification system and third party inspection by the employer, the private power of employers is expected to grow manifold. 

This paradigm shift in which labour–capital relations are no longer regulated through the public authority of the state, represents the generalization of the highly precarious paradigm of work relations typical of the informal sector. In the informal sector where a vast majority of working-class men and women are labouring in lowly paid, labour intensive jobs, the absence of public power of the state has nurtured the condition of quasi-magisterial powers of employers.

Now of course, such enhanced private power or quasi-magisterial authority of employers with respect to the work contract will be the norm across the formal sector as well, with the state only making interventions using the criminal law framework to deal with collective resistance of workers. 

The attack on higher segments of the labour market shall have a spillover effect on the lower segments of the labour market where informal workers will be exposed to greater exploitation. The possibility of this is undeniable, considering what enhanced deregulation of work relations would mean in terms of periodic unemployment of higher skilled workers, who shall proceed to crowd lower-skilled, informal sector jobs, wherein the existing workforce (predominantly comprising of women and children) shall be compelled to negotiate their own survival through lowering of wages, longer spans of overtime, enhanced quantum of work, etc.

It is evident that the latest relaxation of labour laws facilitates the institutionalization of the work contract as a private, individual matter between employer and employee. In this way, the present conjuncture marks the end of labour law as we have seen it for most part of the 20th century.

The unfolding process of extending incentives to private capital exposes an even wider segment of workers to precarity, while pushing the already overexploited segment of ‘informal’ workers into greater insecurity. The diminishing rights of workers to life, livelihood and liberty also prompt us to question just how sustainable economic recovery shall be in the post-lockdown period.

Expectedly, the coming months shall be filled with heightened industrial conflict.

The author teaches in University of Delhi and has worked on the history of Indian labour law .

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