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Social Dialogue

The Missing Link in Labour Reforms

K R Shyam Sundar (krshyams@xlri.ac.in) is with the Xavier Labour Relations Institute, Jamshedpur. 

The BJP government might have embarked on knee-jerk labour reform measures with an eye on the capital market, but sustainable goals on labour reforms can only be achieved through social dialogue. The absence and stagnation of social dialogue with regard to these reforms reveals the positional rigidities of all the constituent parties. 

The virus of labour reforms is very much in the air since the Narendra Modi-led Bharatiya Janata Party (BJP) government assumed power at the centre.  Rajasthan has, in July, passed bills in the assembly in order to amend the implementation of four key central labour laws (Jha 2014). Haryana and Madhya Pradesh followed suit with their own proposals to reform labour laws (Nanda 2014).  The central Ministry of Labour and Employment has taken up labour reforms in a serious manner.  The Rajasthan government went on with the reform measures even as the trade unions, including the Bharatiya Mazdoor Sangh (BMS), the labour union linked to the BJP through their common affiliation to the Rashtriya Swayamsevak Sangh, were protesting outside the assembly.  The central trade unions have also complained to the Union Labour Minister Narendra Singh Tomar against the initiatives of the Rajasthan government.

Meanwhile, despite the assurances by the union labour minister on 24 June, 2014 to the trade unions that a tripartite discussion would be held by the government before moving ahead with labour reforms (Hindu Business Line 2014) and that the welfare of the working class would be prioritised, the Union Cabinet has passed the proposed labour law amendments.  The two bills have been placed for discussion before the Lok Sabha.

Absence of social dialogue

The aforementioned two instances of the government riding roughshod over aggrieved partners is a worrying trend.  The absence of social dialogue despite assurances is contrary to the spirit of democracy, as dialogue and negotiations with lobbying organisations form the core of public policy-oriented governance.  Political will, commitment to social dialogue (both supported by visible public actions), existence of trust and inclination on the part of the constituents to reconcile conflicting interests for larger social and economic gains (which eventually will benefit all the stakeholders) are basic principles of tripartite social dialogue. All of these are missing in the social dialogue process in the recent years. This has left us with a frustrating policy stalemate and aggressive state action. 

India has ratified the Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144) and the spirit of the Convention (though meant for dealing with matters concerning transaction of International Labour Organisation (ILO) matters) is that the government must hold consultations with the representative organisations of employers and employees. It is a process involving social actors with equal strength to seek “solutions” with regard to common issues.  ILO Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113) specifies the modus operandi of joint consultations.  

Tripartite social dialogue is not new to India.  It has been in existence since the Second World War when the British government constituted Indian Labour Conference (ILC) among other consultative bodies to efficiently aid its war efforts.  Tripartite bodies exist statutorily or otherwise in India.  After a glorious period of fruitful law and policy-making through the 1950s and the early 1960s, it fell into disrepute later and was not functional for more than two decades since the early 1970s.  It is important to note that the introduction of neo-liberal economic reforms necessitated the revival of tripartite social dialogue and in its initial stint it did deliver some policy output. 

It has made significant contributions in designing a social safety net (e.g. national renewal fund) and in dealing with industrial relations during the economic crisis of 2008-09.  It has since then degenerated into a “talking shop” and its proceedings lack sanctity and seriousness.  However, the failure of a forum for social dialogue cannot be a reason for consigning social dialogue, as an institution, into the “policy dustbin”.  It is the failure of governance and of the constituents rather than the institution. 

It is argued that tripartite consultation is a painfully long process. This kind of a consultative democratic process, it has been argued, does not hasten formation of timely economic and social policies (which hurt economic growth) and it often constitutes an alternative to the law-making body (Parliament or legislative assembly) in a democracy. 

Retraction of state promises

It must be recognised that it is a lot tougher to address core issues of labour reform that aim to alter or remove the existing rights, than pushing an altogether new labour reform measure.  Further, the trade unions have lost faith in not only the government but also the so-called promises of benefits arising out of proposed reform measures.  Academic research is not conclusive either. It is well-known that critical reforms could take years, even decades. 

It is unfortunate that the state has not delivered on many of the promises it made to the trade unions – for example, the assured and universal monthly pension of Rs 1,000, better coverage of social security laws, reform of minimum wages and so on. Given that the government has gone back on all its promises, the trade unions cannot be faulted if they lost faith in the state.  The trade unions in India have always complained vociferously that the high-ranking ministers including the prime minister grace the events organised by the employers but hardly find time for the events of the workers’ organisations.

After the national strike called by 11 central trade unions in February 2013, the then prime minister Manmohan Singh and his cabinet members had met the trade union leaders thrice. They were assured that “matters were under active consideration”. The policy in-action or non-action raised serious questions on the effectiveness of national strikes; at the same time, it also weakened the “policy credibility” of the government.    

Further, unforgivably, the statutory tripartite bodies (the consultative bodies under labour laws like the Minimum Wages Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1970 and so on) were not reconstituted in time, and even if they were, their working has been questionable.  Tripartite social dialogue forums at the state level like the state labour advisory boards (SLABs) do not exist or function poorly. 

The social actors complain that the state fails to do its homework, adopts bureaucratic methods, does not implement even the unanimous conclusions reached in the tripartite social dialogue forums or bodies.  The state on such terms cannot claim “legitimacy” in a tripartite social dialogue set-up.  The state’s long-term commitment to social dialogue and its creation of trust are missing.

If tripartite social dialogue has failed because of the government, the two other social actors in the process – employers’ organisation and trade unions, also share some guilt. Social dialogue operates on the principle of reconciliation of conflicting interests; or else why does one require social dialogue? The tripartite bodies become forums for the constituents to ferret out “well-known historical positions” which mean high level of rigidities.  They operate on the lurking fear of loss of ground and image of weakness if either is seen as compromising agents.  The near-stagnancy in the formal national framework testifies to the positional rigidities of the constituents.  It is a static game which is played endlessly to tire out the parties involved and elicit any possible solution.

The Modi government is clearly sending signals that it is keen to execute labour reforms and expects the capital markets to respond to these “signals”, to start with.  It is the capital market compulsions that necks out the social dialogue institution.  However, this is at best a short term solution.  In the long term the government would do good to value social dialogue over knee-jerk reactions even though some policy implementations could get delayed.

References

Hindu Business Line (2014): “Trade unions meet Labour Minister; tripartite talks with jute industry in July”, 25 June, available at http://www.thehindubusinessline.com/economy/policy/trade-unions-meet-labour-minister-tripartite-talks-with-jute-industry-in-july/article6145336.ece, accessed on 8 August 2014.

International Labour Organisation (1976): “C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)”, available at http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312289, accessed on 8 August 2014.

Jha, Somesh (2014): “Rajasthan Assembly passes labour law changes”, Business Standard, 1 August, available at http://www.business-standard.com/article/economy-policy/rajasthan-assembly-passes-four-labour-reform-bills-114073101662_1.html, accessed on 8 August 2014.

Nanda, Prashant K (2014): “Haryana plans change in labour laws, a la Rajasthan”, 17 July, Livemint, available at http://www.livemint.com/Politics/H62XsBd83z6MtmuII1EDsL/Haryana-plans-change-in-labour-laws-a-la-Rajasthan.html?utm_source=copy, accessed on 8 August 2014. 

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