At a public event during his recent visit to India, French economist Thomas Piketty drew attention to the “hypocrisy” of the Indian elite in the way it wanted to pursue capitalist development — obsessed with growth, but indifferent to welfare. Nowhere is this hypocrisy more evident than in the debate over labour reforms.
The prevailing wisdom is as follows: India has too many antiquated labour laws which hamper growth and investment. The need of the hour is a brisk pruning of this unruly thicket of pieces of legislation into a handful of elegant laws that make it easy for companies to hire and fire as they wish, and pay whatever salaries they can get away with. Once such laws are in place, foreign investment will flood into India, manufacturing will shoot up, and millions of Indians will find employment and “make in India” happily ever after.
From an industrial relations perspective, turning this corporate dream into reality requires two things: one, trade unions must be neutralised; two, contractualisation (temping/casual labour) must become the legal norm rather than illegal supplement for regular work.
Both these are effectively a reality in today’s India. But our legislative framework militates against it, leaving the capitalist class vulnerable to being challenged by the working classes on legal grounds. It is in this context that the incident of July 18, 2012 at Maruti’s Manesar plant assumes historic significance, for India’s working class as well as for the investor class.
Since Independence, trade unions in India have mostly fought modest and pragmatic battles for outcomes such as higher wages and better working conditions. But this changed in the 1990s. Gurgaon-based labour activist Shyambir points out that after liberalisation, most strikes by workers have been not for wage hikes but for the right to form a union.
The right to collective bargaining is enshrined in our Constitution. Article 19(1)(c) grants all citizens the right to form a union. On top of it, we also have a Contract Labour (Regulation and Abolition) Act, 1970 that prohibits employment of contract workers for core industrial work. And yet, the Indian state has either stood by or actively colluded while employers tried every tactic, including illegal termination, to prevent union formation, and kept hiring temporary workers for regular jobs.
In the National Capital Region’s Okhla-Faridabad-Noida-Gurgaon-Manesar industrial belt, it is common to find workers toiling on 12- to 16-hour shifts for as little as Rs.9,000 a month, for years together. It raises a fundamental question: whose interests have the labour laws served all these years? Evidence suggests that it is not the labouring classes.
And yet, oddly enough, the clarion call for labour reforms is coming not from the working classes but from the corporate class. One reason for this could be that with global capitalism yet to recover from the shock delivered in 2008, the only way out of the crisis is to tighten the screws on labour to extract more value.
In such a scenario, who wants a labour class feeling empowered to fight for its entitlements? From this perspective, the Manesar conflagration was a decisive event that has, at least for now, beaten back labour and put capital firmly in control in an age-old conflict.
To quickly summarise the incident of July 18, 2012: an outbreak of rioting at the Manesar plant left one HR executive dead and 40 others injured. The police arrested 147 Maruti workers and slapped murder charges on all of them. The dominant narrative about this event is one of labour militancy gone wild, holding it responsible for the loss of life and property.
What has not attracted critical scrutiny is the final outcome of the larger conflict between labour and management of which this incident was the culmination: the termination, in one go, of 546 permanent workers and 1,800 temporary workers. Such a mass retrenchment would be unthinkable in the normal run of things. Were we to ask who gained the most from this sorry episode, the answer is definitely not the worker.
The provenance of this incident goes back more than a year, to June 2011. That’s when Maruti workers began agitating for their right to an independent union. After several months of struggle, the Maruti Suzuki Workers’ Union (MSWU) was formed in early 2012. Now, the MSWU in early 2012 was a different animal from the kind of unions Indian managements were used to dealing with. It derived its power from something unprecedented in the short history of labour struggles in post-liberalisation India: a strategic unity between permanent and temporary workers. It was too dangerous a threat, one that no management would brook.
According to Shyambir, “After its formation in March 2012, right up to the incident of July 18, the main agenda of MSWU was regularisation of temporary workers. They wanted pay parity for permanent and temporary workers. Their slogan of ‘Same Work, Same Pay’ made them hugely popular.”
Given that around 80 per cent of industrial workers in the Gurgaon-Manesar belt are hyper-exploited contract labour, this union may have made a big impact on labour mobilisations had it been allowed to flourish. With the purge of 2,300 workers that followed July 18, 2012, the threat was snuffed out.
The present scenario
By October 2012, within three months of the July clash, Maruti had set up a new system of “company temps” in place of the earlier system of hiring temporary workers through contractors. Under this regime, the temporary worker will work for six months. Then he is laid off for five months, after which he may be recalled for another six months.
Both corporate commentators and labour activists have termed this a master stroke. While the former see in this a replicable model to pre-empt labour unrest, the latter consider it a move designed to prevent unity between permanent and temporary workers by regularly churning the latter.
In September 2015, Maruti announced a salary hike of Rs.16,800, spread over three years, for permanent workers. When temporary workers agitated for a similar revision, unlike in early 2012, the permanent workers did not back them. If breaking the unity between permanent and temporary workers was the mission, it had been accomplished.
Maruti, for its part, has presented its system of “company temps” as a superior alternative. When contacted by The Hindu, a management source said that “the new system is superior to the contract system since it is a direct recruitment by the company. No contractor is involved, and company temps enjoy all benefits like canteen food, uniform, PF, ESI bonus, etc.”
Not surprisingly, there has been a persistent corporate chorus demanding a labour regime that allows companies to freely hire temporary workers even for core operations. And the Modi government is eager to deliver.
The labour reforms on the anvil essentially boil down to two things: make it impossible to form a truly independent trade union; make it legal to keep temporary workers permanently temporary, while paying them a subsistence wage.
With the central trade unions seemingly uninterested in putting up a fight on core labour issues, independent trade unions nipped in the bud, and contract labour effectively legal, the only potential challenge that labour now poses to capital is mobilisation based on unity between permanent and contract workers. This was the weapon Maruti workers had assembled at the Manesar factory in 2012. It’s the reason why they needed to be made an example of, so that India’s working classes won’t dare to attempt such experiments in the future.
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