Industrial Workers & Regulations
By: Amit Bhushan Date: 20th Jan. 2018
The tussle amongst employers to look for what is called ‘un-strangulation’ from onerous Labour related regulations is often blamed for lack of creation of jobs in India. It seems to be also a cause of some of the businesses preference for remaining in the un-organized sector and which is cited as not being good for any of the interest groups whether the businesses or employees or society at large. This is because it then become more exploitative on employees, leakages in the taxation system and other compliances say for environment, safety etc. besides lack of absorption of productivity technologies which then also pushes the business downhill in the longer run. The debate on it in the commercial news media is bi-polar i.e. either it calls for scraping the Labour regulations en-masse giving huge relaxation to businesses or for the continuance of the tight regulations for the sake of benefits of employees and this is mostly for protection of individual workers’ rights. The debates then becomes highly political one where carrying out reforms becomes a challenge.
The result is what can be called a phenomenon of Ghosts workers. Now please note that the term is being used for people who work in these unorganized business units, but for the sake of convenience, there are no record created by such units regards existence of such ‘workers’ with them. This definition might be different from the more common definition where workers exist only on paper. A ‘Cash’ economy thrives as a result wherein these Ghosts workers (as defined in the article) are paid in ‘cash’, from the ‘cash accruals’ of the business units, which frequently fail to record ‘cash income’ mostly by design. The workers who receive these paltry salaries in ‘cash’ again do not have access to bank services and are happy to keep circulating the cash. A happy ‘cash cycle’ is thus created, where ‘dealing in cash’ away from regulations and taxes, then thrives. Even with GST with is onerous compliance requirements on the businesses, have not been able to make much of a dent on this ‘Cash cycle’. And the political support for ‘worker’s rights’ isn’t even cited as one of the possible reasons for the same. The commercial news media with its either-or debate on the political choices available with the people muddles the debate further. The political choices with people may be regards Netas they select, which can be from a given pool of Netas offering themselves for elections, however with regards to a situation and solution, there can be many choices which needs to be discussed so that the Netas can choose for the choices that they stand for to woo their voter base.
For example, for the given issues related to balancing of interests between the workers, business owners and the government regulations, we know of the two political choices. The first is to have a healthy workers protection regulations and current laws may be on these lines. The second choice is to relax these regulations which may dilute workers’ interest, but help businesses cope up with rules more easily and thus it may prompt them to create more jobs, possibly. The debate around these lines politicizes the issues further, rather than look for options and solutions. In fact such structure of the debates even fails to look at problem in a wholesome manner since it looks at only the business’s issues or the worker’s issue and ignores the society issues and the perspectives from the point of government and governance. If we look at the problem from the society angle, it may be argued that there does seem to be a need for a bigger organized sector with adequate encouragement for the smaller businesses to become more organized including greater compliances with the regulations like environment and possible reduction in the ‘black/cash economy’ by converting the same into ‘white/cash-less’. We also need the workers to become more productive for sure and better absorption to newer technologies.
In the light of these needs, if we relax conditions for hiring of part-time workers, say those which work for six or lesser hours a day, then possibly this may help. The businesses would be encouraged to go for more part-time workers and put them to work with the latest technologies while making a push to move into organized segments. The existing worker’s interests would be protected and the worker’s unions could monitor exploitation including those working part-time especially for the bigger units. Most of it would impact ‘cash’ payments to workers and the ‘black/cash economy’. There could be an improved bankability of such part-time workers who have serviced an organization for long. And off-course the yearning of the part-time workers to move to higher protection full-time working would ensure that there is a constant stream of ‘negotiation’ between classes based upon merit, rather than just about the regulation as it exists today. This would mean a continued existence of the ‘class’ of full-time workers and this could be used by businesses to attract more skilled labour or to retain more productive employees. The potential employment ‘feeling’ hindered on account of regulation if any, would ensure systems and processes to work with shorter production shifts and would be supported on account of relaxed regulations. More importantly, the argument that the ‘worker’s right regulations’ are an hindrance to employment creation would be tested as a result, rather than a lock-stock and barrel approach to dismantle such regulations which in any case is a political touchy subject. Let’s see the ‘Game’ evolve…