Labour

Crushing Labour Laws Amidst Successive Industrial Accidents Is Serious Insult to Injury

State governments have undertaken a slew of labour law reforms that could lead to higher exposure to occupational health and safety risks and no appropriate protection for workers.

Industrial accidents are far too common in India.

Two disastrous incidences of gas leakage at Visakhapatnam’s LG Polymers plant and a boiler blast at NCL India Limited’s thermal power station in Tamil Nadu evoked memories of several unfortunate industrial accidents that have taken hundreds of workers lives.

In last year, few reported industrial incidents such an explosion in a chemical factory in Maharashtra, a massive fire at the ONGC plant at Bombay High, a blast in NTPC’s Rae Bareli plant and Bawana industrial area in Delhi, attest to the fact that India’s industrial preventive measures and the safety inspection systems are inadequate and ineffective in ensuring the workers’ safety.

Even if it is just the industrial accidental tragedy with the significant toll that makes the headlines, its actual impact for making comprehensive occupational health and safety legislation seems to be a far-off prospect. In the time of a health crisis, the government adopted stringent measures not only to restrict the movement of people but also enforced a total shutdown of industrial factories – except those units producing essential commodities – and other working establishments to ensure physical distancing.

With this policy, India may be able to contain the virus; however, it could be a staggering task for the state to avert potential industrial accidents due to 42 days of a complete shutdown of factories and their operations that use synthetic inflammable substances and hazardous chemicals. For ensuring smooth production, the manufacturing units need to undertake routine maintenance tasks and those must be inspected by the Directorate General Factory Advice Service periodically.

However, owing to the higher overhead repairing costs, it is observed that Indian employers pay more attention to corrective maintenance (i.e. replacement of machinery when the complete breakdown occurs) relative to preventive maintenance where scheduled maintenance of machines and equipment is undertaken at regular intervals to avoid breakdowns.

Also read: Longer Working Hours, Employee Productivity and the COVID-19 Economic Slump

So in order to minimise the recurring costs, employers are engaging in risky behaviour by allowing workers to work in hazardous conditions. Therefore, on one hand, employers are reluctant to incur preventive maintenance costs to avoid additional overhead. On the other, the Indian labour administration is under tremendous pressure from the government’s pro-employer policies that are offering leeway to employers from regulatory controls.

In this case, neither the employers nor employees would be better off, as it will promote unhealthy competition among Indian firms and would eventually thrust out around 19.5 million of Micro, Small and Medium Enterprises from the product market.

Labyrinth of India’s labour legislations 

The principle legislation of the Factories Act of 1948 ( the Act) governs the working conditions and safety measures for registered factory workers. Despite its vast volume, the existing legislation is applicable only to factories that employ ten or more workers; it covers only a small proportion of workers.

According to the Sixth Economic Census, 97.39 million (45%) work in establishments without any hired worker; whereas, 118 million (55%) of workers works in establishments with at least one hired worker. Broadly, the former category falls under the Shops and Establishment Act and later with the Factories Act.

Across the employment threshold sizes, 172 millions of workers (79.85%) works in the establishments that have less than nine workers and 20.1 million are employed in establishments which have more than 10 and less than 49 workers. Only 17.60 million (8%) work in establishments with more than 100 workers.

A migrant worker rides a cart with his family on a highway as they return to their villages, during a 21-day nationwide lockdown to limit the spreading of coronavirus disease (COVID-19), in Ghaziabad, on the outskirts of New Delhi, March 27, 2020. Photo: Reuters/Adnan Abidi/Files

As per the annual report of Directorate General Factory Advice Service, there are 31,602 factory units are registered under the hazardous industry category employing 1.97 million workers in 2013, which increased to 32,956 units employing 2.32 million in 2014 u/s 2(CB) of Factories Act, 1948. Due to its constricting legislative approach, 169.3 millions of workers who legally may not be working in the scheduled hazardous industries but are engaged in the hazardous process are absolutely excluded from the purview of occupational safety and health laws due to the employee threshold criteria of the Act.

Also read: Adityanath Govt in UP to Suspend Key Labour Laws, Workers’ Rights for Three Years

Industrial accidents and prevalence of fatality risk

The prevalence of industrial accidental deaths is notably high in the manufacturing industries. It will have a multiplier effect in exacerbating the risk when it is accompanied by the prolonged dysfunctional manufacturing processes and inadequate staff during the lockdown period.

Data from the Ministry of Labour and Employment also reveals that 3,562 workers lost their lives and around 51,124 were injured in factory accidents between 2014-16. These figures may have increased; however, the official statistics are yet to be updated for the last two years. According to the official figures of labour bureau the fatal accidental incidental rate per 1,000 workers was 0.53% (fatal) in 2013 which increased to 0.63% in 2014 for the factories registered under the Factories Act of 1948.

Similarly, the frequency rate for fatal accidents per lakh worker was 0.30% (in 2013) that increased to 0.43% point in 2014. Despite the increasing manufacturing and mining activities, regulatory authorities ensuring occupational safety have been limited to 1,400 safety officers, 1,154 factory inspectors, and 27 medical inspectors for the central sphere across all states. Therefore, the health hazard and fatality risk of working in Indian factories have increased tremendously and it could likely to continue unless a routine inspection and mandatory safety clearance are enforced effectively.

Turing a blind eyes

An uncertainly of livelihood, wage loss and layoffs would likely to linger much longer and will be persisted in the post-lockdown period. In these difficult times, many state governments have undertaken a slew of labour law reforms that potentially lead to higher exposure to occupational health and safety risks, no appropriate protection, and an increased likelihood that they will suffer from illness, accident or death.

For instance, Rajasthan, Gujarat, Punjab, Himachal Pradesh, Maharashtra, and Uttar Pradesh have amended the Factories Act that allows firms to extend a factory worker’s daily shift to 12 hours per day, from the existing eight hours per day to revive the economy. Excessive working hours have negative effects on workers’ health which leads to poor immunity and exposes them to a higher risk of industrial accidents.

Also read: Labour Law Reform: Was a Sledgehammer Needed When Employment Itself Is Uncertain?

Uttar Pradesh and Madhya Pradesh took a frog’s leap to exempts all from labour legislation for the next three years as a measure to revive the economy. This reform may further give reason to employers to circumvent essential labour laws but will cause them severe productivity losses. In a bid to accelerate the economic recovery, the state is externalising the cost of reform onto workers by waning out its own enforcement mechanism.

India’s efforts in encouraging occupational and industrial safety remain frail. The proposed Code in the de jure spirit obliges employers to provide for a risk-free workplace and instruct employees on safety protocol. It further assumes that all employers will self-enforce these Codes without any deterrence from enforcement authorities.

Existing evidence shows that if we allow self-enforcement of labour laws though nudging the behaviour of employers, then employers would likely engage in an opportunistic rent-seeking behaviour to maximize their own self-interests of profit. Hence, the behavioural altruism on the part of employers offers less credence in safeguarding the rights of workers.

Second, the labour inspectorate is entrusted with the power to inquire into accidents and conduct inspections and to frame penalties – both civil and criminal – on employers in case of non-adherence. However, in the proposed Code, the statutory powers of labour administration have been curtailed severely. It will be considered as inspector-cum-facilitators who initiate the legal proceedings but will not able to frame criminal penalties on employers.

Instead of protecting the workers, it is now redefined to protect the interest of employers. The code also restricts the appeal of a person aggrieved due to industrial accidents or industries or any employment-related causes thereof is to file a writ petition before the relevant high court. This may lead to the denial of access to justice to challenge issues before a lower court. As a result, there will be longer pendency of labour disputes and delayed justice to the aggrieved workers.

India’s jump from 130th (2016) to 63rd (2019) rank in the Ease of Doing Business (EDB) is boasted across all industries. Every year, whenever India tops the higher rank on EDB, our global ranking point estimate slips towards the bottom quartile in all global parameters such as hunger, peace, slavery, worst formed labour and workers’ rights indexes on the lowest scale.

To soothe the Centre, all states government are now engaged in a race to bottom to reform existing labour market institutions to encourage ease of doing business and to promote flexibility. Hence, the two unfortunate disastrous incidents that recently took place have propelled us to reimagine the future of Indian workers and industrial relation systems in the neoliberal order and the pandemic.

Rahul Suresh Sapkal is an assistant professor at the Centre for Labour Studies, School of Management and Labour Studies at the Tata Institute of Social Sciences, Mumbai.