The Life of Labour: Three-Quarters of The Indian Workforce Will Be In ‘Vulnerable Employment’ By 2019

Latest news updates from the world of work.

Reports expose the dismal working conditions in India

Over the last couple of weeks, two reports have indicated the worsening conditions of work in India. The widely talked about Oxfam report indicates the falling value of wage labour against the accumulation of wealth as dividends and share capital. Another report from the ILO hints towards the dismal conditions in which Indian workers are forced to work and eke a living.

Three-quarters of Indian workforce in ‘vulnerable employment’

A recent report from the ILO estimates that over 77% of the active workforce (not counting the unemployed) will be in vulnerable employment by 2019. The ILO report—titled ‘World Employment and Social Outlook: Trends 2018’ defines ‘vulnerable employment’ narrowly as the sum of own-account workers [self-employed without paid employees, usually a one-person enterprise] and contributing family workers. But most labour experts and economists in India define ‘vulnerable employment’ as encompassing contractual workers in the organised sector as well as workers in the unorganised sector. While the broader definition will draw in a greater proportion of workers into the ambit of vulnerable employment, the trend captured in the ILO report is only further substantiated from other sources including the Annual Survey of Industries data series that captures a net decline in manufacturing jobs across the entire spectrum. The annual labour bureau statistics also confirm this by recording a drop in the number of jobs from 480 million in 2014 to 467 million in 2016. Acknowledging that the trend is global, the ILO report also says that the gains made up to 2012 have been reversed.

Conditions of modern slavery in India’s garment sector

A report titled ‘Labour without Liberty – Female Migrant Workers in Bangalore’s Garment Industry’, released by the Garment Labour Union in alliance with the Clean Clothes Campaign, chronicles the grave conditions in which the workers, producing high value branded garments, are forced to work in Bangalore. The report concludes that five out of 11 indicators of ‘Forced Labour’ exists in the garment sector in Bangalore. It also reports that women are lured by false promises of wages and held under pressure to work for low wages.

Central Government pushes for contractualisation of labour

The centre has published a draft notification to allow amendments to the Industrial Disputes Act and Model Standing Order rules to enable ‘fixed-term employment’ by industries. This was a major reform that was being pushed by the corporate sector to formalise the contract labour system. While the central government had extended a similar option a year ago for the leather and apparel industry, Niti Ayog and other lobbying groups had sought the extension of this provision across sectors. The draft notification put up for comments from stakeholders will enable state governments to amend the labour rules to incorporate and legalise ‘fixed-term employment’ allowing companies to shift the risk of the business cycle on the workers. The draft notification also allows State governments to amend the Industrial Dispute Act allowing companies with less than 300 workers to close down or retrench workers without prior notice and approval. Presently in most states, the limit is set at below 100 workers.

Indian tax system incentivises capital intensive rather than labour intensive production

An article in Livemint examines the structure of India’s corporate taxation regime inferring that the complex tax regime with multiple exemptions leads to a skewed burden of taxes. It identifies that apart from allowing larger companies to pay a much lower rate of tax than smaller companies, exemptions for accelerated depreciation incentivises capital-intensive production rather than the use of labour. The effective tax rate for companies with turnover less than Rs. 1 crore is above 30% while companies that make over Rs. 500 crores pay less than 26% in taxes.

UKIBC push for lowering corporate tax and further labour law reforms

In a related development, the United Kingdom – India Business Council (UKIBC) and the Confederation of British Industry have together written to the Indian government seeking a lowering of corporate taxes and implementing reforms to further dilute labour laws. As part of the wish list from the Indian budget, the lobby groups have argued that such measures would improve the ease of doing business in India and also help increase British investments in India.

Bawana fire: Charges, allegations and arrests

Mohan Jain, the owner of the factory, was arrested on January 21 and remanded to a five-day police custody. Investigators have also identified Lalit Goyal as a possible suspect in the case. His application for anticipatory bail has been rejected by the court. During the hearing, an advocate for one of the victims alleged that workers had named him as a partner in the establishment.

Hindustan Times has reported that the building was licenced as a plastic factory and the owner had converted it to a firecracker packaging and storage facility without approvals or adequate safety systems. ‘The fate of the victims was sealed 21 days ago when businessman Manoj Jain started stocking firecrackers in the rented building that had no fire evacuation plan, only two fire extinguishers, and a lone exit that was allegedly locked when the blaze broke out’, stated HT. Of the ten women who perished in the fire, there was also a pregnant woman who was charred to death. The workers had been working in abysmal conditions for meagre wages ranging from Rs. 6000/- to Rs. 10000/-. The Quint has published a report on the exploitation suffered by these workers. Jahnavi Sen, writing in The Wire, argues that the reasons for the death go beyond violations of norms but is more systemic. She also argues that women suffer disproportionately as they are exposed to informal work. Quoting Farida, a labour activist in Bawana, she points out that this particular factory is merely one of the many in a region where labour laws are brazenly violated.

Other news

Central trade unions stage protest across Tamil Nadu demanding a rollback of anti-labour policies

Central trade unions along with regional unions such as Labour Progressive Front (LPF) staged demonstrations and road rokko on January 25 in various cities of Tamil Nadu voicing their dissent against the central and state government’s economic policies. Previously planned along with all India protests on January 17, it was postponed in lieu of the festival season. While the demands were based on the national charter of 12 demands submitted by central trade unions that included a raise in minimum wage to a living wage, end to contractualisation and ‘anti-labour’ policies, the protests focussed on price rise, hike in transport fares in Tamil Nadu and the dismantling of the Public Distribution System which has been the hallmark of the welfare system in Tamil Nadu. A large number of workers were arrested in Chennai, Madurai and other cities.

Contract workers’ union in cement plant sign wage agreement with contractor

Chanda Cement Works Employees Union signed a wage agreement with a private contractor supplying manpower to the ACC plant in Chandrapur, Maharashtra. The plant owned by Lafarge Holcim, has 223 permanent and 1100 contract workers. As per the tripartite agreement valid for three years, the contractor of ACC Ltd agreed to pay enhanced wages for the contract workers with effect from April 1, 2017. It was also agreed that arrears due to an enhancement of wages will be paid before January 26, 2018. In case of termination of the contractor during the period of the agreement, the management of ACC Ltd agreed to implement provisions of this settlement in respect of the incoming contractor. The union is affiliated to the cement workers’ union federation in India as well as to Industriall.

Sri Lankan law against banned fishing causes panic among Tamil Nadu fishing communities

A new bill unanimously passed by the Sri Lankan parliament against illegal fishing in their waters has caused panic in Tamil Nadu which shares most of its coastline with Sri Lanka. The new law imposes a fine of over Rs. 50 lakhs on fishermen caught in Sri Lankan waters indulging in banned fishing activities such as trawling. It allows for the sale of confiscated boats if the fine is not paid within a month. The proximity of the Sri Lankan west coast to Tamil Nadu, the vagueness of territorial waters and contested traditional rights over fishing these waters have led to conflicts between fishermen from Tamil Nadu and the Sri Lankan navy. Fishermen from Tamil Nadu have been arrested or even killed by the Sri Lankan navy for fishing in its territorial waters. The present law has caused great panic and anger among the Tamil fishing community. Political parties in Tamil Nadu have also spoken against this law with the Chief Minister of Tamil Nadu writing to the union government regarding this issue. At present, 133 fishermen and 185 trawl boats are in the custody of the Sri Lankan government.

Seminar on grievance redressal for garment workers

Penn Thozhilalar Sangam (PTS) organized a seminar titled “Grievance Redressal Mechanisms: Access, Barriers and Challenges facing Garment Factory Workers in Greater Chennai” on January 20. The seminar is part of a PTS project sponsored by the International Labour Organization (ILO) to document grievances among garment workers and establish/improve redressal mechanisms. One of the goals of the meeting was to form a Legal Support Group for garment workers. The main issues facing garment workers include denial of minimum wage via deductions, illegal terminations, and intense harassment of workers who have engaged in protests or join a union. These struggles have become embroiled in drawn-out court cases necessitating such a legal support group to help garment workers face the legal battles.


Iranian union leader sent back to prison after short furlough

Denied the extension of his furlough despite his poor health resulting from harsh detention conditions, Tehran teacher union leader Esmail Abdi was taken back to the Evin prison. Esmail Abdi had been released on furlough on January 9, a temporary reprieve from his six-year sentence which started in 2016. While welcoming this release, Education International (EI) was aware that Abdi could be rearrested any moment, as it already happened last year. This time it lasted a mere 11 days. There is an ongoing international campaign to waive his punishment and seek his early release.

International trade union solidarity pours for former President Lula of Brazil

The International Trade Union Confederation (ITUC) has issued a global call for solidarity with former Brazilian president Luiz Inácio Lula da Silva. On January 24, a regional appeals court held Lula guilty of corruption. The charges and the prosecution is seen as a politically motivated strategy to deny him a right to contest the upcoming presidential election. In its statement, ITUC said, Trust in the rule of law in Brazil suffered a severe blow on Wednesday as an appeal court failed to provide former President Luis Inacio Lula da Silva with a fair trial. The court ignored all evidence of Lula´s innocence and proceeded to uphold a sentence handed by a lower court, increasing it to more than 12 years.”

Unions in US and Mexico jointly petition NAFTA court against labour Reforms in Mexico

The AFL-CIO told Reuters that it and Mexico’s UNT were filing the complaint with the U.S. office that oversees the labour accord attached to the North American Free Trade Agreement as U.S., Canadian, and Mexican negotiators met in Montreal to try to modernise the 1994 trade pact. The complaint argues that Mexico’s proposed labour law amendments to implement constitutional reforms will violate the North American Agreement on Labor Cooperation. It seeks efforts from the United States to prevent the measures from being implemented and to demand changes to bring Mexico into compliance.

A debate for the weekend:

Is the Indian economy creating tens of lakhs of jobs?

Belying the opinion that India is creating far fewer jobs (or even bleeding jobs), a new report, published by a professor of economics at IIM Bangalore and Chief Economic Advisor of SBI, has concluded that we are headed towards creating 7 million (70 lakh) jobs by the end of the financial year 2017-18. This has led to a furious debate over the issue of job creation in India in the last few years. The report arrives at its estimates using data from EPFO and ESIC enrolment. Its central argument though is the need to improve jobs data reporting by moving towards payroll reporting. The report has come for significant criticisms. A LiveMint article discusses the biases that could have crept into the data. It argues that the threshold of 20 employees for EPFO registration might lead to a false growth when a company that has 19 workers increases its payroll by 1. While the net increase is just 1, EPFO will record a growth of 20. It also does not delete accounts immediately when jobs are lost. Finally, an amnesty scheme announced two years back has brought in many workers into the ambit. This cannot be claimed as new employment. Thus, EPFO is not the best source to estimate net growth in jobs. Jairam Ramesh, a minister under the UPA regime, questioned the report for basing its estimations on EPFO data without fully accounting for the discrepancies arising from this. Calling the report ‘misleading’, he maintained that given EPFO does not remove accounts when jobs are lost, and it only accounts for jobs created by the formal sector, the data was unreliable as a measure of job creation. He also argued that at a time when the economy has been jolted by shocks such as Demonetisation and GST implementation that have adversely affected the unorganised sector, it cannot be ‘wished away’ by cherry-picking data. Livemint has also published another article, that supports the claims by the authors of the report maintaining that the full report reveals the precautions taken by the authors and given these controls, it is only likely that they have underestimated the job growth. It has also maintained that payroll data from 900 listed companies for the past three years show a steady growth of 3.5% to 4%. It adds a caveat to this data, recognising that it only accounts for jobs created in listed companies that form a very small slice of the workforce. The report can be accessed at the IIM Bangalore website.