Reform’s labour lost

The government has sought to achieve this object by proposing an amendment to Chapter VB of the Industrial Disputes Act which mandates that no establishment employing at least 100 workers can restructure without taking the government’s permission. This has effectively meant that few establishments with 100 workers or more could think of firing any employee as the government’s permission would hardly ever come. The reform that is being proposed by the government is to enhance the limit from 100 to 300 workers so that many more middle size businesses can retrench or close down as a consequence of competition without depending on the mercy of the government.

Much to its credit, the government has sought to make this reform palatable to workers by simultaneously proposing that the affected workers would have to be compensated with a golden handshake. That is, to increase the level of compensation from the existing 15 days of wages for each year of service to 60 days of wages for each of service. Thus, the government has been able to come up with a social security net for workers so that they cease to be a hindrance to the imperative of making India competitive in the global market.

To be sure, Labour Minister K Chandrasekhar Rao has been going through the motions of holding separate consultations with trade union leaders and employers to sell his labour reform package. But there has been little tangible progress as Rao is still nowhere near introducing the necessary amendment Bills in Parliament.

The irony is, the government has been unable to sell the labour reform idea to the Left even though it is within the parameters of that much-touted compact between the two, Common Minimum Programme (CMP). Consider what exactly the CMP said about labour reforms: ‘‘The UPA rejects the idea of automatic hire and fire. It recognises that some changes in labour laws may be required but such changes must fully protect the interests of workers and families and must take place after full consultation of trade unions.’’

Since the proposed reform enhances compensation by four times, the government is expected to be in a position to assert that its exit policy complies with the CMP’s stipulation of protecting the interests of workers and their families. Unfortunately, there is a catch in the CMP: ‘‘However, labour laws other than the Industrial Disputes Act that create an Inspector Raj will be re-examined and procedures harmonised and streamlined.’’

Given the manner in which they forced the government to shelve or abandon its disinvestment plan in BHEL, the Left are capable of interpreting the CMP to mean something altogether perverse. That the Industrial Disputes Act retains the license to perpetuate an Inspector Raj.

The Left have after all been even more disingenuous in blocking the BHEL disinvestment on the strength of this line in the CMP: ‘‘The UPA will retain existing navaratna companies in the public sector while these companies raise resources from the capital market.’’ A reasonable interpretation of this would be that the CMP allows disinvestment in navaratna companies so long as the majority stake remains with the government. But the Left have read it down to mean a total embargo on disinvestment in navaratna companies. They will find it even easier to oppose labour reforms since the CMP actually singles out the Industrial Disputes Act as an exception to the corpus of laws that can be re-examined.