New Labour Codes – Government colludes with Corporates

This entry is part 1 of 1 in the series New labour codes and the 44 labour laws
  1. New Labour Codes – Government colludes with Corporates

I have written a recent article on how layoffs are happening in IT Industry and how government supports corporates in these layoff practices.

Already the government is helping corporates by introducing fixed term employment (FTE) which is making hire and fire legal. We termed this move from the government as ticking time bomb. Refer this article from our website on more details on fixed-term employment.

Fixed Term Employment

Fixed Term Employment – a time bomb for employment

In this way, corporates are allowed to recruit employees for a fixed time frame. For example, if they recruit an employee at the age of 30 for a 5 year contract, they can send the employee out without legal hurdles after 5 years. This way company can hire and fire as per their own norms. They can recruit more freshers after firing senior employees. Retirement age in private and some public sector companies will be decided based on corporate norms.

The next time bomb to blast the labor welfare is introduced by the central government. The bill which is at draft stage aims to replace 44 labor laws into 4 codes. There is more opposition to this bill inside parliament and also from various labor unions. Many labor unions protested for 2 days last month (January) against this proposed bill.

I am going to write a series of articles on what this bill is all about and how it is going to impact labor rights in our country.

Before going to discuss the 44 labor laws and new proposed codes, I want to explain the basic difference between law and code. Laws are formulated by the government by passing the bill in Lok Sabha and Rajya Sabha by elected members which is given final approval by the President of India. After a law is approved, violation of law is punishable as prescribed and any party violating the law will be punished. If a company violates labor laws, employee can seek remedy under law. Corporates will adhere to law as they are doing business in the country and violations can create both tangible and non-tangible issues in their business.

Even with that, we are still seeing many of the corporates make law rules fly in air by finding various loop holes in the legal system. Many corporates terminate employees illegally violating legal parameters with help of corporate power and money power. This is evident in various layoff news in MNC and Indian IT giants where they terminate several hundreds of employee without following any of the legally formulated retrenchment procedures.

Now the central government is converting labour laws into codes. Violation of a code will not be punishable as in the case of law. If violation does not attract punishment, imagine how corporates will behave. With their corporate power, they are violating law itself. If we talk about code, they will bury the rights of employees once for all. This is the prime reason why many labor unions are opposing this bill to the core.

This is only the introductory part and if we go in detail about what changes are proposed in these 4 codes which are replacement for 44 laws, we will understand how the Government and corporates are joining hands to bury worker rights in our country for corporate profit greed.

Before we go into this detail, we will touch base with the history of how these 44 labor laws were formulated. Trade Union Act was formulated in the year 1926 by British Government for the welfare of British corporate companies. Yes – you read that correct. Labor unions were allowed by British Government only to help corporates to improve their profit margin. We will see the reason.

After British colonial rulers started investing in India, many textile mills were started in many important cities of India in the late 19th Century. Workers faced sever hardships like long working hours, low pay, uncertain employment tenure etc. But they were not allowed to talk against British government or corporates as it is an offensive crime.

Hence, many informal unions were started in various factories. The credit for setting up the first trade union is given to Bombay Mill-Hands Association founded by Lokhanade in 1890. Following this, there are increasing number of trade unions started in various factories across the country. (The first registered trade union is Madras Labour union founded by Wadia and clearly Tamilnadu has historical credit in setting up the first trade union in India.)

When the industry kept growing and more unions were formed, many factories saw increase in number of strikes happening. These strikes were not planned and many workers started participating in strikes in a spontaneous and unorganized manner. There are various incidents happening between supervisors and workers. Workers take out their anger at their immediate supervisors. There are increased number of incidents where supervisors are attacked by fellow employees in the company. These unplanned strikes and attacks affected the production badly and as result the profit margins of many companies declined.

Communism slowly spread the wings in these unions and workers were educated about the nature of hardships and how to confront them successfully. Many workers started getting involved in these unions. British Government arrested many of the labor leaders but this poured oil into the working class movement. More than 1000 strikes were recorded between 1920 – 1924 period. This became a big head ache for the corporate companies and business is affected very badly

To resolve this issue, British Government formulated Trade Union Act 1926. This act allows labor unions to be formed legally and made provisions to register them. This acts allow workers to join unions freely and resolve their grievances with help of unions.  This act helped in establishing increased number of unions in various companies across the country. The number of unions grew rapidly to 2750 registered unions at the time of British leaving India (1947) with around 16.6 lakh employees associating with various labor unions.

Following the trade union act various laws were formulated. There are 44 laws after various rounds of discussion with unions and corporates. These 44 laws are formulated by central government and after Independence various states has more laws specific to their states.

The major benefit it created after establishment of this Trade union act is it has reduced number of unplanned strikes. The number of strikes in various establishments reduced drastically. The affected employees get their remedy with help of unions and this helped in improvement of productivity. Another important development is number of attacks on supervisors reduced after the rise of unions.

In IT sector, many employees even now believe that trade union is a bad word. I have seen people who are very hesitant to take my book on IT life Fun or problems inside office premises. But in history, trade unions yielded good results not only for employees but for many corporates as well. It helped in increasing production and at the same time, it resolved conflicts between employees and employer. Employees also gain confidence with unions and they started approaching unions for any of their grievances. Unions act as a bridge between corporates and employees in the present context. The long term task of trade union movement is to replace the wage labour system with a system where the workers themselves manage the companies.

Image result for bharat bandh 2019Now Central Government has taken steps to dilute these 44 laws. This dilution includes reducing interference of unions in companies. If a law is removed and code is setup, it will be difficult to get legal remedies in various issues.

We have published an article in our website where layoff victim in different companies attacked their HR officers after they lost their jobs. In Delhi, software professional shot his manager after he lost his job following him in the car and in Chennai layoff victim attacked HR manager with sickle.

There is another incident where we reported that layoff Victim named David after he lost his job in Bangalore Wipro try to rob KVB bank using a toy gun within 3 months of being laid off.

We also published various news on layoff affected employees committing suicide after they lost their job. Around 8000 IT employees committed suicide as per recent survey and primary reason for these incidents is job loss. We ourselves talked with many affected employees and observe many employees are in personal vengeance with their supervisor and HR officers. I personally counselled some of the employees who has personal vengeance with their managers and HR officers.

History teaches us its lesson repeatedly. If we see the history of 1926 labor union act, we understand the importance of labor unions. The increasing number of incidents like David and Ganta Chaitanya in IT industry reminds us the effect it is going to create if unions do not exist. So the Government’s decision of diluting labor laws may act as boomerang on corporates as well. This dilution is a sharp knife and the effect it is going to cause will not only affect employees but also corporates drastically.

History is a good teacher and I believe corporates should learn from past history and support unions and oppose this dilution. If it happens, it may create temporary benefits but in long run, it will make the situation worse.

In the coming parts, we will see details on these 44 laws and this new replacement 4 codes.

– Shyam Sundar

President, NDLF IT Employees Wing

Permanent link to this article: http://new-democrats.com/new-labour-code-govt-corporate-collude/

6 comments

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    • Kasirajan on February 17, 2019 at 6:16 pm
    • Reply

    United we stand —
    Divided we fall.. Then layoffs will become common pratice.

    People in low income background Autostands teaches the reality of Laws and its real implementation irrespective of government Pressure .
    But When IT employees stay united ?

    • Suge on February 17, 2019 at 9:34 pm
    • Reply

    //History teaches us its lesson repeatedly. If we see the history of 1926 labor union act, we understand the importance of labor unions. The increasing number of incidents like David and Ganta Chaitanya in IT industry reminds us the effect it is going to create if unions do not exist. So the Government’s decision of diluting labor laws may act as boomerang on corporates as well. This dilution is a sharp knife and the effect it is going to cause will not only affect employees but also corporates drastically.//

    correctly said because if union not exist there will be many conflict between employees and employers raise that will affect their production.

  1. My question is

    Why our prime minister not talking about layoff and retrenchment?

    Our prime minister doesn’t bother about layoff and retrenchment,illegal termination in IT companies

    “Blaming the IT companies is useless
    My questions if our government is good means why this will happen?
    All layoff and retrenchment ,illegal termination with the help of our prime minister government support only they are doing openly that why employees not getting any justice?

    Layoff and retrenchment,illegal termination,forced resignation,its all corporate dharma? It can’t stop it will happen silently

      • Shyam sundar on February 18, 2019 at 7:46 am
      • Reply

      Please read my previous article about a minor, panchayath and affected girl. Govt is doing panchayat role

    • Praveen on February 20, 2019 at 12:09 pm
    • Reply

    #In this way, corporates are allowed to recruit employees for a fixed time frame. For example, if they recruit an employee at the age of 30 for a 5 year contract, they can send the employee out without legal hurdles after 5 years.#

    5 ஆண்டு ஒப்பந்தம் முடியும் முன்னரே கூட அனுப்பலாம். அதற்கும் எந்தத் தடையும் இல்லை என்று நினைக்கிறேன்.

    • Praveen on February 20, 2019 at 12:09 pm
    • Reply

    #In this way, corporates are allowed to recruit employees for a fixed time frame. For example, if they recruit an employee at the age of 30 for a 5 year contract, they can send the employee out without legal hurdles after 5 years.#

    5 ஆண்டு ஒப்பந்தம் முடியும் முன்னரே கூட அனுப்பலாம். அதற்கும் எந்தத் தடையும் இல்லை என்று நினைக்கிறேன்.

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