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A device of last resort

External Affairs Minister Pranab Mukherjee, who also holds charge of Finance, has advised Indian industry to protect jobs, even if it meant “reduction in compensation at various levels.” His suggestion came even as Labour Minister Oscar Fernandes told Parliament that five lakh jobs have been lost in the country during October-December 2008. What is more, the Commerce Ministry has warned that 15 lakh jobs could be lost over the next six months in the export sect or alone. These are official figures based on sample studies or surveys of specific sectors. But unofficially, hundreds and thousands of employees may be either “benched” or eased out every week, as a consequence of the global meltdown and the slowdown in Indian economy. The export and manufacturing sectors may be the worst-hit in the early stages, but trade and industry warn that the problem could spread to other areas very soon. It is in that context that Mr. Mukherjee’s suggestion must be viewed. Some of the more responsible institutions have already either consulted or begun the process of consultation with their staff associations and trade unions on how to manage the current crisis by coming up with the suggestions to protect jobs, even if it entailed a temporary cut or freeze on wages.

The Centre, through the Employees State Insurance Corporation, has already initiated a scheme to provide relief to employees thrown out of their jobs. It plans to extend this six-month assistance to a full year. Obviously, not everyone will be covered under such a social security net. The State governments and the district administration should set up local committees to address these problems with a humane approach. Some industries have already resorted to a reduced number of working days, cut back on shifts, adjustment of salaries for days not worked against future wages, or a phased reduction in wages for non-working days. Staff associations and trade unions should be consulted on this issue of great all-round concern to come up with industry-specific solutions. It needs to be stressed that saving jobs at current pay levels should be the first priority and a temporary salary cut that may help protect jobs is only the second best option. But in case some jobs are still lost, the employees must be provided with appropriate compensation packages even if the company does not fall within the ambit of various labour laws. Those who are thrown out of jobs must be given priority when the economy turns round and fresh recruitment gathers pace.

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