The reform of labour institutions is always in the air as objective (variables) and subjective (orientation of agencies involved) factors keep changing. In the case of the industrial relations system and labour market (IRS-LM), variables such as product market, technology, trade and investment, and labour institutions such as trade unions, collective bargaining and strikes keep changing. There are two aspects of reforms — substantive issues and procedural aspects.
Social dialogue is an important procedural institutional process to debate and arrive at consensual conclusions which could be used for legal and other policy-oriented actions. In the post-reform period, the government uses social dialogue agency, viz., the Indian Labour Conference (ILC), to push the reforms agenda. Evidence-based reform arguments enrich social dialogue — something which has not happened thus far. Social partners have been advocating their “class-based opinions” unbacked by credible data or experience. The ILC has degenerated into a “talking shop”.
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Labour statistics, unlike economic and industrial data, are not rigorous. For example, the Annual Survey of Industries (ASI) and the National Sample Survey Office produce excellent statistics but have limited information relating to the IRS-LM. The Labour Bureau provides statistics on a range of industrial relations (strikes and trade unions) and labour statistics (contract labour, absenteeism, labour turnover, labour inspections). It mostly provides administrative data, viz., those generated as a part of implementing labour laws. The statistics on work stoppages are collected voluntarily. The composition and the scope of data published by the Labour Bureau has remained virtually the same over the decades.
Reform arguments
Let us look at three reform arguments put forth relentlessly by employers and neoliberal academics. Employers have criticised the labour inspection system as a case of “Inspector-Raj” and called for its reforms. This criticism stems probably from their “limited experience”. They have complained that State governments hardly sanction applications for retrenchment or the closure of establishments. They also demand a curb on the right to strike and prefer non-union workplaces. Some academics and global agencies such as the World Bank/International Monetary Fund which have “priors” similar to the reform opinions of employers have published studies “consistently” supporting the benevolent impact of reforms and refuting their obverse. For example, a study by Besley and Burgess (B&B) on the impact of labour regulation in 2004 has been widely used by employers and others to push hire and fire reforms, among others. This is despite glaring weaknesses in the studies using B&B methodology, original or revised. The government has fallen for these “strong prior-based evidence” hook, line and sinker and sought to introduce labour law reforms.
To counter the reform arguments mentioned above, trade unions should have collected the relevant information/statistics on inspection (such as the number of sanctioned and actually employed inspectors, the universe of inspection and actual inspection, the frequency of inspections) and studied them to make informed arguments to support labour inspection — even strengthening them. It is then that social partners and the government would have realised the poor quality of data on inspections. They would realise that labour inspectors are much fewer in number than the inspection universe. Research has shown that there is no all-India data on labour inspections.
Closure reform
Again, on firing/closure reform, trade unions have not collected data on the retrenchment/closure applications under Chapter V-B submitted to the labour department, permissions granted/refused by the labour department. These are not published in most States except in Maharashtra for a limited period. The denial of permissions was surely prevalent during the command economy, but is this prevalent in the post-reform period? My study on retrenchments/closures under Chapter V-B in 2001-05 showed that Maharashtra was more liberal in granting permissions for retrenchments/closures (Impact of Labour Regulations … in Maharashtra, Bookwell, 2008).
On strikes
The Industrial Relations Code, 2020 Code on Industrial Relations (CIR) has made legal strikes well-nigh impossible. Illegal strikes carry a heavy penalty. Trade unions could have used the data on strikes and lockouts published by the Labour Bureau which would show that lockouts are more frequent and account for more workdays lost than strikes during the post-reform period. This evidence would have challenged the need for introducing harsher clauses on strikes in the CIR.
Trade unions are well placed to “produce” statistics on several aspects of the IRS-LM at the establishment level. Employers’ organisations such as NASSCOM generate statistics on the IT industry which is used indiscriminately.
India has ratified the Labour Statistics Convention (No.160), 1985 and Labour Inspection Convention (081), 1947. India must generate statistics that are valid, comprehensive and reliable on IRS-LM. Trade unions must know by now that reforms are contested not only by street struggles but also primarily in the realm of ideas where objective data and rich empirical studies are used.
In essence, trade unions should produce labour statistics, do research on IRS-LM, build an active and productive interface with academics and use academic studies to make “evidence-based arguments” in the ILC. Imagine a massive strike demanding good labour statistics! The larger society and the government are bound to stand up and seek reform labour statistics. For once, strikes would enjoy public legitimacy.
This May Day, in 2024, trade unions must resolve to carry out these measures. If nothing, statistical agencies such as the Labour Bureau will be reformed as a result of these pursuits.
K.R. Shyam Sundar is Adjunct Professor, Management Development Institute, Gurga
