An Evasive Quest for Labour Reforms

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India, with the world’s second-largest labour population and a youthful demographic profile to boot, is blessed with a wealth of human resources that it can use to its advantage. One of its most enduring, if pitiless, contradictions is that it has a dreadful track record of underutilizing and mistreating its personnel. To date, all attempts to correct this abnormality have yielded mixed results.

In September 2020, the Parliament enacted three labour code bills in what appeared to be a sensible, pro-working-class initiative. These bills – the Industrial Relations Bill, the Code on Social Security Bill, and the Occupational Safety, Health, and Working Conditions Bill, as well as the Code on Wages Bill passed in 2019 – are supposed to provide workers with comprehensive legal protection while giving employers the flexibility they need to conduct business in an uncertain and volatile environment.

These proposals, some claim, will enhance transparency, ease of compliance, fair working conditions, and better employer-employee relations by consolidating 29 distinct, often complicated labour rules.

Proponents of economic reform and globalization have long claimed that labour rules are a significant, almost insurmountable barrier to growth. They bemoaned the rigidity of labour rules, their inconsistencies, and the onerous burden they placed on employers. In certain closed circles, the vehemence with which this argument was made elevated labour law change to the level of more vital concerns like attracting foreign investment, acquiring access to advanced technology, and wooing multinational firms.

Even if one accepts that such requests are well-intentioned, one cannot help but wonder if ‘reforming’ labour laws, especially in the manner in which they have been done, is a step in the right direction. Some could claim that it is, but incorrectly. This is based on the assumption that simpler regulations encourage voluntary compliance, which will benefit employees in the long run. This viewpoint is based on two fallacies. For starters, proponents are adamant that the new measures will effectively promote labour rights. Second, their perceptions of labour issues are shaped by concerns about efficiency, optimization, and profits at the expense of all else.

Since the central government proclaimed its desire to modify labour laws, well-intentioned labour specialists, trade unionists, academics, and legislators have offered realistic measures for improving working-class conditions while also accommodating corporate interests. When the draught bills were being discussed by the Parliamentary Standing Committee, they weighed in. The final version of the labour code bills, however, is replete with flaws, defeating their entire aim. Their anomalies have been thoroughly examined by labour specialists and policy wonks.

FOIBLES OF THE LABOUR CODE BILLS

In general, the four labour bills provide workers with symbolic benefits while giving businesses significant influence. To miss the blatant imprint of the neoliberal agenda scribbled all over the legislation, one must be intentionally obtuse. Scholarly assessments of the proposals have shown a number of critical flaws that thwart their principal goal. For example, the Industrial Relations Code Bill (IRC) allows employers to liquidate businesses and retrench employees without having to pay any compensation. It gives governments at all levels a lot of leeway in implementing the new legislation. The government can exclude any establishment or type of establishments from the law if it is in the ‘public interest,’ according to the IRC. Businesses with more than 300 employees couldn’t fire them without the government’s permission until recently. The number of employees allowed has now been decreased to 100. Regrettably, the labour code reform also places considerable restrictions on workers’ striking rights. The IRC bill’s provision for fixed-term employment contracts, which will allow businesses to recruit and fire workers at will, is one of the most concerning parts.

The Occupational Safety, Health, and Working Conditions Code Bill permits the government to exempt firms from the law for a specified period ‘in the sake of encouraging economic activity,’ despite the government’s commitment to worker safety. To make matters worse, the Social Security Bill does not provide workers with universal social security benefits. It has also limited the bureaucracy’s ability to assess how much provident fund and Employee State Insurance dues businesses owe.

The new labour legislation is overwhelmingly pro-business. The lakhs of guest lecturers in colleges earning pitiful wages for their intellectual labour would be unaffected by these much-hyped labour changes. Accredited Social Health Activists (ASHA) and Anganwadi employees are not covered by social security. They will also not put a stop to the everyday humiliation and sexual harassment of personnel in lower-level positions.

WORKERS’ RIGHTS AND THE FACTORS THAT AFFECT THEM

To appreciate the limitations of labour reforms, one must first recognize the problem’s three irreconcilable dimensions. To begin with, 94 percent of the 520 million workers in the labour force are employed in the unorganized sector. Only 10 percent of the workforce is represented by a union. As a result, workers’ bargaining leverage is severely curtailed. Second, no matter how strict the laws are, they are rarely enforced. Their effectiveness must be assessed in the context of the judicial system’s severe flaws. In India, we have rule of law rather than rule of law. Furthermore, as former Harvard Law School Dean Roscoe Pound pointed out many years ago, there is a significant gap between law in books and law in practice. Legislation, no matter how strong, will not make a significant change in the daily lives of workers. Third, nearly the entire judiciary, with the exception of a few progressive judges, has a dismissive attitude toward the working class. Remember how even Supreme Court judges have disparaged labour in their obiter dicta. These elements combine to create nearly insurmountable challenges to defending workers’ rights in India.

A thorough examination of labour reforms must address a number of concerns, including: what are the genuine challenges that the working class faces? Why do labour regulations almost never have an impact on workers’ lives? Where should we begin if we are truly interested in labour reform?

The first point to make is that the proposed labour code bills show little understanding of the huge changes that are occurring in the world of work and occupations. We are on the verge of the Fourth Industrial Revolution, as described by Klaus Schwab, founder of the World Economic Forum. Others regard the current transformation as the next step of Karl Polanyi’s Great Transformation, which he articulated in 1944. Julie Cohen, a law professor at Georgetown University in the United States, has identified three fundamental shifts that will have far-reaching implications for the labour market. They are ‘intangible resource prophetization, dematerialization, and datafication.’

While the outcome of these cataclysmic transformations is difficult to foresee, they have resulted in precarity, marginality, disempowerment, insecurity, alienation, and obsolescence in the short term. The working class has become vulnerable as a result of rising inequality, new labor-saving technology, the digital divide, and the ease with which capital may effortlessly obtain labour from many locations.

The degradation of dignity and recognition, personal security, and virtually no possibilities to develop as employees are less evident but far more dangerous concerns. The situation of gig and platform workers, who, according to British labour economist Prof. Guy Standing, are part of the “concierge economy,” demonstrates this. Despite being classed as micro-entrepreneurs and independent contractors, they are stuck in limbo.

They are not employees, and hence are not entitled to any of the perks of a regular employment, and they have no capital worth the name to qualify as entrepreneurs, except from their labour and, in some cases, their automobiles. In major cities, gig workers are commonplace. Pizzas and packages are delivered by them. They perform chores that we would rather not undertake ourselves. Platform workers are disembodied creatures who adopt a corporeal shape just to do the jobs they are lucky enough to receive, with no set salary, regular working hours, a workplace, or fellow workers to relate to. We adore the gig economy because it is both inexpensive and efficient. Gig workers, on the other hand, aren’t even on our radar.

FEEBLENESS OF LABOUR LAWS

Labor regulations are rarely effective because they do not prioritise two points. First, we deny the personhood of people who work for us by our laws, regulations, and everyday actions. Low-wage labourers are not considered human beings. Farmers, teachers, construction workers, factory workers, and others are thus a nuisance that we unwillingly acknowledge when they agitate and clog arterial streets. Even the courts have recently tried to make them invisible by limiting how and where they can protest. The working class does not exist for us unless we are in such dire straits. To protect ourselves from the nasty issues of the working class, we live in a self-induced slumber. A worldview that refuses to accept workers’ humanity will never be able to provide long-term answers to their issues. Consider how common servants are portrayed in movies, soap operas, and popular culture. They are almost always depicted as obedient and dumb factotums with no feeling of initiative. We have little respect for labourers because we do not see them as deliberate human agents. As a result, we enact lousy, tokenistic laws that we call “reforms.”

Second, labour laws fail because they are based on the concept that labour is a commodity. This notion has been clearly rejected by the International Labour Organization. We make a fundamental error if we think of labour as a commodity that can be purchased and sold. We witness a mismatch between workers’ potential and the demands of their jobs all around the world, to varied degrees. Workers become alienated and unhappy in their jobs when employment is reduced to a mere source of income.

HUMAN DIGNITY & SECURITY

The most gratifying sources of security are a stable, well-defined vocation with solid career possibilities and job we enjoy. Human security is defined by the United Nations Development Program as “freedom from want” and “freedom from fear.” In the guise of labour flexibility, a reform programme that supports a hire-and-fire policy without providing dependable alternatives is philosophically incorrect. Similarly, the concept of dignity acts as a guiding principle for remedial actions. Starting with Roman statesman Cicero (44 BCE), a long philosophical tradition has extended the concept of dignity from a marker of aristocratic rank to the most distinguishing attribute of human beings. Humans have dignity, according to Cicero, because of their ability to think rationally. Human dignity was also emphasised by Giovanni Mirandola, an Italian philosopher from the 15th century, who attributed it to the human potential of self-transformation. He claimed that humans’ ability to be anything they choose to be gives them an inbuilt feeling of dignity that cannot be violated.

The 18th-century German philosopher Immanuel Kant explained the meaning of dignity by connecting it to our status as normative beings. In his formulation of the Categorical Imperative, one of the universal principles compels us to respect people as ends in themselves, not as means to an end. Kant believes that as moral actors, we have the ability to create and bind ourselves to universal laws that cannot be broken. We are entitled to dignity because of our ability to harness the transforming force of reason and morality, regardless of what we do with it.

Workers are treated as cannon fodder under the labour code bill, which desecrates human dignity. Its elements are incompatible with employees’ fundamental rights, such as the government’s discretionary authority to suspend labour laws on thin grounds, withhold social security benefits, and limit strikes and lockouts. These inconsistencies stem from a conceptual disregard for the sacredness of human dignity in all of its forms. They also show why the proposed labour code bill fails to address one of the working class’s most pressing concerns: protecting their dignity from market forces.

TRAVAIL OF A MARKER OF IDENTITY

Our identity is shaped by our work. It provides us a feeling of who we are by defining our personhood. Labor is more than a source of income; it also defines our place in the world. Furthermore, work that is aligned with one’s natural human potential and resulting in its efflorescence gives ontological safety. It no longer feels like a chore. Instead, employment becomes a never-ending source of pleasure.

Our community is shaped by the work we perform. It is a source of our perspective and beliefs. A convincing concept of a unified, affirming society is to create a scientific, well-organized workforce where every individual is given the opportunity to develop as far as their talents will allow.

Any serious attempt to modify labour regulations must start with a rethinking of the enterprise’s fundamental foundations. This entails acknowledging the inviolability of ideals such as human security, dignity, acknowledgment, human potential, and human happiness. The first issue to examine is whether the proposed improvements will reinforce these fundamental values. All legislation and changes must be viewed through the lens of these ideals and must adhere to them completely.

HUMAN ACKNOWLEDGEMENT AND CAPABILTIES

Nobel laureate Dr. Amartya Sen’s insights on human capabilities may have been incorporated into the drafters of the labour code laws to avoid this hideous contradiction. His thesis is the result of a long and complex philosophical debate about equality and human development. Dr. Sen, who views development as fundamentally a means of expanding human liberties, argues that developing human talents is a pre-requisite for achieving genuine equality. Dr. Sen pioneered the basic needs and capabilities approach to equality, going beyond philosophers like John Rawls, Richard Dworkin, and Thomas Nagel, who focused on the equitable distribution of resources. He claimed that freedom entails not only the accomplishment of goals that a person values or has reason to value, but also the ability to do them. The goal of legislation must be to achieve this broad concept of freedom that emerges from the growth of one’s human potential. The labour code bills are theoretically brittle when viewed in this light. They give employers’ rights precedence over employees. Their underlying premise is that what employees demand as rights is government and employer handouts. The bills’ main goal is to control and manage workers’ aspirations, not to establish a system that encourages enabling qualities. This is one of the main reasons why none of the proposals do anything to empower workers or increase their negotiating power.

One could argue that the legislation’ mandate is to modify labour rules rather than to promote equality and human capacities. This division is unsustainable. Workplace relations do not exist in a vacuum. Workers’ rights are intertwined with social perceptions of the working class. One thing nourishes the other. Workers are confined to the periphery because labour rights are feeble and ineffective. As a result, they are plagued by social disapproval. The demands of the working class are not given priority because they are despised. This vicious loop takes on a life of its own over time. As a result, workers face a double whammy: unequal negotiating power and misrecognition, both of which have no end in sight. The relevance of acknowledgment in our lives has been extensively discussed by philosophers such as Charles Taylor and Nancy Fraser. They claim that when people recognise us for who we are, we become completely human through a dialogical process. Misrecognition or refusal to recognise is tyranny. Recognization politics, which is rapidly gaining popularity around the world, aims to reverse this trend. By being fair to the working class, the labour code measures may have supported this process. Instead, they are hardly able to hide their pro-capitalist leanings.

HUMAN BRANDISHMENT

The umbilical tie between dignity and human flourishing is a related, albeit little understood, point. The Aristotelean concept of eudemonia, or trying to be the best version of oneself, is the pinnacle of human existence. Aristotle highlighted the importance of establishing a social structure that allows people to connect with their higher selves. As a result, human flourishing should be at the centre of all our efforts, both in terms of one’s own life and in terms of the lives of others. This initiative necessitates that human agency and dignity be respected. Human beings do not flourish when their dignity is compromised. Furthermore, when we establish an ecosystem that recognises and nurtures talent, we strengthen human agency. The most enduring source of happiness is making the most use of one’s abilities. Aside from diminishing dignity, the labour code proposals are mute on how to equip and teach people to move up the value chain. They are blissfully unaware that being locked in a low-paying job with few opportunities for advancement is a recipe for labour unrest. It’s worth noting that the labour code bills, on the one hand, create conditions for worker discontent while, on the other hand, imposing severe limits on agitation.

REINSTATING WORKERS’ RIGHTS

All of the labour code bills’ anomalies stem from and are perpetuated by two factors: first, our philosophical errors about labour and its role in promoting the common good; and second, a common sense that denigrates most sorts of work. Dismantling the artificial mental hurdles we’ve erected is necessary to correct this predicament. This task can be accomplished on numerous levels. To begin, we must discard school and college textbooks that contain fictitious accounts of politicians’ childhood encounters with alligators. Similarly, hagiographies of actors and cricketers should be removed. Instead, our children must be taught the value of labour, the significance of dignity, and the obligations we have to one another as human beings. Second, judges, bureaucrats, police officers, politicians, and educators should all be obliged to take sensitivity training regarding the working class and their daily hardships. Third, the dehumanisation of workers in popular culture must come to an end. Denigrating the working class, not some raunchy sequences in movies, is the most repulsive form of vulgarity, contrary to common belief. None of these attempts will succeed until the labour code bills are buried to the depths of the ocean. No one will notice their demise, with the exception of business owners.

THE CHANGING FACE OF RECENT CASE LAWS OF LABOUR LAWS IN INDIA

This Case Update presents a summary of recent Supreme Court of India (SC) and High Court of Bombay judgements on labour and employment issues such as maternity and paternal leave in surrogacy cases, wage claims by absentee employees, and notification of performance ratings to affected employees.

  1. Surrogate Parents are entitled to Maternity and Paternity Leave

The division bench of the High Court of Bombay (Court) reiterated in Dr Pooja Jignesh Doshi v. The State of Maharashtra and Others[1] [Writ Petition No. 1665 of 2015, decided on 3 July 2019] that even if a child is born through surrogacy, the parents who lent the ova and sperm are entitled to maternity and paternity leave, respectively. The Court reaffirmed the legislation established by the Court’s division bench in Dr Mrs Hema Vijay Menon v. State of Maharashtra[2] [Writ Petition No.3288, decided on July 22, 2015].

Comment: The above cases involved events that occurred before April 1, 2017, when the government, through the Maternity Benefit (Amendment) Act, 2017 (effective April 1, 2017), added an explicit provision to the Maternity Benefit Act, 1961, stating that even a commissioning mother (i.e. a biological mother who uses her egg to create an embryo implanted in another woman) is entitled to maternity benefits. In addition, the Bombay High Court has ruled that a commissioning father is entitled to paternity leave. Paternity leave is not statutorily provided in India, and it is widely disregarded.

  • Clarification on No-work No-Pay Principle

The Supreme Court of India has underlined in Chief Regional Manager, United India Insurance Company Limited v. Siraj Uddin Khan[3] [Civil Appeal No. 5390 of 2019, resolved on 11 July 2019] that no individual can claim remuneration for time spent away from work without leave or justification.

In this matter, the Respondent was transferred from the Appellant’s Allahabad branch to the Appellant’s Jaunpur branch. However, the Respondent failed to report to the Jaunpur branch on time and was absent from work for four months without authorization. In May 2009, a disciplinary investigation was conducted against the Respondent, and an order for a two-step decrease in basic pay was issued. The Respondent, on the other hand, continued to be away from work until 2012. As a result, in June 2012, the Appellant issued an order terminating the Respondent’s employment. The Respondent filed a series of writ petitions against the above-mentioned orders in the Allahabad High Court. The High Court of Allahabad annulled the above-mentioned rulings, citing procedural flaws in the disciplinary investigation, but did not specifically require the Appellant to pay the Respondent back earnings from 2009 to 2012. The Respondent filed another writ suit in the High Court of Allahabad after the Appellant refused to pay back wages from 2009 to 2012. The Appellant was ordered by the Allahabad High Court to pay wages for the years 2009 to 2012, plus 18 percent interest. The Appellant filed this appeal in the Supreme Court against the High Court of Allahabad’s ruling.

The SC’s two-judge bench decided that reversing the termination order does not automatically entitle the Respondent to his or her income for the years 2009 to 2012. The Supreme Court distinguished the current case from a circumstance in which an employee was fired and then had his dismissal overturned, in which case he would be entitled to back wages. The Respondent was not eligible to claim arrears of wages because he was not kept away from work due to dismissal or by any order of the Appellant, according to the SC. As a result, the SC granted the appeal in part and directed the Appellant to assess the Respondent’s claim for back wages and issue appropriate instructions with reasons.

Comment: While the SC did not rule definitively on whether the Respondent was entitled to wages in this case, it did refer to legal precedents dealing with the idea of “no work, no pay.” The SC cited the Supreme Court’s ruling in Airports Authority of India and Others v. Shambhu Nath Das[4] [(2008) 11 SCC 498], which found that if a person was absent from work without authorization or reasonable justification, he was not entitled to pay for that time. The SC, on the other hand, has cited the case of Shobha Ram Raturi v. Haryana Vidyut Prasaran Nigam Limited and Others[5] [(2016) 16 SCC 663], in which the SC decided that an employer cannot claim “no work, no pay” if the employee has been prohibited from working. As a result, the Supreme Court has endeavoured to reaffirm that the ‘no work, no pay’ principle only applies when an employee has willingly absented himself from work, rather than when the employer has kept the employee from attending work.

  • Mandatory Communication of Annual Performance Appraisal Reports to Public Servants

The Supreme Court ruled in Pankaj Prakash v. United India Insurance Company Limited and Others[6] [Civil Appeal No. 5340-5341 of 2019, resolved on 10 July 2019] that all government employees have the right to know their grades in an annual performance review report (APAR).

The Appellant was aggrieved by the fact that his APAR entries for the previous two years were not disclosed, preventing him from submitting a representation for promotion at the time. The Appellant filed a writ petition in the High Court of Allahabad in response to the Respondent’s actions. In the absence of an adverse entry or an entry below the benchmark, the omission to transmit the grade in an APAR did not result in an actionable grievance, according to the Allahabad High Court. The Appellant filed an appeal against the High Court of Allahabad’s decision.

According to the Supreme Court’s judgements in Dev Dutt v. Union of India[7] [(2008) 8 SCC 725] and Sukhdev Singh v. Union of India[8] [(2013) 9 SCC 566], every entry in a public servant’s APAR must be disclosed to him or her within a reasonable time. Aside from maintaining system transparency, such disclosures also ensure that a public servant has a reasonable opportunity to object to the gradings if he or she is unhappy with the outcomes. In addition, on 14 May 2009 and 13 April 2010, the Union of India issued Office Memoranda requesting compliance from all ministries and departments. A special communication was also sent to public sector insurance companies on October 19, 2012.

As a result, the Supreme Court disagreed with the rationale of the Allahabad High Court, holding that non-communication of entries in an APAR, whether good or bad grades, is a subject about which the Appellant has a legitimate grievance. As a result, the SC ordered that the Appellant submit the specifics of the APAR to the Respondent within one month of receipt of this judgement.

Comment:  While performance appraisals are necessary for every organisation to function effectively, the public and private sectors use distinct procedures. Performance evaluations in the public sector are governed by specific procedures and directives issued by the respective government and agencies, which do not apply to private sector businesses. While there have been no judicial precedents dealing with similar issues in the case of private sector employers, private establishments may use performance appraisal procedures to ensure transparency in recording and communicating employee comments, as well as compliance with natural justice principles.


[1] Dr Pooja Jignesh Doshi v. The State of Maharashtra and Others [2019] SCC Online BOM 1433

[2] Dr Mrs Hema Vijay Menon v. State of Maharashtra AIR [2015] BOMBAY 231

[3] United India Insurance Company Limited v. Siraj Uddin Khan AIROnline [2019] SC 408

[4] Airports Authority of India and Others v. Shambhu Nath Das AIR [2008] SUPREME COURT 2896

[5] Shobha Ram Raturi v. Haryana Vidyut Prasaran Nigam Limited and Others AIR [2016] SUPREME COURT 157

[6] Pankaj Prakash v. United India Insurance Company Limited and Others AIR [2019] SC (Civil) 2679

[7] Dev Dutt v. Union of India AIR [2008] SUPREME COURT 2513

[8] Sukhdev Singh v. Union of India AIR [2013] SUPREME COURT 2741

Author: Abhishek Bhardwaj, Amity Law School, Noida

Editor: Kanishka VaishSenior Editor, LexLife India.

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