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Saturday, April 1, 2023

The Uncertainty Looms Large in Labor Arena on International Workers’ Day

The permanent jobs are waning out, and the contract system is the order of the day

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Raju Vernekar
Raju Vernekar
Raju Vermekar is a senior Mumbai-based journalist who have worked with many daily newspapers. Raju contributes on versatile topics.

INDIA. MUMBAI: Even as we celebrate International Workers’ Day on First May, with drastic changes in labor laws to ensure the “Ease of Business,” the uncertainty looms large in the country’s labor arena.

While presenting the budget for 2022, Union Finance Minister Nirmala Sitharaman stated that the government’s next goal is to create 60 lakh employment through “PM Gati Shakti,” which will propel the economy forward and lead to more jobs and opportunities for the youth.

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In its recent report, the Mumbai-based Centre for Monitoring India Economic (CMIE) has stated that the overall unemployment rate in the country has dropped to 7.5 percent, with the urban unemployment rate at 8.5 percent and rural at 7.1 percent in April this year.

But the situation varies in different parts of the country. As per the data, Haryana has the highest unemployment rate at 26.7 percent, followed by Rajasthan and Jammu, and Kashmir at 25 percent each. Bihar is at 14.4 percent, Tripura at 14.1 percent, and West Bengal at 5.6 percent.

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The permanent jobs are waning out, and the contract system is the order of the day. Surprisingly, over 100 casual employees continue to work on a contract basis in the Union Government-controlled media-Mumbai Doordarshan for more than five decades. Even some of the departments of the Maharashtra Government have been employing people on a contract basis with a minimum salary. 

Against this, those in the organized sector fight for more remuneration. It is common knowledge that the successive Pay Commissions are being set up to fulfill the demands of the Government employees by the Union Government. Also, the dearness allowance based on inflation is revised from time to time.

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Several jobs were lost, and the economy was thrown out of gear due to the Covid pandemic in the last two years. The number of gainfully employed people, 44 crores in 2013, came down to 38 crores in 2021. This meant that six crore people went out of a job. Although the Union Government claims to be generating jobs every year, no jobs are available, CPM Polit Bureau member Dr. Ashok Dhawale said while speaking to the Transcontinental Times.

In Maharashtra alone, nearly 4 lakh people are unemployed. Over 90 percent of people work in the unorganized sector across the country. We had organized a nationwide agitation in March this year, and now we will have to organize the rage on a massive scale once again, Dr. Dhawale added.

According to Comrade Prakash Reddy (CPI, Maharashtra), social security leaves much to be desired with growing unemployment. The Provident Fund interest rate has been lowered to 8.1 percent, 8.5, and earlier. The norms related to payment of minimum wages, bonuses, and gratuity have undergone a sea change. An eight-hour shift is gradually turning into a 12-hour shift in most establishments. Besides, the firms with up to 300 workers can hire and fire without a government nod.

The Union Government has consolidated nearly 29 central labor laws into four major labor codes, namely: The Code on Industrial Relations, 2020 (CIR), The Code on Wages 2019 (COW), the Code on Social Security, 2020 (CSS), and The Code on Occupational Safety, Health and Working Conditions, 2020 (OSH). The objective behind this initiative is “to generate employment and facilitate ease of doing business.” But these codes focus on macroeconomic growth rather than workers’ growth. 

While the COW was passed in 2019, the remaining three labor codes were passed during the Parliament’s Monsoon Session in 2020, despite the Opposition’s boycott of controversial farm policies. These labor codes have yet to be made public, and the rules governing them are completed. However, a provision allowing enterprises with up to 300 employees to fire workers is a valuable weapon.

The country has over 40 million internal migrant workers. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 (ISMA), has been subsumed under the OSH Code, which encompasses the Factories Act, 1948, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and the Contract Labour (Abolition and Regulation) Act, 1970 (“CLA”).

Whereas earlier, the ISMA applied to the establishments that employed five or more workers, now the ISMA would apply to establishments that employ ten or more workers. Due to this increased threshold, most establishments are expected to be left outside the scope of regulation.

Similarly, while the CLA applied to establishments that hired 20 or more contract workers earlier, the Chapter on Contract Labour now applies only to establishments hiring 50 or more workers. Consequently, a large proportion of workers will be vulnerable to exploitation without remedy.

Under the ISMA, an inter-state migrant worker was defined as a person “recruited by or through a contractor” in one state for employment in another state. The OSH Code includes the workers directly employed by the employer in the destination state, and the provision of “contractor” has been dropped. The Code has introduced income as a criterion by excluding those who earn more than Rs 18,000 per month from the scope of its protection. Also, under the OSH, the contractor is not liable to pay a displacement allowance to the inter-state migrant workers. It also does not give protection to intra-state migrant workers. A majority of the migrants are migrants within state boundaries.

Migrant workers

Meanwhile, most the states have begun registering the construction workers, and the licenses are given to contractors employing migrant workers under ISMA. However, the lack of documents and the requirement for more than 90 days of work in a year hinder registration. Besides, such online registrations give broad scope to agents carrying out such registration work.

The lockdowns in the first and second Covid waves exposed the lack of preparedness of most states, although subsequently, some compensation was given to the construction workers. Rs 1500 per worker was presented during the first and second waves in Maharashtra, benefitting over 12 lakh construction workers.


Also, the Union Government has claimed successful implementation of the ‘One Nation One Ration Card’ (ONORC) scheme, which facilitates buying subsidized rations from any fair price shop in the country. According to the Union Consumer Affairs, there are 77 crore beneficiaries in 34 states and Union territories, and Delhi, Haryana, Maharashtra, and Gujarat are the top destination states that have recorded the maximum number of inward transactions, Food and Public Distribution Ministry.

Labor laws are expected to correct power relations between employers and workers. They should not be used as a weapon against the working class.

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  • Raju Vernekar

    Raju Vermekar is a senior Mumbai-based journalist who have worked with many daily newspapers. Raju contributes on versatile topics.

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