Four Years of Modi Govt’s Labour Reforms

J S Majumdar

THE BJP-led Narendra Modi government, during the four years of its tenure, introduced several pro-corporate “labour reforms”. Designed in neoliberal framework, some of these are for immediate effect and some are to roll over beyond the 2019 Lok Sabha election as part of the BJP’s ‘New India 2022’ campaign.

The BJP’s neoliberal labour reform is for “ease of doing business” as aptly stated in the object and reasons of the Factories Amendment Bill 2016 -- “with a view to boost the manufacturing sector and to facilitate ease of doing business”.

Soon after coming to power, the Modi dispensation proposed to prepare four labour codes amalgamating all existing 44 labour laws with changes to fit in neoliberal framework. However, none of the above codes has been adopted by Parliament in the four years of BJP rule. Only the Code on Wages Bill, replacing four wage-related existing laws -- the Minimum Wages Act, Payment of Wages Act, Equal Remuneration Act and the Bonus Act -- has been introduced in Parliament in August, 2017 and a draft of the Bill on Code on Industrial Relation is ready. The two other -- Labour Code on Social Security and Code on Occupational Safety, Health and Working Conditions -- are in different stages of drafting. It seems that these are designed to spill over to next Parliament post the 2019 general election.

The Modi government did not wait for these labour codes to be passed by Parliament, and it went ahead in attacking the workers in three major areas. This was also a signal to BJP-led state governments that also brought substantial state amendments of labour laws for “ease of doing business” by the industries.

One major area of immediate attack on the workers was amendments in the Factories Act. The first amendment in 2014 was to double the number of workers required in a unit, it to be called as a “factory” --from 10 to 20 with electricity and from 20 to 40 without electricity. By this amendment, 70 per cent of registered factories went out of the purview of the Factories Act and, thereby, out of safety and labour rights under the Act and the workers remaining at the absolute mercy of the employers.

By another amendment in 2015, the factory owners are allowed to hire women workers in night duty, obviously with lesser wage. The third amendment in 2016 was for raising limit of overtime working hours in a quarter from 50 hours to 100 hours, to 115 hours with heavy workload and 125 hours ‘in public interest’. So, for ‘public interest’, the government can allow the employers to force the workers to work overtime up to 125 hours a quarter!

The second major of attack on the workers was large scale replacement of permanent and contract workers by ‘trainees’ appointed under the National Employability Enhancement Mission (NEEM) scheme in factories and establishments. The Modi government introduced the All India Council for Technical Education (National Employability Enhancement Mission) Regulations, 2017, replacing 2013 NEEM regulation brought in by the Manmohan Singh government at the fag-end of UPA-II rule. The NEEM Regulation 2017 provides for a three-year period of ‘training’ with minimum wage paid as consolidated amount without any statutory benefit or increment. Exedy automobile parts manufacturing company in Greater Noida in Uttar Pradesh, a Japanese enterprise, engaged about 400 ‘trainees’ under the NEEM Scheme out of its total workers strength of 450, removing almost all permanent and contract workers in stages. Similarly, Chemplast has several factories in Tamil Nadu and Puducherry. The workers in its Mettur plant recently achieved victory after a seven-day stay-in strike against victimisation of the union leaders. The management of this company removed permanent workers through VRS and recruited NEEM trainees in large numbers. There are a number of examples as to how the NEEM Regulation is being used to replace permanent and contract workers by factory owners.

The third major area of attack on the workers was in March 2018 when the Modi government issued notification amending the Industrial Employment Standing Order Central Rules for introduction of ‘fixed term employment’ in all sectors to replace permanent employment. However, there was an attempt to create illusion about it by making provision that these fixed term employees would be given all statutory benefits accrued to permanent employees. Against this attack of ‘fixed term employment’, the workers resorted to countrywide protest and statewide strike and bandh in Kerala on April 2, 2018.

Duration of fixed term employment is left to the respective employers. But, the government’s indication is very clear. Union Finance Minister Arun Jaitley made it clear in his last budget by stating that employer’s part of monthly EPF contribution for fixed term employees would entirely be borne by the central government for three consecutive years. This incentive of the government ensures that a fixed term employee is recruited only for three years to be replaced by new recruits. This is also to create illusion of employment generation. EPF new accounts would be considered as indicative of new employment as made out in Jaitley’s last budget speech. Piling unemployment at the end of the fixed term is ignored. 

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