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What needs to change to ensure industrial peace

Prabhat Chaturvedi is widely known to be a pro-labour bureaucrat. The former labour secretary to the central government spoke to Goutam Das on why industry is faltering

twitter-logo Goutam Das        Last Updated: June 3, 2014  | 16:21 IST
What needs to change to ensure industrial peace
(Picture for representation only) Photo: Reuters

Prabhat Chaturvedi is widely known to be a pro-labour bureaucrat. The former labour secretary to the central government spoke to Goutam Das on why industry is faltering and what needs to change to ensure industrial peace . Edited excerpts:

Q. Why is industry not able to get a handle on labour strife?

A. When liberalization started in 1991, in the decade of the 1990s, the Human Resources (HR) department was a very important department from the perspective of management. They were the people who were interacting with workers. Post the decade, HR became a backbencher. HR was not an attractive subject in management schools. Finance and marketing were seen to be more important. This resulted in a breakage of dialogue between workers and management, which always used to happen in India after independence. This is one of the reasons why we see problems even in industries where the wage levels are good. Now, the worker is also a human being. If you get Rs 25,000 today, you will aspire for more. That has to be handled. If there is continuous dialogue with the management, these things do not happen.

The second biggest factor is contractualization of labour. Industries started cutting costs by exploiting human resource, not by using technology or improving efficiency. The ratio of regular versus contract workers was 90:10 before 1990s. It came down to 30 per cent regular and 70 per cent contractual after 2000. The model reversed. The same work on the shop floor was being done by a regular worker. If a regular was being paid Rs 30,000, the contract worker on the same machine was paid Rs 7,000-8,000. This is exploitation of human resource. It was done for profit making. How long will the worker tolerate this? So frictions started. This is exactly what happened with Maruti in Gurgaon. After the incident, they decided not to have contract workers.

As per law, contract workers can be employed only where the work is not regular like loading, unloading etc. But everybody flouts that law. So why are they doing it? They want to be competitive by exploiting human resources. Other things to become competitive are more difficult - better management practices, improvement of technology, productivity, re-skilling the workforce etc. These are not done. The country will have to solve this problem if it wants industrial peace. The industry's argument is they can't hire and fire permanent workers. But in a democracy, why should somebody be allowed to hire and fire? When the industry used to come to me saying there should be some rationalization of labour laws, I used to say I am all for it. Please tell me which labour law and which sections were creating problems. We are open.

Q. Did the industry come back with specific recommendations on reforms in laws?

A. They will never come back. The law doesn't become bad just because it was in 1947. You have to say these are the sections creating problems. The industry always talks in general terms and is never specific. That is the tragedy. Trade unions are not against simplification of the law. They are against exploitation of labour.

Q. So most companies are flouting laws and you believe there is exploitation?

A. That is happening. I know of companies known for their good management practices where contract workers don't have a social security cover. They are also not allowed to have a cup of tea in their factory canteen. Labour inspector is a bad name today. State governments say they have stopped 'inspector raj'. But industries must self-regulate. Follow the law. The stakes of the industry is much more than labour. They should take the initiative. Then, industry wants their associations but say workers should not have trade unions. Collective bargaining power is a fundamental power of the worker. The importance of industrial relations has to be understood by the industry in the current scenario.

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