IASbhai Daily Editorial Hunt | 26th Dec
“To live a creative life, we must lose our fear of being wrong.” – Anonymous
EDITORIAL HUNT #285 :“Wistron Case and Labour Laws | UPSC ”
Wistron Case and Labour Laws | UPSC
R. Nagaraj is with the Centre for Development Studies, Thiruvananthapuram, Kerala
The fallout of keying in the wrong labour codes
As the Wistron case shows, hoodwinking industrial workers is economically suicidal and damaging to India
SYLLABUS COVERED: GS 2 : Wages : Labour Laws : DPSP
Wistron’s Case can potentially mark a dent on successful initiative like Atmanirbhar Bharat Abhiyaan. Critically examine the causes, impact and lack of governance in the organised sectors. -(GS 2)
- Wistron Case
- Incident and Deeper Impact
- The pandemic as foil
- The Code on Wages Bill 2019
- How China regulated the labour industry ?
- Way Forward
- LOSS OF PROPERTY : There are reports that property worth ₹50 crore was damaged, and many workers sent to jail.
- TOTAL WORKERS : The factory which began production in July, employed about 2,000 permanent workers and 7,000 contract workers.
WHAT CAUSED THE VIOLENCE?
- PARTIAL WAGES : The reason is said to be the reported non-payment, or only partial payment, of wages, or its delay.
- CONTRACTUAL OBLIGATIONS : Flouting of labour laws, such as non-issuance of the wage contract, and employing women workers in night shift without providing adequate safety.
INCIDENT AND DEEPER IMPACT
- CONDEMNING VIOLENCE : State is now busy controlling the damage the incident has caused to the country’s high-profile global campaign to attract foreign direct investment.
- ATMANIRBHAR BHARAT SUCCESS : The Wistron project showcased the state’s success in attracting foreign direct investment, and promoting Atmanirbhar Bharat, the vision of making India self-reliant.
- VIOLATING LABOUR CONTRACTS : Wistron and its labour contractors violated many provisions of the laws that led to the violence.
- CONSEQUENCES : The Taiwanese assembler has admitted its faults, and sacked its vice-president for its India operations for the lapses.
- THE CORPORATE RESPONSE : Apple Corporation has condemned the violations of statutory laws and has reportedly put further business on hold until Wistron addresses the labour dispute.
- RECENT AMENDMENTS : In July, the State government promulgated an ordinance to dilute the major labour laws including the Factories Act 1948.
- THE NEW FACTORY LAW : The Act regulates the ordinary working day’s length, overtime wages, hours of work, the timing of shifts, safety, and health issues.
THE PANDEMIC AS A FOIL
- DEGRADING LABOUR LAWS : Amid the health pandemic and the lockdown, a few State governments sensed an opportunity to quickly ram through pieces of legislation or ordinances to whittle down the labour laws.
- GEO-POLITICAL ISSUES : It was purportedly to attract foreign capital seeking alternative locations to China, considering rising geopolitical tensions.
- AGGRESSIVE REFORMS : The reform effectively knocks down the foundations of national labour laws by paring down many protective laws.
- RATIONALISING LAWS : India’s labour laws are indeed a cumbersome web — some 47 central laws and 200 State laws, mostly applicable to organised sector workers — requiring rationalisation.
- COMPLEXITY AND LEGAL FRAMEWORK : Efforts to consolidate them have been on for quite a while, but with modest progress for lack of agreement among the stakeholders and the complexity of the legal frame.
THE CODE ON WAGES BILL, 2019
- AMALGAMATION : In 2019, New Delhi consolidated 29 central laws into four labour codes and introduced bills in Parliament.
- THE CODE CONCERNS : Industrial relations; occupational safety, health and working conditions, social security, and wages.
- OPPOSITION : National trade union federations, the Bharatiya Mazdoor Sangh (BMS), have opposed many contentious changes.
- INDIA IS A MEMBER OF ILO : The reforms go against many of the International Labour Organization (ILO) conventions to which India is a founding signatory.
HOW CHINA REGULATES LABOUR?
- SOCIAL SECURITY : China also mandates employers to provide dormitory accommodation for workers close to factories and other social security benefits.
- SLUM FREE CITIES : Factory-provided dormitory accommodation is the principal reason for slum-free Chinese industrial cities, unlike in India.
- SUBSIDISING PRODUCTION COSTS : China’s local governments compete with each other to offer excellent physical infrastructure and ensure adequate credit to industrial enterprises through the national development banks.
- ROLE OF STATE GOVERNMENTS : The local governments and party officials, whose objective is employment generation, act as midwives in industrial promotion.
WHY DO THEY DO SO?
- REWARD SYSTEM :The professional rewards for Chinese bureaucracy and provincial ruling party officials are dependent on the local economic performance.
DATA ON EARNINGS
- AVERAGE DAILY INCOME : The average daily earnings of casual workers in urban India in 2018-19, as per the official Periodic Labour Force Survey are ₹256 (or ₹6,400 a month for 25 days of work).
- LONG WORKING HOURS : Industrial workers are ever eager to work longer hours for overtime, considering the low absolute earning levels.
- WINNERS TAKE ALL : Trade unions mostly welcome negotiations for labour flexibility linked to productivity but resist its unilateral imposition if the productivity gains accrue mainly to the management (the ‘winner takes all’ situation).
- INSENSITIVE RESPONSE : During the lockdown, when lakhs of workers lost jobs and livelihoods, trudging back to their villages, an insensitive states cleverly sought to capitalise on working-class misery to undercut wages.
- IMPACT ON FDI : So, it should not come as a surprise if such hasty and crafty measures have now backfired, denting India’s image among global investors.
- A LESSON LEARNT : The Wistron dispute has apparently turned the clock back on the state’s efforts to boost domestic production (‘Make in India’), and enhance national self-reliance (Atmanirbhar Bharat).
SOURCES: THE HINDU EDITORIAL HUNT | Wistron Case and Labour Laws | UPSC