Tuesday, September 1, 2015

#StandUpIndia: Modi’s Labor law amendment will be a disaster for India’s workers

#StandUpIndia: Modi's Labor law amendment will be a disaster for India's workers

The amendment

  • Modi sarkar's labour law amendment will weaken unions and lessen management
  • Definition of a factory will be revised by doubling the minimum threshold of workers employed
  • To avail any protection and benefits, an employee has to be deemed permanent. 80% are not
  • Apprentice amendment bill gives employers the sole authority to decide hours of work of apprentices
  • Any person above the age of 14 can be appointed as an apprentice
  • This can promote child labour Labour unions are organising a nation-wide strike on 2 September to protest this amendment


  • 40,000 fatal industrial accidents occur in India each year. Only 222 of them are reported (ILO estimates)
  • Some, like 50-year-old automobile factory worker Narendra Kumarare left disabled for life
  • Most companies handle such accidents behind closed doors
  • Even unions seldom raise a hue-and-cry

Narendra Kumar was in the generator room of Sunbeam Auto Pvt Ltd 's factory on the Gurgaon Jaipur highway on 20 September 2012. Being the 'fitter' in the company for the past 15 years it was like any other day at Sunbeam. He had punched in his card at 9 am.

When he was called to check a connection, there were about 7 other people in the generator room. It looked like a simple enough job that needed welding and fitting.

Halfway through the task, when he touched one of the loose wires he felt a wild current running through his body. It was a short circuit. In an instant it was a flash fire that erupted and clung to his body. He fell to the ground, his body in flames. The workers in the room did everything they could to douse the fire, taking wet cloths and beating his body. But Kumar's skin was melting face down.

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His clothes had to be ripped off the front of his body. Within minutes an ambulance was called and he was rushed to a nearby hospital. Upon realising the severity of the burns, he was eventually taken to Delhi's Ram Manohar Lohia Hospital. Kumar was diagnosed with 55% burns.

What he regrets is not that the entire front of his body, face down, looks like a half-cooked omelette – it is that the bones of his fingers reshaped themselves in the burn and have now made his fingers, like spread out digits, unable to touch each other. The most Kumar can do is make his left forefinger lightly touch the tip of his thumb, useful only for perhaps holding a cup of chai.

For all other purposes, his hands have become permanently disabled.

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Industrial accidents

Most companies however would keep an industrial accident like Kumar's tightly under wraps. A 2005 press release of the ILO estimates that each year 40,000 fatal industrial accidents occur in , whereas only 222 of them are reported.

Companies often deny having any industrial accidents at all. Cases like Kumar's are handled behind closed doors to avoid any media involvement and public hue-and-cry.

"It was a freak accident. I was wearing rubber boots, but it didn't help. The fire extinguishers were there but the workers did what came to their mind, which is to take a cloth and first douse the fire on my body," says 50-year-old Kumar, who had moved from Uttar Pradesh to Gurgaon in search of employment in 1997. Still, it is surprising that Kumar has none of the bitterness one would have toward a workplace that crippled him for life.

After all, the company has taken care of all the expenses for his treatment over the last three years, about Rs 13,000 a month. He went through five surgeries every couple of months to surgically remove portions of skin from his thigh to be stitched on his hands. And some surgeries to improve dexterity.

Not just that, Kumar has also been paid the same salary he was drawing during the time of his accident, which is Rs. 20,000 each month. It helps run the family. His wife takes care of home while his son studies in Class 6.

"We were a newly formed Union then. Kumar's was the first accident that the company had to deal with. The negotiations were smooth with the management and they agreed to take care of all his expenses and continue his salary upto his retirement," says Mukesh, a senior within the 1067 member strong labour Union at Sunbeam.

80% workers in manufacturing have no written contracts. They can't avail any protection or  benefits

The company learnt a hard lesson: not to take safety for granted. On its part it invested in fire resistant jumper suits for all employees who have to be in contact with electricity. "Each suit cost Rs 11,000. The company spent about Rs 11 lakhs on the suits after Kumar's accident. We haven't had another case since," says Mukesh.

Was Kumar wearing no safety gear? "He was wearing boots, but these are freak accidents you can't be prepared for," says Mukesh, quick to defend his management.

Most active unions this reporter spoke to within Gurgaon were careful to not point to the wrongdoings of their company, no matter how obvious they were. All accidents seem to be quickly resolved with the total cooperation of the management, unusual, for any trade union to be saying, especially small Indian manufacturing units, away from the radar of public scrutiny.

When an amendment is a catalyst for more disaster

Mukesh, however, is gearing up for the all India level labour union strike that will be organised on 2 September.

"With Modi sarkar's labour law amendment, this will only mean more industrial accidents, lesser roles of trade unions and lesser management accountability." he says with clarity.

Mukesh and many others are worried that the amendment will weaken labour protection from multiple corners.

For starters is the factory amendment bill of 2014, which is proposing to revise the definition of a factory by doubling the minimum threshold of workers employed in most small factories today: The minimum number of workers in a factory is sought to be doubled to 20 for units with power and 40 for non-power backed units.

According to the Annual Survey of Industries 2011 – 12, of a total 1,75,710 factories in the country, employing 1,34,29,956 workers (of which 36,10,056 are contract workers) 71.31% of factories employing less than 50 workers is likely to be excluded from the coverage of Factories Act owing to the new threshold.

The Labour Ministry concurs. According to 2010 data based on returns submitted by factories under the Factories Act, 1948 reveals that of the 67,508 factories that submitted returns (except ), 52.5 per cent, or 35,208 units, had employed less than 20 workers.

That is 3,78,970 workers who will not be considered "factory workers" and be effectively thrown out to the unorganised sector and outside the purview of any labour protection if the amendments are passed.

To avail any kind of social protection and  care benefits, an employee has to be deemed permanent. 80% are not.

"Seven out of ten workers are contract workers. One out of ten are apprentices. Only 20% of employees in Haryana's factories are permanent. Only these can claim health benefits," points Khushiram from Mazdoor Sahyog Kendra, a Gurgaon based worker union.

According to a recent report by Catch, one in every two workers in all manufacturing are short-term contract workers. 80% of workers in the organised manufacturing sector have no written job contract or have one-year sub contracts. A vast number of them work for sub-contracting firms that supply labour to the organised sector.

Apprentice or cheap labour?

Add to that bringing a new wave of workforce called 'apprentices'

In a possibly pre-emptive move to boost Modi's Skill India initiative, the apprentice amendment bill, passed by the Rajya Sabha late last year allows employers sole authority to decide the hours of work and leave taken by those appointed as Apprentices. In what could unquestionably become the key to child abuse, any person aged 14 and above can legally be appointed as an apprentice.

The Act also seeks to protect defaulting employers by removing imprisonment as punishment for violating the provisions of the Apprentices Act, 1961. Freedom from a violation can be bought cheap – for as little as Rs 500.

Labour activists see a rise in apprentices also because the new amendments allow the Centre to entirely dictate the apprentice to worker ratio in a factory and overrule what was earlier decided by the Central Apprenticeship Council, a more democratic body. Some sourcessuggest that this has led to a minimum 30% of total workers in all factories getting appointed as apprentices.

By changing definition of 'factory', Modi's amendment will throw 3.78 lakh workers into the unorganised sector

A growing industry trend ever since as been to replace contract workers with apprentices who will need to be paid 70% of minimum wage, saving the industry labour cost.

"When I first joined as an apprentice, I used to think this was a period of training and my skills would expand. But for years all I had to do was tighten a single seat on a car using four bolts. That was all I was taught. Till today I haven't learnt a single other thing about assembling a car. The process line is such that you can spend years doing the same precise action thousands of times and not have a clue how to do the next logical thing. You call this a skill?" says Khushiram who started his career working as an apprentice at the Maruti Manesar plant.

An epidemic of broken fingers

The repetitiveness of a task can not only be frustrating, it often leads to a lack of concentration, which in a highly mechanised work setting, triggers industrial accidents.

Last year, a bizarre syndrome called the Gurgaon Broken Fingers Epidemic was reported by some sections of the media. In a trend that still continues, workers in Gurgaon factories manufacturing automobile parts, often engage in doing a repetitive task where their job is to insert a part between two heated plates of a power press, which cuts, shapes or moulds metal by ramming it with a heavy piston-like arm. The speed is fast and demands your eyes and hands to be in precise coordination. It seems impossible not to falter. When workers work overtime, on 12 hour shifts they sometimes lose their concentration and their response time takes a second longer. When the heated plates come together, it is often a finger or a hand that gets crushed.

The machines are archaic. Ideally, there must be a low cost sensor which detects human prescence and automatically stops. But few companies want to make the investment. RDC Steel and Allied Services Ltd in Manesar, was one of the few companies who decided to consciously up the safety for its workers. "When we saw our workers losing fingers we decided to install human sensors in our machines. It cost us 10 Lakhs but at least it has helped save the hands of our workers," says Dinesh, head of operations

These are called "crush injuries" at Manesar's ESI Hospital. "Losing fingers is a daily affair. The company might send them to a hospital to get it healed, but a worker without his fingers is as good as a broken machine. Since these are mostly contract labourers, the management eventually terminates his employment and he remains jobless for life," says Monu, a labour lawyer based in Gurgaon.

Diluting voice

When Gurgaon's trade unions individually say that the new labour law amendments will spike industrial accidents, they are essentially referring to two specific amendments: One is the practice of self certification that the amendment proposes to strengthen in place of external labour inspections. The other is the weakening of the collective bargaining power of Trade Unions.

It should hardly be a surprise that factory inspection in India is dismal. The proportion of factories inspected declined steeply from 63.05% in 1986 to 17.88% in 2008. But does self certification, a process of issuing a certificate to yourself commending your own security safeguards for the welfare of your workers, one that can be realistically trusted? "This is a recipe for disaster. Nobody outside will know what's happening within the walls of the factory. By ruling out labour inspections there is effectively nobody a factory needs to be accountable to," says Mukesh.

Also by making the laws harder for trade unions to form and once formed, reducing the opportunity to strike has been the main reason for the 2 September strike. "It was all Mukesh and his team who negotiated with the management at Sunbeam for me. I couldn't have asked for more," says Narendra Kumar, looking down at his crippled fingers.

Yet, Kumar knows how easily the tables could have turned on him. On 12 August this year, when 24 year old Ramji Lal was working at SKH automobiles pvt ltd, a company that makes parts for Maruti Suzuki at Manesar, while working he accidentally came within close rage of one of the many production robots on the factory floor. To the shock of onlookers, the robot suddenly gripped Lal crushed his body, puncturing his chest and stomach and threw him away. A post mortem said he died due to internal crush injuries and blood loss.

Lal had been married just a year ago. His wife is yet to receive any compensation from the company. It is little solace that the company management and contractor have meanwhile been booked on charges of causing death due to negligence. His family is shattered and hardly has the strength to fight the long messy battle for justice.

"The whole exercise is aimed at relieving defaulting employers" – Tapan Sen

Tapan Bose

As central trade unions ready to go on strike on 2 September, Deepa Kumar spoke to Tapan Sen on the health and safety standards for India's workforce. Sen is the general secretary of the Centre of Indian Trade Unions, politically attached with the CPI (M). He is also a member of the Rajya Sabha.

DK: Will the new labour amendments make health and safety worse for workers? If yes, how?

TS: Absolutely. The safety-related issue lies in tweaking the Factories Act. The proposed tweak could do away with the schedule that the labour ministry uses to determine whether industries are 'hazardous'. Instead, they have put a more general definition of 'hazardous', which is vague.

If that list is removed, it is upto interpretation and the goodwill of the labour ministry. They will interpret the definition on a case-by-case basis.

Ideally, the hazardous list should keep getting updated each year to make it a relevant referral list. The whole exercise of doing away with the list and keeping the definition of 'hazardous' vague is aimed at relieving defaulting employers.

Apart from the list, the amendment dissolves the role of the labour ministry in taking safety complaints. Instead, it has announced the formation of a regulatory authority on safety.

While the name sounds impressive, this is dangerous because the ministry is outsourcing the important role of monitoring safety violations to a body of so-called 'experts', comprising of bureaucrats with no accountability to anybody. The body is neither accountable to trade unions, nor to Parliament.

This is a nasty trick so that the  has no real obligation to investigate safety violations.

Monitoring safety violations is an important role of the labour ministry; but it is outsourcing that to so-called experts

DK: Will labour amendments increase unorganised labour in the form of apprentices? What safety obligations does the industry have towards them?

TS: India's unorganised sector has never fallen under any health and safety standards. The amendment will only bring more workers into the unorganised fold.

It provides cheaper labour and employers are not obliged to provide any form of labour protection to non-permanent employees.

The entire Skill India initiative is a sham. They are just pushing more workforce towards informal employment. The quality of employment will be lower.

And, once employees are given a role in the assembly line as apprentices, their promotions might be delayed inordinately.

It is completely at the discretion of the employer to see when an apprentice can become a permanent employee. The employer would not be interested in giving that opportunity since it entails higher labour wages (apprentices are paid lower than minimum wage) and a commitment to offer health and safety coverage.

The Central government is yet to set a defined ratio of the number of apprentices to workers a factory can hire. With Modi's thrust on Skill India, we expect it to be high. Apprentices will be a big productive force to drive up personal profit.

There are 7,000-8,000 contract workers at the Maruti factory in Manesar. There are 3,000 apprentices. They all work together on the assembly line.

A regular worker once told me that he and his co-worker, an apprentice, were ITI batchmates. "By chance I got regular employment and by chance he got to be an apprentice," he told me.

Employers have no liability whatsoever to workplace injuries or accidents, when it comes to apprentices and contract workers. In such a scenario, accidents are bound to increase.

DK: The International Labour Organisation says workplace safety in India is very poor. Are companies following norms? Have there been attempts to improve this situation, especially over the last few decades?

TS: What the ILO says is absolutely correct. Companies have been flouting safety norms for a long time. In fact, now it is easier for companies to flout safety standards.

This is why one major demand from all trade unions striking on 2 September is strict implementation of our original labour laws and stringent punishment for violation.

According to the amendments, punishment will not be compounded, which means it will not be increased with gravity of violation. This is dangerous for worker safety.


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