The First National Commission on Labour

The Commission, which was appointed by the Government of India Resolution No.36/14/66-I&E of 24 December 1966, had more comprehensive and elaborate terms of reference. The Commission was specifically required “to review the changes in conditions of labour since Independence and to report on existing conditions of labour”.

In 1969, the First National Commission on Labour submitted its detailed report along with its recommendations to the government. The general recommendations of the Commission for the unorganised sector were as follows:

v      A better understanding of the problems of different categories of unorganised labour is essential to the formulation of suitable ameliorative measures. Detailed surveys about conditions of work in these employments should be undertaken.

v      The State will have to play an increasingly important role in providing legislative protection for unorganised/unprotected labour. The requirements of legislation and revision of existing measures should be under constant review.

v      Legislative and administrative procedures applicable to small establishments should be simplified to facilitate their understanding and implementation. The machinery for the enforcement of law and welfare measures should be strengthened.

v      The difficulties of small employers, who find it difficult to employ separate staff to look after various formalities and keep accounts, are genuine.

Whether the report of the First National Commission on Labour was implemented is still a mystery. Even, the members of the Second National Commission on Labour, ironically admitted that they did not know the status of the First National Commission on Labour report.

The Second National Commission on Labour

On 11 January 1999, the then Union Labour Minister, Satya Narayan Jatia, announced the decision of the government to set up the Second National Commission on Labour. According to the Minister, the constitution of such a Commission was to suggest rationalisation of the existing laws to make them more relevant and appropriate in the changing context of globalisation and opening up of the Indian economy. The Second National Commission on Labour was also to suggest an umbrella legislation to ensure a minimum level of protection to the workers in the unorganised sector.  Among the main reasons for setting up such a Commission were:

v      Changes in the economic environment of the country have brought about radical changes in the domestic industrial climate and labour market after the implementation of the new economic policy in 1991.

v      There is a need for a new look into the labour laws in the changed scenario of industrial relations creating uncertainties in the labour market.

Keeping these factors in view, the government constituted the Second National Commission on Labour as a high-powered body with Raveendra  Varma, renowned Gandhian and  former Union Labour Minister as its Chairman.

The Second National Commission on Labour, in its report submitted in June 2002, stated that the unorganised sector should have a policy framework that ensures:

v      Generation and protection of jobs

v      Access to jobs

v      Protection against exploitation of poverty and lack of organisation

v      Protection against arbitrary or whimsical dismissal and denial of minimum wages.

It also said that a system of welfare should include access to compensation for injuries suffered while engaged in work, provident fund, medical care, pension benefit, maternity benefits, child care shelter and old-age support.

The report of the Second National Commission on Labour was discussed as one of the items on the agenda at the Indian Labour Conference (ILC) meeting held on 28-29 September 2002. Though different stakeholders, especially the trade unions, had expressed their disapproval of the contents of the report, there was convergence of views on certain recommendations. These included:

v      Introduction of an umbrella legislation for workers in the unorganised sector and agricultural labour

v      Creation of skill development fund for training/retraining of workers

v      Encouragement of small scale industries, agri-business and rural sector for higher employment generation

v      Bringing about attitudinal changes and changes in the mindset and work culture where employer and worker treat each other as partners, with emphasis on participative management

v      Consolidation of social security legislations

A meeting of the trade unions called by the then Prime Minister Atal Bihari Vajpayee on 18 October 2002 to resolve the differences on the recommendations of the Second National Commission on Labour failed to reach a consensus. The trade union leaders were opposed to the recommendation for labour reforms.

However, the then Labour Minister Sahib Singh Verma, addressing a press conference on 18 October 2002, had said, “Social security cover to the workers in unorganised sector would be introduced in the Budget session, outdated laws would be scrapped and new progressive laws would be included in the new Act”. He said the umbrella legislation for the unorganised sector would also be tabled in the budget session of Parliament for the welfare of more than 350 million workers.

Government Pushes Forward

In haste, the Ministry of Labour called a two-day national seminar on ‘Unorganised Sector Labour: Social Protection, Skill Development and Legislative Interventions’ on 7-8 November 2002 with the objective of reaching a consensus on the proposed legislation. The seminar was attended by the representatives of trade unions, employers, state governments and central ministries, academicians, NGOs, ILO and social activists. The government announced that the introduction of the umbrella legislation was found feasible in the meeting considering the need for rationalisation, simplification and consolidation of labour laws. It was suggested that the legislation should provide for regulating the conditions of service of workers in the unorganised sector, particularly in terms of payment of minimum wages, hours of working and collective bargaining apart from ensuring minimum welfare provisions.

This was followed by a two-day Tripartite Committee Meeting held on 18-19 February 2003 at VV Giri National Labour Institute to discuss ‘Comprehensive Social Security, Skill Development and Training; Industrial Relations and Social Protection for Unorganised Sector Workers’. The 39th session of the Parliamentary Standing Committee on Labour held on 25 July 2003 decided that the report of the Second National Commission on Labour would be an item for the 39th session of ILC.

As meetings after meetings followed, the umbrella legislation draft also experienced metamorphosis and in the process, it was unrecognizably watered down. In the final avatar of the ‘Umbrella Legislation for Workers in the Unorganised Sector’ became a truncated social security scheme. On 22 February 2004, the NDA regime initiated a social security scheme in 50 cities on a pilot basis. But the electoral whirlwind did not give the NDA government a chance to test the scheme. “The scheme was not flawless. But something is better than nothing. We should continue with it and later restructure it,” observes Sahib Singh Verma, the former Labour Minister, who took the initiative in the pilot scheme. A same sense of lack of vision was reflected by the former Labour Secretary P D Shenoy, “There is nothing wrong in implementing the scheme. To start with, it can only be a scheme, later one can work on the lacunas,” he says.

The present UPA government clarifies that a draft Bill is under preparation. “We have not departed from the legislation. Some kind of draft will come up very soon,” states a top official in the Labour Ministry. Meanwhile, discussions and debates are happening among the trade unions – especially among the unions of the unorganised sector on the concept, content and form of the Unorganised Sector Workers Bill.

Response of the Central Trade Unions

On 14 June 2003, AICCTU, AITUC, BMS, CITU, HMS, TUCC and UTUC sent a joint letter to the Union Ministry of Labour suggesting amendments in the draft Bill. By and large, with the same suggestions INTUC also sent a separate bill to the labour ministry. After receiving a non-considerate reply to their demands (letter dated 29 September, 2003) from the Labour Ministry, the central trade unions reiterated their suggestions by sending another joint letter (on 21 October, 2004) to the Ministry. 

The main suggestions made by the central trade unions were:

v      There should be a separate Bill for the large and distinct segments such as agriculture workers. The separate Bills on employment conditions, welfare and social security aspects should be moved simultaneously along with this Bill

v      These Bills, including the Unorganised Sector Workers Bill, should provide for initial funds and regular defined contributions from the Centre and state governments

v      The entire cost of administration of the Act (s) be borne by the government at least for the first five years and the position could be reviewed and revised commitment worked out after this specific period

v      The minimum basic welfare and pensionary benefits to be included in the schemes should be incorporated in the Bill

v      Wherever the employer is not identifiable and/or the worker is compelled to change employment frequently, the contribution of the employer should be paid by the government/Board.

v      The Board(s) constituted under the Act should be a body having statutory powers to administer the various functions and schemes under the Act

v      The Board should have equal representatives of the government, workers and employers

v      The government should allocate funds for social security at an annual rate of three per cent of the Gross Domestic Product and it should progressively increase till a satisfactory level of social safety net is in place

v      Area of coverage and timeframe for commencement of the Act and authorities for implementation and enforcement should be specified.

Response of Unorganised Worker Trade Unions

The National Campaign Committee for Unorganised Sector Workers (NCC-USW) had initiated discussions and had submitted before the National Labour Commission its proposal regarding the contents of the Bill. To finalise the contents, the Committee conducted two seminars, one in Chennai in May 2001, and another in Delhi in August 2001 with the participation of representatives from ten states. The NCC-USW initiated nationwide discussions and debates in Chennai, Delhi and Mumbai with representatives of different categories of unorganised sector workers from various states and had sent their observations and comments to the government. The NCC-USW prepared three draft Bills before finalising it. The final version of the Bill along with a petition signed by lakhs of unorganised sector workers will be handed to the Lok Sabha Speaker on 5 May 2005 at the end of the rally from Ram Lila grounds to Parliament.

In 1998, when the Karnataka government initiated the task of drafting the Unorganised Sector Workers Bill, the National Centre for Labour, an apex body of independent trade unions working in the unorganised sector, had made several suggestions to improve the draft Bill. The National Centre for Labour had initiated workshops at the state-level and presented a draft model bill on the lines of the existing Tamil Nadu and Kerala models. Finally, the Bill was referred to a select committee by the state government. The National Centre for Labour prepared three draft Bills on the umbrella legislation for unorganised workers after holding consultations and discussions with various stakeholders. In January 2005, it held a meeting in Delhi and prepared the second draft of the Bill. The participants unanimously decided to form an expert committee to draft the Bill overcoming all the lacunae. The committee consisted of six members – T S Sankaran, D Geetha, D Thankappan, N P Samy, R K A Subramaniya and I Sharat Babu. Taking the Bill prepared by NCC-USW as the base and incorporating the suggestions of National Centre for Labour, the Committee drafted the Bill in a sitting in Chennai on 23-24 February 2005. This Bill was again taken up for discussion with a larger group in Delhi on 2–3 March 2005. In this two-day consultation, the Bill was finalised and was submitted to the Union Labour Minister Chandrasekhara Rao on 4 March 2005.

The Employment Guarantee Act and Umbrella Legislation for Workers in the Unorganised Sector are based on the Maharashtra government’s Employment Guarantee Act and the Mathadi Act respectively. One of the major demands of the National Campaign Committee for Rural Workers was to extend these two legislations to the whole of India. The National Campaign Committee for Rural workers is trying to bring together all unorganised sector trade unions and non-trade union organisations working with the unorganised and rural workers on one platform to demand these rights.                                                           

The contribution of the Self Employed Women’s Association (SEWA) in the drafting of the proposed Bill is manifold. In the six working groups that were set up, Renana Jhabvala of SEWA chaired the Women and Child Labour group.  Mirai Chatterjee and Nalini Nayak, active members of SEWA, were members of Social Security and Unorganised Labour working groups respectively. After the working groups submitted their reports, Ela Bhatt, the founder of SEWA, was asked to draft the Bill for the unorganised sector workers. In 2003, after a thorough study, SEWA drafted a Bill, invited the Labour Minister to its office in Ahmedabad and submitted the draft. SEWA gave its points of view also to the Group of Ministers headed by Home Minister L K Advani, constituted after there were differences of opinion in the Union Cabinet on the Bill. Though the group agreed with the suggestions of SEWA, the 2004 general elections overturned the entire process. In between, SEWA organised a sammelan and rally and submitted its final draft to the Labour Ministry. Meanwhile, the Madhya Pradesh government has formulated a Bill on the lines of that of SEWA for providing social security benefits for the workers in the state. The task force constituted to draft the Bill was headed by SEWA’s Renana Jhabvala. In July-August 2003, the Madhya Pradesh Assembly ratified the Bill and it has been sent to the central government for approval.

When the Second National Commission on Labour constituted the working groups, the working group on ‘Umbrella Legislation for Workers in the Unorganised Sector’ engaged Centre for Education and Communication (CEC), a New Delhi-based labour research and support organisation, as a consultant. CEC assisted the working group in drafting the report on unorganised sector workers and the draft Bill.

Why Still in Drafting Mode?

“In the beginning, the Bill was an election gimmick. Later, lack of political will and lack of vision became the major hindrance in finalising it,” says Surendra Mohan, a leading political activist and leader of the Hind Mazdoor Sabha. “The draft Bill prepared by the government was not acceptable to the trade unions. Trade unions came up with their amendments, which the government did not accept,” he adds.

“Employment guarantee for all with strict minimum wages for all. If this is clear, one should go ahead and enact the Bill,” says Swami Agnivesh of the Bandhua Mukti Morcha. “But many times, one gets stuck in the dichotomy of organised and unorganised workers. The organised sector is enjoying the benefits for many years. They should now come forward to protect the unorganised,” he adds. According to him, the first important thing is to get it implemented rather than making suggestions after suggestions and stopping it at the drafting stage.

Suneet Chopra of the All India Agricultural Workers Union believes that the central trade unions are more interested in the unorganised sector because more and more of the organised sector workers are becoming unorganised. For him, the idea of legislation is a welcome one provided the trade unions are taken into confidence in a much more serious way. “The responsibility should be passed on to a select committee and the Bill should be brought out in a definite time frame after which it should be tabled in Parliament,” he says. “When the UPA government came to power, the trade unions expected an improved version of the Bill to come,” says S N Thakur of AITUC. “But to our utter dismay, they came up with almost the same old draft which was prepared by the NDA government and circulated for comments. Naturally, the central trade unions reiterated their objections and suggestions, with the request for redrafting of the Bill. The redrafted Bill has not seen the light of the day.” “One of the major hindrances in the Bill not getting implemented is our expectation of making it perfect,” says R A Mittal of the Hind Mazdoor Sabha. One should really focus on the enactment of the Bill. The rest can be worked out later,” he adds. W R Varada Rajan of CITU considers the Bll as an “exercise in futility”. “The Bill should be aimed at employment regulation, it should provide for minimum wages taking into consideration the ILC norms and the Raptakos Bret judgement. Resources should be worked out with specific earmarking of funds,” he adds.

“It is painful to note the successive governments at the Centre in spite of clear constitutional mandate and their own common minimum programmes are lacking the political will to formulate this legislation,” says N P Samy of National Centre for Labour. “The employers’ powerful lobby and the State institutions are preventing the enactment of the legislation for the unorganised workers,” he adds.

According to Subhash Kalyanarao Lomte, national convener of the National Campaign Committee for Rural Workers, the major reasons for non-implementation of the Bill are lack of political will by the parties, the central government and the state governments and lack of unity among trade unions as well as other organisations working among the unorganised and rural workers. For Subhash Bhatnagar of NCC-USW, “legislation for unorganised workers is of little concern to the political class, officialdom and the employers”.

“There is a need for a movement and that too a sustained movement. Only then the Bill will be implemented,” says Baba Adhav of the Mathadi Workers Union. According to D Thankappan of the National Centre for Labour, there seems to be “a ploy to cheat the workers”. He says, “If we want to see the adoption of the Bill, we should take the campaign just like an independent movement to the nook and corner of the country.” P Chenniah of the Andhra Pradesh Vyavasaya Vruthidarula Union is of the strong belief that all parties should unanimously work to get the Bill enacted. “Once legislated, we can look at the lacunae and fight for it,” he adds.

“Based on the experiences in being associated with the drafting of the Unorganised Sector Workers Bill, I may tend to question the wisdom of having one comprehensive legislation for all unorganised sector workers. The diversity of the unorganised sector demands at least three different legislations—one for those workers who reflect a modicum of employer-employee relationship where employment regulation becomes an important component of legislation; second for those workers who are self-employed and home-based workers where social security itself become a key instrument of employment regulation, and third for the mass of agricultural workers,” says J John, Executive Director of CEC. He firmly believes that “unless and until  these basic differences are considered, a comprehensive legislation that accommodates both employment regulations and social security for all unorganised workers may remain a mirage.”

Present Status of the Bill

On 14 February 2005, the National Advisory Council on Labour organised a consultation in Shram Shakti Bhawan to discuss the Unorganised Sector Workers Bill. The meeting was chaired by the Union Labour Minister and attended by the Labour Secretary, members of the Council, officials of the ministries of labour and rural development, trade unions, NGOs, employers and Life Insurance Corporation officials. This meeting was a repetition of the previous meetings where a consensus could not be reached. Based on the suggestions of the Labour Secretary, a drafting committee was formed to revise the draft incorporating all suggestions received from various quarters. It was decided that the revised draft would be discussed in a two-day seminar for finalisation and it will be tabled during the monsoon session of Parliament. Now the Bill is with the drafting committee. We may witness another drafting committee, with many more to follow. Greek philosopher Aristotle said, “Law cannot be enacted in haste.” But in this case, the political sagacity of not implementing the Bill should be looked into. Here the question is not of haste but lack of will.