WHAT WOULD BE THE HISTORICAL VALIDITY of a Commission on Labour, if national organizations of workers, abstained from collaborating with it during its  tenure and later rejected its report? This has been the fate of the Second National Commission on Labour,   constituted by the Government of India vide its resolution (No.Z-20014/8/98-Coord dated the 15 October 1999) with Ravindra Varma, a former Union Minister of Labour who received the ire of trade unions for his          controversial suggestions of labour reforms in 1977, as its Chairperson and two full time members N. Sanyal (Member-Secretary) and Dr. B R Sabade. The other members of the Commission were Sunil Shastri, Sudarshan Sarin, G Sanjeeva Reddy (INTUC), Jitendra Vir Gupta, Ela R Bhat (SEWA), Arvind R Doshi and Hasubai Dave (BMS), who was replaced by C K Saji Narayanan on 15 January 2001). While AITUC and CITU steadfastly refrained from associating with the Commission, HMS peripherally participated by acceding to be a member of the study group on ‘Skill Development, Training & Workers’ Education’, and UTUC confined itself to making a representation before the Commission in Kolkota.

The Commission itself has identified two reasons for their ‘non-cooperation’, the apprehension that the Terms of Reference reveal a tilt in favour of the demands and interests of one section and that the Commission might not be impartial and unprejudiced, but might act as an instrument of partisan interests (p3). Though this lame duck Commission did audaciously go ahead onto its task, it missed out pathologically on an alternative perspective on Indian labour, and thereby giving them the convenience of claiming the impartiality and tolerance of their final product. However, Indian workers have seen through this game plan and called its bluff. When the Second NCL finally submitted its voluminous report (1468 pages) on 19 June, 2002, except INTUC, all the other labour organisations, including the ‘Sangh Parivar’ trade unions, were quick to reject the report as a clear sell out of the interests of Indian labour. INTUC later showed a significant shift in its perspective, when it participated in a ‘March to Parliament’ organised in Delhi on 26 February , 2003 by all trade unions against the globalisation and liberalisation policies of the     government, including its ‘progromm’ on labour reforms.

Interestingly, the consummate critique has come from none other than BMS, the BJP supported and on official records the biggest trade union in India. Its representative in the Second NCL, C K Saji Narayanan, did not agree with the recommendations of the Commission and preferred to give a ‘Note of Dissent on Chapter on Review of Laws’ (pp 1451). Probably, from the perspective of labour, the report of the Second NCL will be remembered more for this forthright critique than for the ‘consensus’ recommendations emanating from the main text. Though at times Narayanan takes ideological posturing and slips into the genealogical disease of        ‘industrial family’, the dissenting note touches upon the major arguments of the Second NCL that compromise on the rights of workers.

The Commission was flawed from the very beginning. Unlike that of the First National Commission on Labour, the Terms of Reference for the Second NCL did not make any reference to the State’s constitutional commitment to its working population. Rather it was exclusively subjected to external determinants. This absence of a constitutional reference point has resulted in assuming the ‘context’ as unassailable and the Commission, by its deed, subjected Indian workers as passive victims of the emerging ideology of globalisation and liberalisation. The Second NCL had two mandates, first, ‘to suggest rationalisation of existing labour laws relating to labour in the organised sector’ and second, ‘to suggest umbrella legislation for ensuring a minimum level of protection to the workers in the unorganised sector’. Nevertheless, the Commission in its report has acknowledged the importance of the delineation of the context in their task, “We feel that the paragraphs of the Resolution that refer to the context of, and the reasons for the review, and the responses to the problems and the new situations that affect all the three ‘partners,’ give ample scope for a comprehensive survey and study of the field of enquiry” (pp8). The Resolution identified the context as, “the emerging economic environment involving rapid technological changes, requiring response in terms of change in methods, timings and conditions of work in industry, trade and services, globalisation of economy, liberalisation of trade and industry and emphasis on international competitiveness and the need for bringing the existing laws in tune with the future labour market needs and demands”. In the light of the above external environment, the resolution said, the Commission may take into account “the minimum level of labour protection and welfare measures and basic institutional framework for insuring the same, in the manner which is conducive to a flexible labour market and adjustments necessary for furthering technological change and economic growth”(Annexure pp3).

The loaded Terms of Reference has simplified the role of the Commission. The government wanted the Commission to give a rationale for the answers implied in the Terms of Reference – that for India to achieve competitiveness in the global market, labour market has to be flexible. This could be achieved by changing labour laws, which supposedly make the labour market rigid. This minimalist approach as necessitated by external environment has gone against constitutional principles and international precedents. The ILO has maintained that rationalisation of labour laws should not lead to erosion of existing rights. Before going into the specifics of how the recommendations of the Second NCL militate against the rights of workers, it would be important to highlight a stream of thought that runs through the report, and for all probability, might have influenced its findings and recommendations.

The Second National Labour Commission has perched itself on a high moral ground. It says, “Globalisation will not permit us to remain in a state of isolation and stagnation. Horizons have expanded. New paradigms have emerged. Old clichés and mindsets have lost their relevance. We cannot negotiate the rapids before us unless we revise the mindsets of the days of isolation and confrontation. Attitudes of confrontation must give place to an attitude of genuine partnership. Mechanistic views of industrial relations should yield that industry is an organic entity. Internal competition will only weaken our ability to increase the competitiveness that we need if we are to hold our own in the face of the new configurations of forces in the world which may adversely affect our progress. Organisations of workers as well as employers, and the State itself, should identify and create the conditions on which the harmonious relations that we need can be created and maintained. It is in this spirit that we have attempted to do justice to the task that has been entrusted to us” (pp36).

The Commission accepts globalisation and the ingrained competition as factors one should reckon with. Yet, the Commission is not willing to accept confrontation or competition within industry---in industrial relations. The Commission identifies confrontation as something to be eschewed and not to be reckoned with in order to be competitive globally. Hence, it advocates a harmonious relationship between workers and employers. Consequently, the Second NCL raises harmonious industrial relations as a truism and builds the edifice of the report on it. For workers, who face wage cut, delayed payment, non-payment of wages, denial of social security benefits, layoff, retrenchment, dismissal, intensification of work and denial of voice and representation, it is not difficult to discern on whose side the Commission is actually positioned.

Instead of engaging in dialogue with various perspectives, the high moral ground makes it easy for the Commission to sermonise and come up with easy solutions. An attendant outcome of this moralising approach is a self-conviction that the Commission could come up with a ‘consensus’ report, and that would be a ‘holistic alternative’. In his covering letter to the Prime Minister, the Chairman of the Commission says, “Our attempt has been to suggest a holistic alternative to what exists, not merely to suggest an amendment to one clause or another, because we feel that the massive demands that are being made on us cannot be met by tinkering at the periphery. What we need is a new outlook and a new system…”

What could it be - political naiveté or bloated ego - to claim that a National Commission on Labour could provide the system with a holistic alternative and that it could herald a new outlook and new system?

What did the Commission actually offer the nation by way of upholding the constitutional commitments to its working people?

The Commission reminds the working people of India that there is no alternative to globalisation, you have to accept it lock, stock and barrel. “Whether one is sanguine about the results of globalisation or suspicious and apprehensive, one has to accept the fact that we have travelled quite some distance along the road to full-scale globalisation” (pp291). What is worrisome is the fact that globalisations and the new economic policies are resulting in the closure or disappearance of many Indian companies. They are not competitive. “In a regime of competition, this means that every nation has to acquire and retain sufficient competitiveness to be able to survive and prosper in world markets. It has, therefore, become a national necessity to acquire competitiveness. Neither the interests of the poor and unemployed, nor the interests of the affluent can be served without competitiveness” (pp292).

But, what is the solution? From its high moralising attitude, it is not very difficult for the Commission to suggest a quick-fix, “The first requisite for the employers and employees today, therefore, is to develop a mindset that looks upon each other as partners, to develop a work culture that new technology and the context of globalisation demand” (pp293).

The Commission gets hooked on to the word, ‘work culture’ and uses it sometimes as a magic wand and at other times as a well tested philosophical concept to suggest changes in labour laws that make labour flexible. After mentioning that work culture is much more than the individual attitude of a worker, the Commission makes a grand generalisation of attitude of individual workers to suggest important policy changes. Quoting an anonymous trade union leader, the Commission arrives at the conclusion that organised sector workers including government and factory workers “actually spent on official work only at 4 or 5 (hours) a day” and vicariously calculates that the country is losing 108 million man days daily from the 27 million organised sector workers in India. After a few platitudes with regard to employers, the Commission comes back with its ‘blame it on workers’ attitude and makes a commonsensical observation that “there was a discernible difference between the level of application, consciousness, efficiency and innovativeness seen in the Indian workers working outside the country… and in the average Indian worker working in his own country”(pp298). It also observes that Indian workers are addicted to holidays and recommends reduction and restriction on holidays.

The Commission gives a philosophical justification for ‘shift of all employment to contractual work’ and ‘hire and fire policy’ as demanded by the employers. “If transforming the basis of all employment is a social necessity because it has become an economic necessity for industrial or commercial enterprises, then, it is equally necessary to create social acceptability for the change, and the social institutions that can take care of the consequences. So, two preconditions are to be focused upon: (1) social acceptance, and (2) socially acceptable arrangements for the period of transition during which one base is substituted by another base” (pp304). Considering the absence of such social acceptance and social arrangements in the country and also considering the possibility of social upheavals a sudden shift may pose, the Commission advocates, “there are weighty considerations that should temper the demand for an immediate switchover to the contract system and to unrestricted rights of hire and fire” (pp304).

These paragraphs also expose the Commission’s approach towards social security, which it does not consider as an entitlement of the worker, but a system that makes the transition towards flexible labour more bearable.

The substantive recommendations that the Second NCL has made with the objective of making labour flexible are the changes pertaining to labour laws.

First, it restricts, workers to whom the labour laws are applicable by introducing ‘salary limit’, denying it to supervisory personnel. The Commission justified this move by arguing that “labour Laws are essentially meant to protect the interests of the weaker party, and to provide a machinery for healthy industrial relations” (pp319). It essentially means that these groups of workers will be denied rights guaranteed under the Trade Union Act and the Industrial Disputes Act.

Second, the Commission proposes a Law on Labour Management Relations, incorporating and in place of all laws pertaining to industrial relations, in particular, the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946(pp365). Further, it recommends the repeal of the Sales Promotion Employees (Conditions of Service) Act, 1976 and other specific Acts governing industrial relations in particular trades or employments and also specific laws governing wage fixation in particular trades or employments.

Third, the Commission proposes to exclude all establishments employing less than 20 workers from the purview of Law on Labour Management Relations, for whom it proposes a watered down labour law, the Small Enterprises Employment Relations Act. Right to organise and collective Bargaining is conspicuously absent from the draft law prepared by the Commission. All disputes are to be settled through negotiations or through arbitration. This law also undermines the coverage of the proposed Umbrella Legislation for Workers in the Unorganised Sector by removing from its ambit all manufacturing and service establishments who employ wage labour between 1 and 19.

Fourth, the Commission proposes defining two terms, ‘wages’ and ‘remuneration’, the former to include only basic wages and dearness allowance and no other; all other payments including other allowances as well as overtime payment together with wages as defined above will be ‘remuneration’.

Fifth, the Second NCL seems to nurse a diabolical antipathy towards workers or workers’ organisations resorting to strike. It restricts the workers’ right, in practical terms, to organise strike through a series of steps: (a) Suggests that ‘go slow’ and ‘work to rule’ must be regarded as misconduct (b) Citing the increasing indignation and resistance that one sees in the counter-reaction of the majority that is subjected to vicarious suffering, the Second NCL recommends that when a dispute between employer and employee is “not settled through mutual negotiations, there may be a strike ballot as in other enterprises, and if the strike ballot shows that 51 (per cent) of workers are in favour of a strike, it should be taken that the strike has taken place, and the dispute must forthwith be referred to compulsory arbitration”. Moreover, both parties to the dispute will be bound by the award of the arbitrators(pp334).

Sixth, it proposes to undermine the right to organise and administer trade unions, freely and independently, under the Trade Union Act, 1926 in several ways: (a) Proposes a ceiling on ‘outsiders’ to be on the executive bodies of trade unions (b) Registration and recognition of unions have been suggested as an institutional mechanism to force unity of working class (the Commission suddenly becomes militant and advocates, “Fragmentation not only weakens the working class but also lets the adversary derive advantages from the divisions on the other side. Closing of ranks, therefore, is the need of the working class…”(pp339); (c) Strikes by unregistered unions should be treated as illegal and should attract the penalties of an illegal strike (d) The minimum support to be empanelled (for registration) may be prescribed as 25 per cent of workers in an establishment; (e) Proposes negotiating agent for bilateral negotiations and suggests check-off system as the means to determine negotiating agent in establishments of more than 300 workers.

Seventh, the Commission makes key changes in the Industrial Disputes Act, 1947 that gives employers the freedom to close, retrench, lay off, hire and fire at will: (a) When in matters of trade union rights, the Commission emphasises strict bilateralism, in matters of right of employers, it brazenly argues for State’s intervention(pp350); (b) Arguing that in the new circumstances of global competition, it may not be possible for some enterprises to continue and meet the economic consequences of competition, the Commission recommends allowing of closure with adequate compensation to workers (pp351), (c) Recommends that prior permission is not necessary in respect of layoff and retrenchment in an establishment of any employment size, with the provision of increased compensation; (d) Chapter VB of the ID Act, regarding permission, applicable only to establishment employing more than 300 workers (pp352).

Seventh, the Second NCL makes important changes in the Contract Labour (Regulation and Abolition) Act, 1970, arguing that “in the fast changing economic scenario and changes in technology and management, which are entailed in meeting current challenges, there cannot be a fixed number of posts in any organization for all time to come. Organizations must have the flexibility to adjust the number of their workforce based on economic efficiency”(pp364): Acceding to the distinction between core and non-core functions, the Commission recommends engagement of temporary workers even in core activities “for sporadic seasonal demand” and worker can be kept as contract labour for two years.

Eight, the Second NCL trivialises ‘wages’: (a) After speaking eloquently on the constitutional concept of living wages, the Commission arrives at the concept of ‘reasonable wages’ and explains it as “that kind of wage that will set the wheels of trade and industry moving, by putting in the hands of the worker the money that will enable him to purchase his/her bare needs and a little more”(pp366); (b) Enjoins that capacity of the establishment to pay should be considered for fixing minimum wages (c) Those who are engaged in relief work need not be given minimum wage (d) Only those who work for eight hours would be eligible for minimum wage; (e) Recommends scrapping of all wage boards.

These are some of the direct measures from the Second NCL to make labour flexible and industry competitive. The most glaring feature of the Commission’s report is that it locates rights of workers as function of the “competitiveness of the establishment”. It further reminds us that competitiveness of the establishment is synonymous with the progress of the nation. Therefore, in the national interest, a new work culture is called for, for us to remain competitive. A lot of sacrifices from workers and the relinquishing of their rights, and in return, the establishments will assure you workers, the bare minimum and little more.

These are the core of the Second NCL report; the rest of the suggestions are non-core and peripheral. The non-core components include the suggestions pertaining to Social Security, Umbrella Legislation for Workers in the Unorganised Sector, Occupational Health and Safety, Women and Child Welfare and Training & Skill Development. Heeding to the plea of the NCLII, we should approach the report in its totality, not parts in isolation. As we have already seen, Social Security in NCLII report, is not an entitlement of the workers and the responsibility of the State, but a prelude to our transition to perfect competitiveness and complete flexibility of employers to manage their establishments. In the same way, the Umbrella Legislation for Workers in the Unorganised Sector is an alibi, a political ploy to hoodwink the workers into false security.

Beyond these, the report of the Second NCL manifests chronic incoherence among various chapters and some of issues that fall within the mandate of the Commission have been addressed in a cavalier manner. Similarly no serious effort seems to have been taken to integrate reports of various study groups into a comprehensive whole. To give a few examples, an important area of occupational health and safety has been addressed within ‘labour administration’. The polemic on social security in the social security chapter goes unsynchronised with the discussion of the topic in the chapter on unorganised sector.