Labour unrest in modern times – UPSC GS3

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Context:
  • Workers at Wistron Corporation’s manufacturing facility near Bengaluru went on a rampage over non-payment of their wages.
Reasons for such Industrial Disputes in the recent past in India:
  1. Lapses in Labour practices: Such as non-payment of wages, providing bonus on time.
  2. Subcontracting to bypass labour laws:
    • Wilful violation of suppliers through supply chains and subcontracting without adhering to labour standards and protocols.
    • According to the Annual Survey of Industries (2017-18), contract workers accounted for 36.4 % of total production workers in the registered factory sector.
  3. No Grievance Redressal: Lack of an effective grievance redressal system in the manufacturing units has meant that the issues and concerns expressed by the working class have not been addressed or properly dealt with.
  4. Poor working conditions: Poor working conditions and harsh work environment take a toll on the workers’ physical and mental health.
 Impact of such Industrial Disputes
  1. Impacts FDI Prospects:
    • Investment climate gets vitiated with such disputes forcing the potential investors to look elsewhere.
    • The Kearney FDI Confidence Index does not feature India in the top 25.
    •  The Ease of doing business released by the World Bank has India at 63rd position.
  2. Increase trust deficit between employers and employees: leading to further unrest.
  3. Impacts Production: Impacts the production of goods and services in the economy leading to demand-supply mismatch and might lead to inflationary tendencies.
Measure taken by the government
  • Fixed-term employment (FTE): Introduced by the government in the Code on Industrial Relations (2020) as an alternative to contract workers. Its benefits include:
    • No role for a middleman in hiring.
    • Enjoy the benefits of a permanent worker: same work hours, wages, allowances and statutory benefits
    • For employers: Flexibility to adjust their workforce as per their requirements.
  • Production Lined Incentive Scheme (P.L.I.): The objective of the scheme is to create “good jobs”.
  • Under the Atmanirbhar Bharat Rozgar Yojana: the government is offering provident fund subsidies to employers for hiring new formal workers.
 Solutions
  1. Enforcement of Labour Laws: Enforcement of labour laws for employees’ benefit will make India an even more attractive and contrasting alternative to China where labour exploitation is widely prevalent.
  2. Code of Conduct: Industries to bring in ethical ‘code of conduct’ in tune with the welfare of workers and keep a strong monitoring system for the same.
  3. Tripartite dialogue: It may be a good time for the government to rekindle a tripartite dialogue mechanism with trade unions and employers like the erstwhile Indian Labour Conference, not held since 2015.
  4. Improve Grievances Redressal: Improve the avenues for workers to channelize their grievances.
Conclusion
  • With the country on the cusp of a new labour law regime being marketed as a business-friendly regimen, misgivings about their provisions or unresponsive systems for employees’ grievances can only foment more such unrest.
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