We have seen the public notice dated 13th January 2020 calling for suggestions and objections on the draft Bill on the Code for Industrial Relations 2019 (No. 364 Of 2019). In this regard we would like to state as under:

Firstly, there is an established practise in India of making new laws based on tripartite consultation. Most labour acts have been enacted on the basis of direct tripartite consultation or on the basis of reports of committees which have heard both managements and workers representatives (like the Bonus commission or the First Labour Commission). Though there is a brief mention in the report of the Second Labour Commission about the consolidation of laws into fewer codes, there has clearly been no consultation with the representatives of workers when drafting the codes. That this Government does not believe in consulting with representatives of labour is borne out by the fact that there has been no ILC (Indian Labour Conference) since 2015. It used to be an annual feature heretofore. We have learned that even the State Governments were not consulted when making the drafts of the proposed labour codes. This shows that the drafts are unilateral and based only on the

In this regard one may also ILO convention 144 which India has signed and ratified. The purposes for which tripartite consultation procedures are required have been spelled out in Article 5 of that convention. These purposes are wide enough to cover the changes sought to be made. For instance, the introduction of “negotiating unions” and “negotiating councils” sought to be made are clearly towards appropriate implementation of convention 87 and 98 which have neither been signed nor ratified by India. Such changes clearly require tripartite consultation.

Secondly, the very idea of “consolidation” is an exercise in futility. Laws come into being not as a result of somebody’s abstract thinking but as a measure to cure perceived problems. Different laws, to tackle different problems will have to have different definitions. An abstract intellectual exercise to make common definitions is bound to lead to problems. For instance, the way in which “employee” has been differentiated in this act from “worker” will lead to the unwanted consequence that only “workers” have the right to form trade unions and not “employees” as was before.

Further, under cover of “consolidation” of laws, many retrograde concepts which have been sought by managements have been sought to be introduced. “Fixed Term contracts” for employment are sought to be introduced. Definitions of “worker”, “employee”, “employer”, “contractor”, “industry”, “settlement”, “wage” etc, which are the very bedrock of industrial jurisprudence, are sought to be changed in favour of employers. This will clearly be against the working class and is in direct opposition to the mandate of articles 38, 39, 41, 42 and 43 of the Constitution of India.

In this context one has to keep in mind that all labour law is in the nature of an extreme form of welfare legislation. It is not based on the law of contract but rather on the principal of “contracting out”. Hitherto labour law has recognised that contracts between employers and individual employees are not fair and are unconscionable. This is because the worker in the constant threat of unemployment can never bargain at an equal level with the employer and especially not with large corporations which have huge resources. If they were left to their own devices, workers would be badly exploited. Hence all labour laws are postulated on the premise that only collective contracts are binding and the law will prevail inspite of individual contracts. The present draft seeks to create the myth that workers and employers can contract at a fair level by introducing new definitions like proposed for “fixed term” employment and “settlement”.

Lastly, the draft is ill thought out and ill drafted. For instance, as shown below, the definitions will lead to unwanted consequences. The new definition of “wage” will lead to reduction in retrenchment compensation. The new definition of “employer” will lead to an ambiguity as to who is he employer. At least some of these are clearly the result of not having thought out the consequences though many may be results desired by this government to favour the managements.

For all the above reasons we reject the new draft outright and call for it to be scrapped altogether. To elaborate some of our points we are setting out our comments on this draft in more detail. Also annexed is a Schedule which shows the actual changes and our comments on the same which is self explanatory.

One of the most insidious changes sought to be made is the institutionalisation of “fixed term contracts” as a tenure of employment. Earlier, labour law had recognised only five tenures – permanent, temporary, casual, badli and probationer. All were well defined. In 1984, for the first time, the seed of the concept of “fixed term” was introduced by the introduction of section 2(oo)(bb) in the Industrial Disputes Act 1947 which removed the termination of the employment of such “fixed term” employees from the definition of “retrenchment”. However, this was only a partial change in so far as “retrenchment” was concerned. “Fixed term” was not made into a tenure of service. However, now it is sought to be made into such. This has already been done by the Industrial Employment (Standing Orders) Amendment (Rules) 2018, with effect from March 2018. Now, with the present proposed code it is sought to be made a part of the Act itself. As is well known, workers, under threat of unemployment are forced to enter into contracts for a “fixed term”. It was recognising such a mischief as undesirable that the Government of Maharashtra had introduced changes in standing orders requiring that all workers who had worked for 240 days of continuous service, must be made permanent even though they may have tenures as “casual” or “temporary” or “badli”. The present step is clearly a retrograde step. It will go against the mandate, inter alia, of article 39 and 41 of the Constitution of India.

The changes in the definition of “employer”, “employee” and “worker” taken together are confusing, self-contradictory and unworkable. “Employer” includes “contractor” but “contractor” is not defined for this draft. If we proceed on the footing that “contractor” is the same as defined in the code on social security, then the consequences are even more dangerous. There the definition of “contractor” has been changed from what is accepted today to include even a clearly “sham and bogus” contractor. Thus the concept of “employer” will have been divorced from the concept of “master and servant” which is the basis of much of labour jurisprudence. Again this change forgets the basis of labour law being to protect workers. It allows sham and bogus contractors to be employers forgetting that workers are forced to accept employment in such form though they are actually workers of the principal employers.

Further, the changes to the definitions of “employee”, “employer” and “worker” lead to the consequence that the contract worker is also the worker of the principal employer and the contractor. Hence who is the “employer” is ill defined. It will not be possible for such workers to pinpoint the responsibility of “employer” on any one person. Even the definition of “employer” is internally self-contradictory. The employer may be the person who employs or the person who has ultimate control of the affairs which may not be the same juristic person. The person employing may be a body corporate such as a company whereas the occupier of the factory may be a particular manager. This will lead to confusion as to who is to be responsibe for implementation of the provisions of the act and what if they act in opposition. For instance, what if the body corporate wants to retrench but the occupier does not follow the procedure? Who is to be held to account is unclear.

The change in the definition of “worker” leaves out apprentices who were earlier explicitly included. It is true that the Apprentices Act of 1960 held that apprentices are not workers. However, the workers have long demanded that this should be changed and they should be included in the definition of workers. On the contrary, the Government now sees fit to change the definition of worker to exclude apprentices. This is clearly not going to foster “equal pay for equal work” or other similar principles in the Directive Principles of State Policy. They leave workers open to exploitation under the guise of apprenticeship.

The definition of “settlement” includes individual settlements. This is clearly against the very concept of collective bargaining. At least here, the ILO convention on tripartite consultation is binding. Further, the change unsettles the very basis of collective bargaining that individual settlements are unfair and unconscionable. Far from being based on the concept of “contracting out”, it makes a mockery of the concept of contracting out.

The definition of industry has been the subject of much industry by the judges of the Supreme Court as testified by the judgements in the case of Safdarjung Hospital, Madras Gymkhana Club etc leading finally to the judgement of 7 judges in the case of Bangalore Water Works. The present definition seeks to undo not just the judgements but the jurisprudence behind the judgements. It is submitted that this jurisprudence was in keeping with Articles 38, 39 and 41 to 43 of the Constitution. However, now this is sought to be undone. This is clearly objectionable. Further, concepts such as “charitable”, “philanthropic”, “social”, etc are undefined and will lead to confusion. A manufacturer of sanitary pads or toilet paper may well claim to be a social activity and therefore not an industry. As far as “sovereign function” goes, the Indian Constitution is unique in so far it specifically allows the state to make laws to carry on any trade, business, industry or service under Article 19 (6) (ii). As such, when the state is specifically allowed to carry on an industry, it would not be fair to deprive the employees of that industry the protection of labour laws. Further as the first Law Commission has noted, the difference between sovereign function and non-sovereign function no longer exists. In the case of Shyam Sundar v State of Rajasthan the Hon’ble Supreme Court held as far back as in 1974 that famine relief is also not a sovereign function as private parties also do it. The courts has well recognised the question of sovereign function without this definition. As such it is unnecessary and confusing.

The change in the definition of “wage” is also clearly either badly thought out or made with malicious intent. This will have the effect of reducing retrenchment compensation, subsistence allowance etc. This is unacceptable. Further, if the employee is paid part of his wage in kind, then only 15% of such wage is to be reckoned as paid in kind. There is no justification for this and it is not workable. It is not clear as to 15% of what amount is to be calculated.

The provision for a Grievance Redressal Committee is also objected to. An individual worker has been given the right to raise a dispute concerning terms of employment and conditions of service but whose terms of employment or conditions of service is not specified. Firstly such a dispute would not be an industrial dispute, however, such worker will have the right to enter such dispute into conciliation after 30 days. No provision has been made to enforce the decision of this committee. The decision is not even made binding on the employer. Further, if it is meant that an individual worker can raise a dispute on terms of employment and conditions of service, this would go against the very concept of collective bargaining which the law has so far stood by. The moot question here is also how the representatives of workers are to be chosen. This will have to wait for the rules for our comments. Further, no provision has been made for a Vishakha Committee as directed by the Supreme Court.

The provisions of the proposed section 27 are clearly unconstitutional as no guideline has been provided as to which union has to be recognised.

As regards the provisions for Standing Orders under Chapter IV, it is alarming that the employer is permitted to make standing orders even on matters other than those in the schedule prescribed. There is no provision for displaying the standing orders in the establishment in the language understood by the majority of the workers. As regards standing orders, the workers of Maharashtra have gained such provisions by state amendments as were considered necessary to stop the evil of continuing workers as casual, badli, temporary for years. These have been held by the Hon’ble Supreme Court to be inamenable to change. The draft does not make clear what is to become of such state amendments.

As regards notice of change, clause (c) to the proviso to Section 40 states tht the employer may be exempted from giving notice of change in emergent situations “in consultation” with the Grievance Redressal Committee. This is unclear. It must be “in accordance with the decision of the Grievance Redressal Committee taken as per provisions of sub-section (7) of Section 4”. Otherwise “consultation” is reduced to mere window dressing.

The limitation of three years for an industrial dispute is clearly unreal. In many cases, poor workers are not even able to unionise so as to know their rights. In our country with over 50% being illiterate and with law books other than English being so unavailable, such a provision is only  way of defeating the legitimate rights of workers. Even otherwise industrial relations are always fluid. Workers may not raise a certain dispute in certain circumstances like some of them not being made permanent or not getting minimum wages. Once they attain permanency and minimum wages, they may want to raise such a dispute. Stopping this would be clearly unfair and unjust. In many cases of sham and bogus contracts or of enforced casualness, workers have only organised and attained their rights after several years or even decades. 

The provisions relating to strike are clearly as good as prohibiting strikes in all establishments, not just in public utilities as before. This is taking away the right to strike altogether.

The limitation of section 72 of “one year” in place of the earlier section 25H is clearly giving the employers a method of bypassing the law. Similarly the exemption of establishments where less than 50 workers  were employed on any day in the preceding 12 months from the provisions of Section 74 (corresponding to section 25FFA of the I. D. Act) are clearly again giving concessions to employers.

Section 90 of the proposed code (corresponding to section 33 (1) of the Industrial Disputes Act, 1947) gives further concession to the employers that if a dispute is pending, they may make a change with regard to any matter connected with the dispute or may discharge or dismiss any worker for any misconduct connected with the dispute by giving notice of change under section 40. (Corresponding to section 9A of the ID Act). This will render the protection against arbitrary change totally toothless. The original idea was that there should be total protection against an arbitrary change which could only be made by settlement or award. Now the manager is literally left free to make any change he desires and it is left to the workers to challenge it in court and bear it till the outcome of the court.

It is pertinent to note that all the changes proposed are in favour of managements. We cannot see a single change in the proposed code which can be unequivocally be declared to be in favour of the workers or employers. This itself is clearly in violation of the directive principles of the Constitution mentioned above.

We specifically state that what is stated above is not exhaustive and we wish to be heard personally. We request you to call us for a personal hearing.

(Above comments on bill on Code of Industrial Relation was prepared by comrade Sanjay Singhvi, GS of TUCI. The ad came on 13th Jan. In some ads it was to be given in 15 days or in 30 days hence confusion. This draft has also been adopted by AITUC, CITU, BKS and other from Maharashtra.) n

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