Date: 02/05/2023

Relevance: GS-3: Effects of Liberalization on the Economy, Ease of Doing Business, Labour Reforms.

Key Phrases: International Labour Day, LPG Reforms, International Labour Union, Industrial Policy 2022, Institutional Setup, Regulatory Framework, Policy stability, Ease of Doing Business, Ease of Living Index, Developing Nations and Advanced Economies, Capital, and Labour.

Context:

• International Labour Day (also known as May Day) is celebrated every year on 1 May to commemorate the struggles and sacrifices of the workers' and laborers' movement.
  • In 1889, the International Congress of socialist parties met in Paris and decided to celebrate Labour Day or Worker's Day on May 1.
• Recently, the Tamil Nadu and Karnataka governments also increased the number of working hours a day.
  • Following opposition, the Tamil Nadu government put a hold on the amendment to the Factories Act on work hours.

Key Highlights:

• In 1919, the International Labour Organization adopted the Hours of Work (Industry) Convention, which limited the number of working hours to eight a day and 48 hours a week.
  • British India ratified the Convention on July 14, 1921.
  • In the subsequent decades, the working class in various countries held several agitations to secure the right to an eight-hour working day.

Regulating working hours:

• The theory of economic development anticipated that due largely to technological inventions and innovations, and with economic prosperity, people will have more leisure time to engage in sociocultural activities and that social welfare will improve.
  • However, the itch to regulate or rather increase the number of working hours continues to persist.
  • When COVID-19 hit India, several States amended the Factories Act, 1948, using the ordinance route.
• Tamil Nadu and Karnataka governments increased the number of working hours a day.

Rationale behind the increment of Working Hour:

• Employers, especially in the garment and electronic industries, have clamoured for a flexible work time regime so that they can manage export orders.
• In India, mainstream economists give the green signal to any initiative as long as it increases exports, even if it is at the cost of labour rights and human rights.
  • They recommend emulating countries like Bangladesh (for garments) and Vietnam (for electronics).
  • In 2022, according to the Global Right Index, launched by the International Trade Union Confederation (ITUC), Bangladesh ranked among the 10 worst countries where labour rights are not guaranteed.
  • On a scale of 1 (best) to 5+ (worst) on the degree of respect for workers’ rights, the ITUC rated Vietnam 4, which indicates systematic violation of labour rights.
  • Therefore, the comparator countries that neoliberals refer to are known for their poor record of labour rights.
• Under the pretext of ‘ease of doing business’, regional governments offer many subsidies and exemptions to attract global and domestic capital.
  • Apart from quantitative subsidies, these global companies press for qualitative subsidies.
  • Employers prefer no unions or weak ones in an industrially peaceful context where cheap and skilled workers are available.
  • While India bears the cost of skilling the workers, multinational corporations reap the benefits.
  • This low road to development employed by most capitalistic companies leads to a race to the bottom.
• One State after another amending labour laws despite the fact that these companies do not help significantly reduce unemployment rates; they mostly provide high-skilled jobs, which leads to jobless growth.
• The typical demand is to increase the number of hours of work a day while adhering to the eight-hour-day rule.
  • For instance, Karnataka has increased the number of working hours a day, including rest periods, to 12, while complying with the weekly threshold of 48 hours.
  • The system is also moving from the three shifts regime to the two shifts regime.

Economic Rationale:

• The worker spends about nine hours in the factory.
  • The companies believe they can enhance production by maximizing the workers’ time at the factory.
  • This would help them cut traveling allowance and transaction costs.
• As far as the workers are concerned, they are likely to be away from home for at least 14 hours since some of them spend two hours traveling to work.
  • On four successive days, workers may work for 12 hours and travel for two hours each day, which is daunting, even for younger workers.
• Eventually there is bound to be diminishing marginal productivity and employers may not benefit.
  • As workers age, they become less efficient, highly fatigued and prone to industrial accidents.

Way Forward:

• By extending the hours of work and ensuring job insecurity, we are setting the clock back to the 19th century in the name of ease of doing business.
• Due to lack of political unity as well as trade union cooperation, States are able to change labour laws without much opposition.
• Companies employ Human Resources professionals who preach about a work-life balance, but don’t say anything when workers are treated shabbily.
• The values of justice and equity which are the cornerstones of our Constitution should determine the rule of law as it applies to business.
  • That will ensure an environment of vishwas and invoke the animal spirits needed for a high-octane growth.
• There are three key stakeholders, whose interest needs to converge: governments, capital, and labour.
  • Each of these stakeholders have their own interests which might not necessarily align with the goals of economic performance.
  • This is where the governments, at multiple levels, need to assume the responsibility of coordinating and disciplining the stakeholders and achieve the necessary synergy so that the goals of industrial policy and Labour right protection can be achieved.
• The delay in the implementation of the new labour codes is hardly a concern for the Union government.
  • Trade unions have a lot to be concerned about this May Day.

Conclusion:

• Labour Day is celebrated around the world to raise awareness of the rights of working people and to protect them from exploitation.
  • It also serves as a reminder of the important role played by the working class in our society.

Source: The Hindu

Mains Question:

Q. Recently, Tamil Nadu and Karnataka governments increased the number of working hours a day. In the light of these amendment, analyze the impact of increased working hour on the labour productivity and labour rights. (150 Words).