Trade unions: can they still improve working conditions?

A postcard campaign initiated by the Montfort Social Institute (MSI) in partnership with the Working People’s Coalition, a national platform of more than 300 independent trade unions and workers’ organisations across India, was launched on 15 July in the southern state of Telangana calling for the expansion of Employees’ State Insurance (ESI) to all workers in the unorganised sector.

MSI director Montfort Brother Varghese Theckanath said that decent work is impossible without healthy workers and healthy workplaces, adding that the campaign’s effort to universalise ESI for all workers is based on the simple premise that no one is safe unless everyone is.

Credit iStock Chinnapong

According to a 2018 report by the International Labour Organization (ILO), nearly 81 per cent of all employed persons in India make a living by working in the informal sector, with only 6.5 per cent in the formal sector and 0.8 per cent in the household sector.

However, in India, the existing social security systems, labour codes and the central policies do not adequately cover the welfare, safety and the larger goal of social security for workers in the unorganised sector. “With the new labour codes yet to be enforced and the old ones repealed, the [unorganised] workers now are forced to work in a vacuum without regulation,” Brother Theckanath added, according to media reports.

Decline of trade unions
Many industry experts agree that the postcard campaign, which is run in response to an urgent need for affordable healthcare and social security for workers, is a rare initiative these days as trade unions, which were powerful through the 1960s and 1970s, have been in decline ever since the rules for businesses in India began to be liberalised. However, commentators add that, even today, campaigns of this nature give trade unions a chance to claw back some of the lost ground.

Although for most of the 20th century trade unions played a significant role in India’s public life, their public face, power and bargaining position is much lower these days.

While the unionisation of workplaces and workforces was a striking feature of the pre-liberalisation industrial market, the presence, size and role of unions has waned as the labour market has undergone a sea change in recent times. Experts say globalisation, technological changes and the consolidation of businesses into bigger organisations and corporate giants are among the key reasons why union power has been eroded and why the bargaining position of employers relative to workers has become much stronger.

That is unfortunate since BR Ambedkar, the founding father of the Constitution of India, and Subhash Chandra Bose, a major figure in India’s fight for independence from Britain, played a key role in organising industrial workers during the British Raj. That legacy ensured labour union leaders had a say in Indian politics in the first few decades after the country’s Independence.

Economic reforms ‘have weakened unions’
However, many commentators say that economic reforms in India have reduced the power and role of trade unions in negotiating higher wages and securing improved employment and social security benefits for workers.

“Since the start of economic reforms in 1991, India’s trade unions have found themselves increasingly excluded from the political process and marginalised in collective bargaining,” noted Vidu Badigannavar, a senior lecturer at Aston Business School.

According to Badigannavar, in the first wave of economic reforms, both membership of unions and the areas of the workforce they cover fell significantly, and the relationship between political parties and their affiliated unions came under severe stress.

Various policies introduced by a variety of governments in recent years have weakened the position of trade unions and led to the increased casualisation of employment. For example, there is a growing trend for workers to be hired on a casual or contract basis rather than as permanent employees, which makes it difficult for unions to attract and retain members and organise in workplaces to fight for workers’ employment rights and improved working conditions.

The policies include reducing the entry barriers for foreign investors, which has led to higher levels of foreign direct investment in various industrial sectors, privatisation of public sector jobs, public sector job losses, poor implementation of labour laws and the exclusion of certain workers, particularly those from the unorganised sector, from the scope of labour and welfare laws.

A variety of governments have insisted that many of these changes are vital economic reforms designed to boost the economy and levels of employment.

‘Unions have failed to keep up with employment changes’
Labour law commentators say that trade unions have also failed to keep up with the changing nature of work, especially the growth of the services sector, which now accounts for almost 50 per cent of India’s economy and over 40 per cent of its workforce. Critics say that unions have proved to be toothless in representing and fighting for the rights of workers in these growing sectors of the economy.

Another major factor affecting the ability of unions to organise and represent workers is the small-scale nature of the vast majority of Indian businesses. According to the most recent economic census – conducted in 2013-14 – 95 per cent of India’s economic establishments employ between one and five people. These low numbers have profound implications for trade union membership, activity and bargaining power, as unions have traditionally thrived where hundreds or thousands of workers can be mobilised against a big employer.

Commentators also say that the recent passing of four new labour codes by the central government also further threatens the ability of unions to organise, represent workers and take industrial action – such as strikes – to secure better pay and conditions for the workforce. The IndustriALL global union, which represents workers in the global mining, energy and manufacturing sectors, including members of affiliated unions in India, said: “The Industrial Relations Code completely undermines the right to freedom of association and collective bargaining.

“Strike action, which is an inherent part of freedom of association, will be deemed illegal as the conditions for a ‘legal strike’ will be harsh. Workers will now have to give two months’ notice for a strike as opposed to the current fourteen days.”

IndustriALL adds that once in force, the new codes will mean that employers with less than 300 workers in their factories will no longer need prior permission from the appropriate government authorities to make employees redundant or to close their factory or workplace. Previously, the threshold was 100 employees.

It also argues that under the new codes, the term ‘factory’ will exclude employers with less than 20 workers from any liabilities, and the introduction of a definition of ‘fixed term employment’ will further increase precarious work.

“The hard-won workers’ rights that were enshrined in the earlier labour laws have been undemocratically and unconstitutionally either diluted or deleted in the name of ‘ease of doing business’,” it said.

‘Labour codes will increase workers’ vulnerability’
Commenting on the codes when they were passed by the Indian Parliament in September 2020, IndustriALL said: “The changes increase workers’ vulnerability and facilitate corporate-friendly hire and fire policies without adequately protecting workers’ rights, promoting fixed-term and contract work without adequate social protection. Exercising the right to strike legally is virtually impossible. The new laws on social security is in many ways discriminatory, as it has removed welfare provisions for many informal sector workers.”

IndustriALL also claim that the introduction of the codes had ignored “the government’s own pre-legislative consultative guidelines, as there has not been adequate consultation with unions and workers in the informal sector, who are primarily affected by the changes”.

Speaking in 2020, Kemal Özkan, IndustriALL’s assistant general secretary, said: “We are dismayed over the lack of respect for the democratic process. India’s government need to engage in genuine dialogue with union representatives and ensure that labour laws incorporate internationally recognised human rights and fundamental principles, and rights at work.”

“Strikes are a very powerful weapon used by trade unions to strengthen their bargaining power and get their demands accepted,” said a union official from the Indian National Trade Union Congress (INTUC). “But, over time, the laws and processes have drastically diluted unions’ ability to go on strike.”

Commentators add that a slack labour market has also made it easier for employers to replace striking workers.

‘Workers’ rights have plummeted in the Asia Pacific region’

The 2023 Global Rights Index, drawn up by the International Trade Union Confederation (ITUC), warned that workers’ rights have consistently plummeted in the Asia Pacific region over the last decade, with governments passing various laws that undermine workers’ interests. Citing the example of India, the report says: “The Indian government’s new labour laws consolidate 44 labour laws into four codes. The new labour codes, which cover wage regulation, industrial relations, social security, occupational safety and health and working conditions, would deprive workers of their basic rights to go on strike, to form unions and to bargain with management.”

The report also says there are regular instances of violence, repression and arbitrary arrests of workers in countries like Bangladesh, India and Pakistan, as well as restrictions on the right to form trade unions. “Workers are under pressure as prices spiral and wages stagnate,” the report states. “Private companies disproportionately inflate prices, using global shocks as a smokescreen to obscure their greed for profits.” However, commentators says that when workers unite in collective action to call for higher wages and fairer redistribution of profits, their voices are often suppressed by the authorities.

For example, in India, around 70 workers employed by Viraj Steel were taken into custody, including the general secretary of the union, after the management filed a complaint with the police in order to suppress union activity in the factory.

The chemical, pharmaceutical and tyre manufacturing sectors in India are predicted to see huge growth in coming years, with the tyre sector alone expected to double its revenues by 2032.

However, commentators say that one of the drivers behind the growth of the chemical manufacturing industry is the availability of cheap labour. IndustriALL says that in order to attract capital investment, employers are paying low wages to workers and hiring more contract workers who have little or no job security and are not entitled to social security benefits. Unions also warn that mergers and acquisitions of companies by big businesses pose a significant challenge to the ability of unions to organise and retain members in workplaces.

Unions commit to work together
At a meeting of IndustriALL-affiliated Indian unions representing workers in the chemical, pharmaceutical and tyre sectors in July 2023, the unions committed to work together to organise workers in precarious employment, strengthen networks between different unions, demand equal pay for equal work, and demand the Indian government and employers do more to improve workplace health and safety.

The meeting heard how employers in the pharmaceutical and chemical sectors were undermining union power by reclassifying employees – such as sales promotion staff – as executives in order to remove them from the scope of trade unions and labour laws. IndustriALL warns that because India’s infrastructure costs for construction, materials and machinery are up to 70 per cent lower than other global chemicals manufacturing hubs, spending on safety infrastructure at new chemical manufacturing sites is also very poor, which is reflected in the high number of reported industrial incidents.

Tom Grinter, IndustriALL’s director of chemical, pharmaceutical and rubber sectors, said: “While India is growing as a major manufacturing hub of chemical, pharmaceutical as well as tyre, the situation of workers employed in factories is only becoming worse. We need to build stronger networks and greater solidarity to safeguard workers’ rights. Companies’ policies must be challenged to ensure workers get quality unionised jobs with better wages and working conditions.”

Roundtable demands safety improvements
India’s poor health and safety record prompted IndustriALL and a number of Indian unions to hold a roundtable in Delhi in summer 2022 where they demanded that government and businesses do more to protect workers in sectors such as manufacturing from work-related injury and ill health.

According to data collected by IndustriALL, in 2021 at least 429 accidents occurred in India’s manufacturing industries, including chemical and pharmaceuticals, mining and steel, in which more than 352 workers lost their lives and more than 700 others were injured. In the first half of 2022, at least 78 industrial and mine accidents were reported, resulting in the deaths of at least 199 workers and injuring more than 348.

The meeting was attended by officials from the Ministry of Labour and Employment, including the Chief Labour Commissioner of India, the Directorate General of Mines Safety, representatives of the public sector coal mining and steel manufacturing companies, and the Confederation of Indian Industry. At the meeting, the government officials and mining and steel industry representatives said they would work to meet the unions’ demands, which included releasing more information on industrial accidents and making it accessible to trade unions for scrutiny. However, IndustriALL and many Indian unions remain unconvinced that suitable action will be taken.

Kemal Özkan, IndustriALL’s assistant general secretary, who chaired the roundtable, said: “Self-certification under the new labour codes is going to majorly undermine workplace safety in India. We must not forget that workers are the real experts on the matter as they face the risks. Workers have the right to know workplace hazards, the right to refuse or shut unsafe work and the right to fully participate in decision-making and implementation of health and safety policies.

“Therefore, we demand that governments and employers must engage with unions as equal partners to better health and safety conditions at workplaces.”

India ‘breaching ILO labour standards’
Meanwhile, in June this year, unions stepped up their campaign for improvements in occupational health and safety and employment rights by writing a joint letter to the director general of the International Labour Organization (ILO), claiming that the four new labour codes are a clear violation of the ILO’s international labour standards.  

The letter argued that the new Occupational Safety, Health and Working Conditions Code contradicts the provisions of ILO Convention C081 on labour inspection, which India ratified in 1949. The C081 code says labour inspectors must be allowed to freely enter workplaces without notice and have the discretion to initiate legal proceedings without prior warning. However, the unions claim that under the forthcoming new OSH Code, the labour inspector will be “a facilitator that cannot initiate legal proceedings against an employer, but must instead give an opportunity to the employer to comply with safety provisions”.

However, while unions argue that their ability to represent workers and lobby for workers’ rights s being hampered by the combined trend of outsourcing of jobs that were previously held by employees who were union members to non-union workers, the informalisation of economy and the automation of jobs, some commentators feel unions can once again play a major role in improving working conditions and rights in India.

In his new book, A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries, renowned development economist Pranab Bardhan argues that trade unions – and the political parties and bodies that support and back them – can regain their role in public life in India. “Labour organisations should have a key role in shaping the future of automation so that firms deploy worker-empowering rather than worker-displacing innovations,” he writes.

“These outfits should help reshape corporate governance norms to give workers’ more voice in shaping a firm’s decisions. They must also have a voice in shaping trade negotiations and domestic anti-monopoly norms.”