Search the Internet          Tips  Sites: Finance, Investment

Unions, BJP allies ganging up against labour reforms

Deepshikha Ghosh in New Delhi

Sections of India's ruling coalition and trade unions cutting across party lines are teaming up to battle the government's proposed labour reforms that would make it easy for employers to hire and fire at will.

The government had in its budget this year proposed amendments in labour laws keeping in mind the changes in the economy that would make it easy for companies to retrench staff and hire contract labour.

But Prime Minister Atal Bihari Vajpayee's multi-party coalition has been finding it difficult to implement the promised reforms because of intense opposition from both within and outside.

Former defence minister George Fernandes, who is also the convenor of Vajpayee's National Democratic Alliance, stunned everyone last week by publicly lashing out at the proposed steps.

The country's main trade unions, including the Bharatiya Mazdoor Sangh, which has links with Vajpayee's Bharatiya Janata Party, the Congress-led Indian National Trade Union Congress and Communist-controlled All India Trade Union Congress and the Centre for Indian Trade Unions have stepped up anti-government protests across the country.

The BMS, which had earlier said it would never 'strike' against the government, has evidently hardened its stance.

"Even without a hire and fire policy, the government has been unable to tackle the growing unemployment among the educated," BMS general secretary Hasmukhbhai Dave said.

"What can labour reforms achieve?" He accused the government of yielding to pressures from WTO and the US.

The government seeks to amend the Industrial Disputes Act to allow industrial units with up to 1,000 employees to retrench workers, and downsize or shut down business establishments without government permission.

About 90 per cent of the units in the Indian organised sector operate with a work force of less than 1,000, according to estimates.

Reforms in the contract labour legislation propose to do away with a clause whereby employers are forced to provide permanent jobs to employees.

This, officials say, would give Indian industry a fighting chance to compete with countries of comparable economic status such as China, where job security is a rarity and wages are low.

Dave said: "We may belong to the same ideology as the BJP, but we have to oppose what is wrong." He said the BMS union had the backing of the Rashtriya Swayamsevak Sangh, India's most influential Hindu group allied to both the BMS and BJP.

According to him, several economic reports had recommended against introducing labour reforms without resolving the problem of unemployment.

He also cited a report by the Reserve Bank of India to say that state-owned companies were performing badly mainly due to poor management and not due to the fault of the workforce.

"We think a consensus is required, and we should be called upon to participate in decision making of companies as well," Dave said.

But the anger of the trade unions has made no impact on business groupings.

Amit Mitra, secretary-general of the Federation of Indian Chambers of Commerce and Industry, said labour reforms were a must to give a thrust to Indian economy.

"Reforms are necessary at this juncture, as it is holding back private investment. But the labour policy should be backed by sufficient social security measures," a FICCI official said.

Indo-Asian News Service

Money
Business News

Tell us what you think of this report