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Bamber CH 13 India Slides
Bamber CH 13 India Slides
INTERNATIONAL
& COMPARATIVE
EMPLOYMENT RELATIONS Globalisation and change
Edited by Greg J Bamber, Russell D Lansbury and Nick Wailes
CHAPTER 13
Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition . Lecturers using the book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.
Lecture outline
Key themes Context The actors Representation in Indian industrial relations Agreement making Economic context for reforms Current issues in employment Labour law reform Conclusions
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Key themes
Major economic reforms in the 1990s paved the way for high economic growth in India and involved the considerable liberalisation of the expansive labour laws. There is a large rural sector and a large informal sector in which unions and collective bargaining are rare. Trade union membership overall is low but membership and collective bargaining coverage is higher in the public sector and large enterprises. There are weak laws regarding trade union recognition and representation and poor enforcement of labour laws and collective agreement provisions. Current concerns include lack of protection for workers who have been made worse-off by the market-based labour reforms, poor growth prospects in key parts of the labour market, high rates of contract and casual workers, increasing downsizing and a low-value added IT sector.
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Context
The Indian industrial relations system is rooted in British common law. The IR system also reflects Indias diverse population. The unionisation rate is low at 5% of the total workforce due in part to large rural and informal sectors, which are not unionised. Most unions are concentrated in large enterprises and government-related sectors. After slow development during most of the 20th century, economic growth has been high since the mid-1990s. Indian labour laws were liberalised as part of a broader deregulation program in the 1990s, changing what was one of the most protective labour law regimes in the world.
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The trade union movement is closely linked with political parties, as historically unions played a major role in the struggle against colonial rule. Some leaders of the freedom struggle were also leaders of the trade union movement. Following independence, this association resulted in welfare-state and socialist policies involving the nationalisation of critical industries combined with investments in large-scale public enterprises. The close association between unions and political parties has assured politicians of votes from the working classes and enabled unions to better defend their members interests. But the association also creates problems: divisions in political parties lead to divisions in unions; industrial relations issues become political issues in conflicts between state and central governments of different persuasions; and recently, unions have also struggled with their associated political parties adopting neoliberal policies in order to encourage investment and competition as these policies tend to be detrimental for workers.
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Representation 1
Employers associations also represent interests of employers in various committees and institutions, bipartite and tripartite fora, and serve as a forum for information sharing, policy formulation and consensus building on strategic issues.
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Non-union firms
Representation 2
In contrast to the past, it has been increasingly common since the 1990s to find establishments with no union presence, for instance, in software companies and in several car manufacturers. Employers have adopted union-avoidance tactics such as the use of greenfield sites (which have high capital investment and technology and lower labour intensity), offering above-average wages and conditions, and asking employees to participate in anti-union activities
Collective bargaining
Only about 2% of the total workforce, but over 30% of the workers in the formal (organised) sector, participates in collective bargaining. In the public sector and the largest public and private sector enterprises the figure is 70% or more. Legislation encourages government adjudication of disputes.
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Representation 3
Historical context for industrial relations
At the time of independence, the British gave India a legal framework aimed primarily at dispute resolution. After independence, the Indian government adopted the Soviet model of planned economic development and sought to achieve a socialist society. Industrial harmony was considered a necessity for state-led development. Several industries were nationalised in the early 1970s, and, during the Emergency (1975-77), labour law changes restricted employers ability to sack workers and close operations that were no longer viable. Workers participation in management was adopted as a directive principle of state policy. Prior to the 1990s reforms, two national commissions on labour had recommended comprehensive reforms to labour laws.
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Representation 4
Freedom of Association
The constitution guarantees the fundamental right to freedom of association. The right of collective bargaining is not extended to industrial workers in government undertakings (e.g. railways, post, telecommunications). Compensation for these workers is based on recommendations of pay commissions appointed periodically by the government. National labour laws do not mandate employers to either recognise unions or engage in collective bargaining, but some states have provisions recognising trade unions. India has not ratified some ILO conventions concerning Right of Association.
Representation 5
An agreement with one trade union is not binding on members of other unions unless arrived at during conciliation proceedings. This means that even if one union has an agreement, other unions can raise an industrial dispute with an employer. A collective agreement is binding only for the workers who have negotiated and signed the agreement, but a written settlement arrived at in the course of conciliation proceedings is binding not only on the actual parties to the industrial dispute but also on the heirs, successors or assignees of the employer and all the present or future workers in the establishment. Under the Industrial Disputes Act, disputes can be settled with or without recourse to the government conciliation machinery. Arbitration or adjudication follows failed conciliation. An award can be an interim or final determination of an industrial dispute by a Labour Court, Industrial Tribunal, National Industrial Tribunal or an arbitrator. Awards are legally enforceable instruments. Collective bargaining is rare in the informal sector.
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Representation 6
Unfair labour practices
The Industrial Disputes Act defines the following as unfair labour practices:
refusal by the employer to bargain collectively in good faith with recognised trade unions, refusal by a union to bargain in good faith with the employer workers and trade unions engaging in coercive activities against certification of a bargaining representative
Breaching an industrial settlement is punishable under law. Employers use many tactics to undermine unions, actions which are illegal but go largely unprosecuted.
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Duration of agreements
Duration of collective agreements increased during the 1970s and 80s, and again in the 1990s in the public sector. Since 1997, the duration of public sector agreements has been ten years. Most private sector collective agreements typically last for three years. Public sector agreements can have a much longer duration.
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Conclusions
Labour policy in India has been too narrowly focused on the 7% of the labour force employed in the formal/organised sector. The challenge for the government is accommodating all workers and meeting the plurality of needs in the labour market. The government is faced with the paradox of having to moderate the at times excessive protection for workers in the formal sector (forming 7% of the labour force) while enhancing protection for workers in the informal sector (forming 93% of the labour force). Improvements to education and vocational skills training are needed. The labour administration and judiciary lack the professional skills and accountability to match their discretionary powers, so there is a need to build a cadre of professionals in these areas. Improvements to the dispute resolution system also sorely needed. Tripartite negotiations on devising policies which achieve flexibility and job security have stalled, and need to be restarted.
Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition . Lecturers using the book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.