The Hindu Business Line : A laboured view

IT IS DIFFICULT to agree with the views of sections of trade unions that the new securitisation law is anti-labour inasmuch as it provides for abatement of proceedings before the Board for Industrial and Financial Reconstruction should a significant majority of creditors agree. The notion that the BIFR protects jobs, as a sick unit cannot be officially declared closed till the authority pronounces its verdict on its viability, is fine on paper. But in substantive terms this means nothing as sick units are for all practical purposes shut down as workers go without wages. It is cold comfort for some one struggling to make ends meet that he is still on the rolls of the undertaking. And the wait can be inordinately long. The harsh reality is that the BIFR's decisions on revival are often so long in coming that the logic of its decision may well be overtaken by events triggering in the process serious doubts about its efficacy. Even today the agency has over 1,500 cases before it, which at the present rate of disposal could take anything up to five years to clear.

To be fair to the BIFR, it cannot really compel creditors or other stakeholders of a unit to agree to the kind of sacrifice that a revival may extract. To compound matters, there is no finality to its decisions. Anybody affected by its order can appeal to the appellate authority and thereafter to the High Courts and the Supreme Court rendering the BIFR decision virtually an academic exercise. But that apart, the enthusiasm of the trade unions for the BIFR mechanism is a bit hard to understand as they themselves have been in the forefront of critics of its functioning. At recent national-level labour conferences, they have quite vocally criticised the functioning of the BIFR. In the event, it must be said that their faith in the efficacy of the BIFR mechanism to revive sick units appears wholly misplaced. The unions would do well to remember that financial institutions have no particular interest in the closure of sick units. If anything, they realise that their interests would be best served in selling the units on a `slump' basis as a going concern so that the unit has a chance of being revived. True, there may be job losses as the new owners set about restructuring the business. But that is better than keeping a sick unit in suspended animation for long.

The unions confront a far more serious situation on the labour front. The dynamics of employer-employee relationship in the organised sector has undergone a fundamental change with the management gaining an upper hand because of a combination of factors. This becomes clear from the fact that statistics on the mandays lost due to strikes (an employee initiated industrial action) are a tenth of those lost due to lockouts (a management prerogative). The unions should focus on what kind of social safety net can be put in place to respond to aggressive industrial action by management of healthy units rather than worry about securing a continuing role for the BIFR.

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