Strike it out

Jinoy Jose P | Updated on July 21, 2014 Published on July 21, 2014

The best way to tackle workers’ dissent is to end informal work

The strike at food products giant Britannia Industries’ Delhi factory, like many similar agitations, raises questions on the sweeping contractualisation of jobs India has seen in the past two decades. Of the 900 workers at this factory, only 150 are on regular rolls; the rest have been on strike demanding regularisation of employment and a wage raise. Britannia, which controls over 30 per cent of the food products market in India, has declared the strike illegal and is trying to shift production to other units to save a possible supply crunch.

The union at strike says their demands are only judicious. Arguments of both parties sound familiar.

In fact, this strike follows a similar agitation by more than a thousand workers at 23 hot roller plants in Delhi’s Wazirpur industrial area. The workers were demanding, among other things, minimum wages and job security. After stalling work for 22 days, the workers — mostly migrants — called off their strike on June 29 when they entered an agreement with factory owners at the Deputy Labour Commissioner’s office. For a change, there was a solution to the crisis.

More such strikes are in store as the key cause of the problem remains unsolved — informalisation of work. In the past two decades, every sector has built alarmingly huge armies of informal workers.

Take manufacturing. Economists Jayati Ghosh and CP Chandrasekhar have noted that the share of contract workers in Indian manufacturing has grown steeply and steady between 1990 and 2010 — from almost 15 per cent to nearly 35 per cent of the work force in registered manufacturing. Labour watchdog ILO has called for better treatment of contract workers, especially in emerging economies.

There are obvious reasons why companies want to hire workers on flexible contracts. But the gains to be had from cost-cutting owing to contract labour are mostly short-term in nature. That such a strategy is counter-productive can be seen from the number of strikes demanding better pay, job security and other benefits, notably in Maruti Suzuki’s Manesar plant in Haryana a year ago.

Whether companies like it or not, the solution is to end the informal nature of employment. Better pay, job security, safe work environments and social security benefits will only help workers bring out their best. In fact, companies making high-specification products realise that contract labour can lead to batch rejections. In other words, formal labour arrangments help enhance the quality of products. That’s the labour reform we need.

Assistant Editor

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Published on July 21, 2014
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