Safeguarding labourers during Covid-19

Rahul Suresh Sapkal | Updated on May 07, 2020

The vague legal definition of ‘worker’ sabotages inclusive and eligible delivery of welfare to all workers during the pandemic

The Covid-19 health emergency has disrupted trade, mobility and livelihood in unimaginable ways. The magnitude of the crisis grows manifold when social and economic shutdowns accompany it, and the uncertainties of livelihood, wage loss and lay-offs might last longer than expected as Covid-19 has hit almost all sectors. To reduce the impact, a soft-law approach has been executed, requiring all employers/establishments to stay away from introducing wage cuts and job cuts for contract or temporary workers.

This advisory may provide partial relief for workers in the organised sector, but not for workers in the informal sector, who are forced into economic and social deprivation. The legal basis of this circular is contested as it externalises the cost of wages/salaries on the employers. Fixing accountability on employers for wages and jobs might provide interim relief, but some crucial concerns arise here in terms of the legality of the advisory.

Section 2(s) of the Industrial Disputes Act (the ID Act) has a restrictive definition of a worker: any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work, for hire or reward. This definition does not recognise every person in a relationship of employment due to terms such as ‘manual’, ‘unskilled’, ‘skilled’, ‘technical’, ‘operational’ or ‘clerical’ which are vague and subject to multiple interpretations by the judiciary. Hence, while interpreting the term “workman”, various judgments excluded numerous categories of workers.

This has resulted in the emergence of the non-worker category of employment — informal workers such as teachers, artists, medical representatives, trainees, professionals, own-account workers, platform workers, and so on. According to the Periodic Labour Force Surveys (PLFS, 2017-18), 238 million people work as self-employed and around 112 million are employed in the casual labour segment. Only 19 million regular wage workers with a contract tenure of more than three years are defined as workers in the formal sector.

It further excludes 49 million of the 92 million formal sector workers who work in the informal segment of the formal sector. This segment of non-worker, close to 161 million, as construed in various judicial pronouncements are ineligible under the definitional criteria of the ID Act. The lack of consistency and consequent confusion has turned out to be the Achilles’ heel for the circular. So, there is a need to recognise non-workers to make sure they have access to legal wage entitlements after the lockdown.

Missing employers, industrial units

Like non-workers, millions of units are also excluded from the purview of the ID Act. According to the Sixth Economic Census 2015-16, 24.63 million establishments employ 216 million workers. Of that, 97.39 million (45 per cent) work without hired workers (own establishment); 118 million (55 per cent) work in establishments with at least one hired worker. Broadly, the former category falls under the Shops and Establishment Act and, latter, the Factories Act.

More than 200 million (93 per cent) people work in establishments that are perennial, while the remaining 15.6 million (7 per cent) are employed in establishments with non-perennial (seasonal and casual) operations. Across the employment threshold size, 172 million of workers (79.85 per cent) are with establishments that have less than nine workers, and 20.1 million are employed at establishments with more than 10 and less than 49 workers. Only 17.60 million (8 per cent) work in establishments with more than 100 workers.

These figures attest to the fact that the exclusion of the establishments of own-account workers from the Shops and Establishment Act and restraining factory operations under the employment threshold of 10-20 workers (64 per cent of total establishments with hired workers) leave out the epochal opportunity to assign the obligations on employers who are invisible in de jure labour laws.

Since the existing ID Act under Chapter VB excludes perennial establishment with less than 100 workers — u/s 25 (O) and 25 (F) — who shall be held responsible for paying wages and preventing lay-offs to 192.1 million (88 per cent) of workers that stay below the prescribed thresholds of industrial legislations? So, in these difficult times, collectivisation of workers is essential for restoring stability and solidarity; only that would mitigate their economic hardships in the post-lockdown period.

The writer teaches at the School of Management and Labour Studies, TISS, Mumbai

Published on May 07, 2020

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