The post reform period has been characterised by the state and industrial houses pushing for labour flexibility. At the same time, trade unions have, from time to time, collectively pushed for the preservation of labour rights, won after years of struggle.

The trade union movement, though splintered, has conducted 15 all-India strikes/agitations during 1991-2015, largely led by the Left-of-centre alliances and supported by others depending on political and organisational exigencies. Since 2011, the central trade unions supported by disparate political organisations have generally spoken in one voice, resulting in wide participation in the strikes. The absence of a dialogue on labour reforms has worked as a provocation.

Their call for a national strike on September 2 was given by all the trade unions, including the Bharatiya Mazdoor Sangh (BMS), on a 12-point charter of demands.

Such strikes have succeeded in slowing down the reform process, save in the case of some disinvestments. The legal framework of industrial relations remains virtually unchanged, save for some pro-worker amendments in the social security laws and the Industrial Disputes Act (the ID Act). The very fact that the Centre has dithered on the reform efforts and initiated a few significant welfare measures like employment guarantee scheme and health security, underscores the strength of trade unions and the democratic character of governance. This is not surprising. Labour market reforms unlike capital market or financial sector reforms have direct social and political implications.

Change of tack

But with the National Democratic Alliance (NDA) assuming power in mid-2014, some State governments dared the trade unions by successfully introducing core labour law reforms such as amending Chapter V-B of the ID Act and the Contract Labour Act. The Modi government has sought to send strong signals to global and domestic investors that it would introduce these very core reforms at the national level, and has hence floated codes on wages, industrial relations and other issues. The trade unions have criticised these reform initiatives. The presence of BMS till the penultimate moment bolstered their morale and embarrassed the Centre. The demands largely cover issues concerning labour flexibility, enhanced labour rights including better minimum wages, opposition to unilateral reform measures and to foreign direct investment. The inter-ministerial committee headed by the finance minister has held talks with the trade unions.

The NDA government has reportedly given an assurance on meeting seven of the 12 demands, such as raising minimum wages and bonus eligibility limits, creating a social security net for contract workers and holding a social dialogue before effecting reforms. Appeased by these statements, BMS withdrew from the strike. They are prepared to give six months to the government for execution of promises, before reviewing their position.

Trust deficit

There are two views that come up here. The unions could have maintained their unity and deferred the strike. This would have probably shifted the onus of “proof of constructive social dialogue” on the government. In the event of the government not delivering on its promises, the trade unions’ legitimacy would have risen. Such legitimacy is important in strikes that affect social welfare. The other view applies to trade unions which are not convinced by the assurances.

What has marked the initiatives in the post-reform period is the absence of social dialogue. The symbolic, occasional consultations at best stoke frustrations and do not yield desirable results. This is borne out by the hurried parleys in recent days, just before the strike.

The NDA government has earned its mandate through a democratic process of elections. But it can only ignore at its own peril democratic channels of communication, such as social dialogue in policy and law making. The trust-deficit is more than ever before.

The trade unions have given a new twist to the dialogue process, saying that just as the government discusses “taxation” matters with business organisations and not with trade unions, labour law reforms must be discussed solely with trade unions. But policy making on industrial relations must be tripartite and consensus-based.

The writer is a professor at XLRI, Jamshedpur