Assault on dignity and right of labour

Dr Santosh Kumar Mohapatra*


With few days left for workers to celebrate the International Labour Day, otherwise known as the International Day of Workers or the May Day, working class people in India got hammering by present ruling political dispensation due to resource crunch amid the coronavirus pandemic. The fact that while International Labour Day is used to limit the working hours within 8 hours and provide lots of relief to the Labour by which they can be able to live a better life in the World, Indian government has decided to freeze the Dearness Allowance (DA) due to the Central Government Employees and dearness relief (DR) due to the Pensioners from January 1, 2020 to June 30, 2021 in an attempt to save money to fund the battle against the novel coronavirus disease (COVID-19).

As reported in media, the Union Cabinet had in March 2020 approved releasing 4 per cent additional DA to the central government employees and pensioners in accordance with the increase in All India Consumer Price Index (Workers). Instead of issuing an order to implement the decision, the Ministry of Finance issued an order on April 23 freezing DA of central government employees numbering 48 lakh (including armed forces) and 65 lakh pensioners, which includes 60 per cent ex-servicemen. Dearness Allowance and Dearness Relief, however, will continue to be paid at the current rates. The government said the move will help save Rs 37,350 crore. A similar move will save the states Rs 82, 566 crore. The combined savings will amount to Rs 1.20 lakh crore, which will help in combating the coronavirus pandemic.

This decision comes as a matter of amazement and flabbergastation as few days back the Narendra Modi government has issued an advisory to both private and public companies not to lay off employees or cut their salaries, in the wake of the COVID-19 or novel coronavirus crisis.  The advisory from the Ministry of Labour and Employment, dated March 20 reads: “In the backdrop of such challenging situation, all the employers of public/private establishments are advised to extend their coordination by not terminating their employees, particularly casual or contractual workers from job or reduce their wages.”

Another circular is also issued by the Department of Revenue under the Ministry of Finance to all the officers and staff appealing to them to “contribute their one day’s salary every month till March 2021 to the PM CARES (Prime Minister’s Citizen Assistance & Relief in Emergency Situations) Fund to aid the government’s efforts to fight the coronavirus pandemic”. However, appealing any voluntary contribution is something different from compulsory deduction. One should contribute voluntarily as much as possible not only to PM CARES fund but also to Chief Minister’s relief fund and other funds used for benevolent purpose. Even one can contribute more than what government expects. But contribution should be voluntary.

However, the decision of freezing DA and DR has not gone down well with opposition parties and trade unions and working class organizations. While opposition leader Rahul Gandhi dubbed the decision as an insensitive and inhumane, various trade unions dubbed the decision as highly “arbitrary and unfair” and demanded its roll-back. Former Prime Minister Manmohan Singh has also opposed the above decision of government. Various trade union organizations dubbed the decision as a ploy to confiscate outright the legitimate dues of the employees and the pensioners. They have raised question that when government employees are fighting against monstrous attack of novel coronavirus by providing a lot of services to society especially taking risk to, how government is cutting their wages instead of rewarding. They argue that in a system where there is no control on price rise, denying compensation to wage-earners, when prices go up, is grossly unjust. There are many other ways for the government to find resources that are additionally needed to contain the pandemic.

It is true that COVID-19 pandemic has triggered recessionary and deflationary tendencies affecting the revenue generation of both centre and state. During such crisis, everybody has got moral responsibility to save economy and so nation. One may argue that while crores of people are languishing under severe lockdown induced crisis, if DA of central government employees’ and DR of pensioners are freezed for some months, it will no way adversely affect their lives and livings. The employees cannot wash their hands of any obligation in present juncture.

Above arguments seems to be correct provided bounteousness, munificence starts from rich, powerful. There lies some surreptitious design as viewed by trade union people. They think that the decision to freeze is not just to save resources but an assault on workers’ right and dignity of labour. Some think that it is an attempt by government to spread its suzerainty and extend brutal political prowess on working class people by taking the advantage of present imbroglio when common people are likely to support the government decision.

The working class people argue that if government wanted to take such decision, why it did not consult with trade unions and labour organizations. One may also defend government decision by stating that if trade union people would have been consulted, they would not have agreed to such decision. This is not truth. The bitter truth is that inability of government to justify its decision and not being able to reply some critical questions raised by trade union people.

The major questions raised by them are: Why government is not taxing rich, corporate at higher rates and failing to curb tax evasion? Why is punishment not imposed on those whose names were found in panama papers or who have kept their black money in various tax havens? What are step taken to recover bad debts of banks? While, at one hand, giving huge concession to richer section of society and corporate behemoths, on the other, government should not compel others to pay until it forces richer section of society, corporate class to pay more. If rich will not pay tax at higher rate, then how can government mitigate such crisis?

Question is also raised on recent reduced corporate tax rate, which benefitted big corporates to the tune of Rs 1.45 lakh crore. The government has in the last five-and-a-half years written off corporate loans worth Rs 7.7 lakh crores. In response to a query under RTI act, the RBI has admitted to writing off a staggering amount of Rs 68,607 crores due from 50 top willful defaulters, including absconding diamantaire Mehul Choksi as on September 2019.

Above all, there are more than Rs 13 lakh crore of pending loans to be recovered from these corporates. Even as the government struggles to mop up enough revenues, it is unable to realise tax revenues of around Rs 7.8 lakh crore (as of March 2018) is stuck in different tax disputes, from which Rs 7 lakh crore are less than five years old. As on November 30, 2019, there are around 5 lakh cases pending at various levels with disputed direct tax arrears amounting to approximately Rs 9 lakh crore.

Another question is raised about growing inequality at the cost of poor and those who have amassed massive wealth are not asked to pay in present critical juncture. According to Oxfam report 2020, India’s richest 1 per cent hold more than four times the wealth held by the bottom 70 per cent of the country’s population ( i.e., 95.3 crore). The combined wealth of 63 Indian billionaires is higher than the total Union Budget for the fiscal year 2018-19, which was at Rs 24, 42, 200 crore. The Oxfam report further said “sexist economies” were fuelling the inequality crisis by enabling wealthy elite to accumulate vast fortunes at the expense of ordinary people, particularly poor women and girls.

According to the report, the wealthiest individuals and corporations are under-taxed and the governments are failing to collect revenues that could help lift the responsibility of care from women and tackle poverty and inequality. If the richest are taxed just 0.5 per cent extra tax over the next 10 years, it would equal the investment needed to create 117 million jobs in sectors such as elderly and childcare, education and health. So, there will no resources crunch if rich, corporates will be taxed at higher rate.

The philosophy of taxing the rich at higher rate has been reverberated when some IRS officials had released proposals to hike taxes along with other measures to shore up revenues to alleviate the economic impact of coronavirus. They had recommended for raising income-tax rate up to 40 per cent for those with an income of minimum Rs 1 core per annum, re-introduce wealth tax for those with a net wealth of Rs 5 crore and levy a one-time Covid Relief Cess of 4 per cent on those with a taxable income of Rs 10 lakh and above. But Centre rejected above tax hike proposal by dubbing it ill-conceived. Surprisingly, the Chairman, CBDT has been directed to seek explanation from these officers for writing such ‘ill-conceived views’ in public without having any authority to do so.

Another question is raised about the necessity of incurring the Rs.20, 000 crore on central vista redevelopment project as well as the Rs.1.10 lakh crore  in Ahmedabad-Mumbai bullet train project. A senior architect and one of the founders of Lokpath, Narayan Murthy, also circulated an online poster on the “questionable priorities” of the Centre as it set out to spend Rs 20,000 crore on “needless construction” instead of using it for the fight against novel coronavirus or COVID-19.

Actually, the culture of hedonism, greed, rapacity, deceit has been ubiquitous since the introduction of neoliberal policies, which has spawned rampant consumerism and has changed the mindset of people.  While people want to accumulate wealth by hook or crook, a ruling class wants to increase GDP by any means even at cost of poor or triggering extreme inequality.  In such scenario, government cannot push only working class to sacrifice. It should start from top. When honesty, sacrifice, generosity and magnanimity will be imbibed by top level people, automatically it will inspire lower level people to emulate.

However, the economic logic defies such decision by government which is contractionary in nature while there is need of expansionary policy. When there is a deflationary and recessionary tendency in economy, expansionary policy is necessary. Effort should be made to increase aggregate demand by enhancing purchasing power of people. This is possible by spurring jobs creation and increasing income and expenditure. But in present juncture, if government freezes DA or reduce wage or retrench any employee, it will not remain confined to central government sector only. It will have rippling effect and will be manifested in greater magnitude in all other sectors creating a vicious circle dragging economy in to abyss.

Whenever, government employees experience wage cut, it will have some psychological impact and they may cut wages of domestic workers and indirectly wages of unorganized workers may be reduced too. Since there will be competition among unorganized workers for engagement, job to sustain income and lives in the aftermath of COVID-19 pandemic, they may be exploited more in the time of wage cut, retrenchment. Unemployment problem will be aggravated. It may be noted that, according to data from the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate has increased to 7.78 percent in February, the highest since October 2019. Now it has touched 26.2 per cent in the third week of April amid coronavirus lockdown, and 14 crore people have lost employment.

Attack on working class is also manifested through various reforms in labour laws to suit interest of business behemoth. Taking the advantage of present economic turmoil, votary of market economy are advocating for faster labour reforms if the economy is to thrive. The reforms advocated are not to improve the condition or ameliorate the plight of labours, rather to make the labour less onerous for establishments to hire and retrench workers. Arguments are made that companies must be allowed to hire as many persons as they want—whether on a permanent basis or for temporary periods—and let go of them if needed.

In fact, some of the recommendations of the Parliamentary Standing Committee on Labour, if approved, will have detrimental impact on working class people. Recently, the Parliamentary Committee on Labour in its report on the Industrial Relations Code, 2019, has recommended that “in case of natural calamities, payment of wages to the workers until the re-establishment of the industry may be unjustifiable”. The ongoing lockdown to check the spread of COVID-19 can be counted as one such calamity. But taking the advantage of this recommendation, industry may retrench or cut wage even when they are capable of paying or sustaining existing workforce.

The Industrial Relations Code 2019 is an amalgamation of three laws — Industrial Disputes Act, 1947, Trade Unions Act, 1926, and Industrial Employment (Standing Orders) Act, 1946. It was introduced in the Lok Sabha in November last year and referred to the Standing Committee on Labour in December. As part of labour reform initiatives, the Labour ministry has decided to amalgamate 44 labour laws into four codes—on wages, industrial relations, social security and safety, health and working conditions.

The Industrial Code makes it incumbent upon the employer to pay 50 per cent wages to the workers/employees who are laid off due to shortage of power, coal, raw material etc for 45 days. The Committee has, however, expressed reservations for payment of the prescribed percentage of wages to the workers in the event of closure of an establishment due to “natural calamity”.

There was demand from industry to raise the threshold for the number of employees up to which an employer can let go of workers without the permission of the authorities from the current level of 100.  States like Andhra Pradesh, Rajasthan, and Uttar Pradesh have raised the threshold from 100 to 300. The committee has suggested that the threshold be raised to 300 workers. It means companies with up to 300 workers cannot sack people, close units without government’s nod.

The committee is not convinced with the ministry’s reluctance in providing for a minimum and maximum tenure for fixed-term employment. The committee feels fixed-term employment is seen as a move of mass casualization of the workforce and is counterproductive to job security. In view of the fact that repeated renewals would make it easier for the employers to retrench a worker on the expiry of the contract. The committee desires that provisions should be made for a minimum tenure under fixed-term employment so as to guarantee job security. However, committee recommends to bring domestic workers under the purview of labour laws, allowing them social security and other benefit.

Many years ago, Dr Martin Luther King Jr. had famously asserted that the dignity of all work, which implies that the labour of everyone- farmers, workers, rickshaw pullers, grocers, drivers-was essential to all of our health and well being. Dr King was not just making a moral observation. According to him, all types of works such as sanitation workers or who picks garbage are important. We cannot sustain our life without help of anyone. He was calling for “genuine equality” through an increase in wages, health care, job safety and economic power.

Today, labours or working class people are forced to accept limited wages, benefits and their ability to organize is battered. A commitment to economic dignity must also go hand-in hand with protecting workers’ right to organize and tie together to prevent dominion and embarrassment on the job. The decision to treat working class as second class citizens is not pre ordained but it is a policy change.




The author is an Odisha-based eminent columnist/economist and social thinker. He can be reached through e-mail at [email protected]



 DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of  Sambad English.



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