 "Sandra Polaski")
The Union government has proposed a major overhaul in the country's labour laws. Giving weight to the unions’ opposing voice, Sandra Polaski, the International Labour Organization's deputy director-general (policy), says a strong social security floor first needs to be built and that some of the proposals under discussion might fragment the labour market. She spoke to Somesh Jha after delivering a speech on the current reality and future of work in India. Edited excerpts:
You spoke on how the present labour laws are outdated. The government has proposed some measures but the labour unions have termed this anti-worker, especially the move to ease retrenchment norms. Should such policies be continued?
I was speaking on a general principle, that many countries need to modernise their laws to adapt these to the current reality of the workforce. What can that mean? For instance, we have a number of workers in the formal sector who are slipping into the informal one. The law doesn’t prevent (the worker doing so). So, you can say either the law is too strict or too weak. (I think) It’s too weak. People say laws are too strict and that is why they are going for contractual relationships. Yet, these workers are falling away from the minimum protection in the form of social security.
Our point is this kind of dichotomy is not the right way to look at it. It takes really deep thought and good dialogue to update the labour laws, as the path is not very simple. It isn’t that there is a good law in the shelf that can translate into the Indian context. It has to be a law that allows the labour market to function in a way that more people get the protection of sound laws, reasonable security against arbitrary behavior, protection against contracts and access to social protection. A complicated process, as what India has now is very fragmented.
Employers argue they are not able to grow because of a tough retrenchment rule. So, in this case, could retrenchment norms be eased with social measures?
I think the place to start is the last point you made. Start with the social protection measure. Build a social protection floor, so that in case of retrenchment, they do not fall into poverty or malnutrition. Let’s build that first and then within that, if the regulation is too strong or too weak, you can begin to finetune it. In general, ILO is advising the Indian government to make the social protection floor strong and complete.
Talking about labour law reforms, (one should) try to create laws which are as universal as possible. Make it seamless, so that people can come in and out of it, as opposed to the present scenario.
So, if a social security floor is created, can retrenchment norms be eased?
It will take a while for India to build a social security floor. The question of ‘hire and fire’ is a very small part (of the labour reforms) and I don’t want to comment about the specifics because there are 44 labour laws in India.
The government is proposing a separate law for small factories which employ up to 40 workers. Unions complain it will take a chunk of workers outside the purview of labour laws.
We have mentioned to the government that the notion of having a separate law for small factories, in a way, is going to create some new segmentation. The idea of converting 44 laws into four was to avoid such a fragmented labour market. If you have a special law for one size or sector, you might create unintended segmentation of the labour laws.
We are specifically concerned about the numerical threshold. (We need) to be sure that it does not introduce an unintended consequence, by which firms want to stay smaller than 40 workers because they need to comply with an easier labour law. You don’t want to have an incentive that suggests firms stay smaller than 40 workers. We have raised this concern with the government. We are sharing with the government the experience we have had with labour laws in other countries.
ILO has also criticised the inspection scheme of the government. Where is India lagging?
We have found a lot of labour inspection systems haven’t grown enough to keep up with changes in the labour market. We are suggesting a more targeted approach, to look at where the most violations and vulnerabilities have been and target the inspection there.
