CLAT 2020 PG

Read the excerpts from an opinion piece entitled "Labour Law Suspension: Hit The Workers When They Are Down" by Pranab Bardhan, Professor of Graduate School at the Department of Economics at the University of California, Berkeley, published by Bloomberg Quint and answer the questions below:

It is interesting that while Indian states are trying to suspend labour protection and make it easier for employers to sack workers, many other countries are trying to minimise lay-offs in this period of crisis by giving wage subsidy to employers to induce them to keep the workers on the payroll. These programs are an effort to reduce displacement, distress, and loss of worker morale, and at the time of economic recovery less friction and de-skilling. The wage subsidies are quite substantial in Europe, Canada, Australia, and New Zealand. It is also being attempted in some developing countries like Argentina, Bangladesh, Botswana, China, Malaysia, Philippines, South Africa, Thailand, and Turkey.

In the continuing sordid saga of callousness and brutality with the millions of suddenly unemployed migrant workers over the last six weeks since lockdown, an interesting fact to note is that employers who mostly had stopped paying them over this period, thus causing widespread hunger and homelessness, have lobbied with state governments to stop sending them back to their villages so that they remain available when the industries restart. I am actually in favour of a thorough overhaul. The current labour laws, tangled and outdated as they are, serve the long-term interests of neither the employers nor the workers. At the beginning of this century, the Second National Commission of Labour made a whole set of sensible recommendations for such an overhaul, but they remain largely unimplemented. I would support abolishing the firm size limit on labour retrenchment altogether, provided there is a provision for adequate unemployment benefits, both for regular and contract workers, and there is something like a state-provided universal basic income supplement as a fall-back option for everybody. “Allowing more flexibility in hiring and firing has to be combined, as part of a package deal, with a reasonable scheme of unemployment compensation from an earmarked fund, to which employers and employees should both regularly contribute.” For far too long businesses in India, with some notable exceptions, have considered labour as a necessary but troublesome cog in the production machine, and the focus is to squeeze the maximum out of it with minimum pay and benefits while brandishing the threat of job insecurity. Organised labour, often under politicised partisan leadership from outside, has played that adversarial game. It is in the long-term interests of both sides to see at the ground level that labour-friendly practices can actually enhance long-term productivity and profitability. If cooperation can replace mutual suspicion and labour representatives can be trusted to participate in corporate governance—as is the practice, say, in Germany and a few other European countries—labour organisations can play a responsible role in achieving mutually beneficial goals. Taking the cover of the pandemic to unilaterally whittle down labour protections is going the opposite way, to distrust, and labour unrest.