It’s Time Unions Did Soul Searching

The unions set forth twelve demands on the Government. [And I clarify that I do not champion the cause of any political party]. Let us discuss one of them which gets discussed often – it is Demand Number 8, it pertains to ‘contractorisation.’ Reproduced below is the demand I am referring to.
Demand 8. Stoppage of contractorisation in permanent perennial work and payment of same wage and benefits for contract workers as regular workers for same and similar work.
For the last six years I have been speaking to union leaders and HR professionals not just from Mumbai but also those elsewhere in the country. My sympathies are with the contract workers whose plight must be seen to be believed.
And it is evident that the unions are shedding crocodile tears.

Situation Is of Unions’ Making Too
Unions must share a great portion of the blame for creating the situation. We see short sightedness everywhere, not just among the corporate managers; if you look around carefully you see that there is enough of irresponsible union leadership which has led to this situation. Unions just cannot disown this situation on contract labour as not of their making.
The fact is that being union leader is no longer a remunerative business. Many of those who came to the trade union field have moved to ‘invest’ in real estate. And those who were ‘committed’ union leaders have been ineffective.
The use of contract labour in Reliance Industries and in similar petrochemical complexes, for example, is to be seen to be believed. It is said that the permanent workers work in the first shift while contract workers do the same jobs in the second and the third shifts. Most of the maintenance section is manned by contract labour. This is nothing peculiar to Reliance. This is true of manufacturing sector. Take a tour of auto industry near Pune and Chakan in particular. Or go to Nashik. You will find that the ratio of permanent workers to contract workers as 1:10 is almost the rule and not an exception.
Some will say even this does not represent the truth, the ratio is worse! If you wish to see worse ratio that 1:10, please go to Surat, in Gujarat State which has a Government allowing malpractices by ignoring them. Or go to nearby Silvassa in the Union Territory and find the same situation. It is of course easy to blame any Government, Central or State, or belonging to any party. But we would also like to know what the union leaders were doing when such a situation got created? Have they or haven’t they contributed by being silent spectators? Haven’t the union leaders connived? There are larger interests and there are vested interests!

Union Leaders as Contractors
I met a person who had conducted a survey near Pune region. They covered an area of around 40-50 kms from Pune. They told me that there is novel method now worked out for engaging contract labour. SMEs have perfected this art! The union leaders [internal or external] are given contract for providing contract labour!! So the union leaders keep quiet; they can silence workers because the leaders’ pecuniary interests are involved, and the leaders also silence the villagers who may like to bring pressure for any purpose.
Giving contract to union leaders directly or to their cronies is nothing new, in fact, it has been the malpractice for several years. But this double role of being a contractor as well as union leader unabashedly is certainly new.
Can the terrible situation of ‘contractorisation’ be created without union leaders’ connivance? Can Reliance have its way with employing hundreds [nah, thousands] of contract labour without connivance of the union leaders?
There are larger interests and there are vested interests!

Employ Contract Labour and Get More Variable Pay
The trend in the industry is that variable pay is offered to permanent workers. The formula for calculations are devised in such a manner that employment of more permanent workers means less variable pay. So it promotes engagement of contract labour. This is the emerging trend. Has it happened without connivance of union leaders?
There are larger interests and there are vested interests!

Unions Are Using Contract Labour as Pawn in the Game
Unions have used contract labour as pawns in the game. In Bajaj Auto the workmen resorted to strike. As a part of their strategy they filed cases against the company for misuse of contract labour. When they finally reached the settlement of their demands, and obtained big chunk of a wage increase, they agreed to withdraw the cases against Bajaj Auto for misuse of contract labour. So in a way, the status quo on contract labour in Bajaj Auto remains or perhaps misuse, if true, and many believe that it was indeed so, is now with the connivance of the union! This is an illustration. Parallels exist and can be easily found in many industries.
There are larger interests and there are vested interests! Before the unions ask and demand stopping ‘contractorisation’ they will do well to do some soul searching.

Change or Perish; Rethink Your Role, Mr Union Leader!
There was a time when ER professionals spoke a funny language. They would say ‘I have taken permission of union to engage contract labour on such and such jobs.’ Permission? Unions were such a force that engaging contract labour without their approval was almost impossible.

There are many reasons why this situation has changed, and union leaders will find it easy to blame on the globalisation and the forces unleashed by it. The fact is that the force of economics is like a river in the flow – it removes anything that comes in the way wither by uprooting or by gradually breaking it down. Unions failed to adopt to the force of circumstances. And thus have lost power. And the sympathy of a common man. This is why they failed to get adequate support on September 2.

Unions will do well to recognise that ‘outsourcing’ is here to stay. It cannot be wished away. And no Government can stop ‘contractorisation’ since it is also happening with the connivance of unions and their leaders – a majority of them have no scruples and no ideology, much like their counterparts, the employers. The situation is as much of their making as it is by force of circumstances. To lead a nation-wide strike and brings wheels of the industry in some areas to a halt is not the cure, it is simply being irresponsible. Instead unions must sit down to take stock of the situation, rethink their role, work to evolve a way that gives contract workers their due, and also recognise that industries wish to manage ‘core’ activities as is the world trend. In the long run, this will only be in the interest of unions.

Vivek S Patwardhan
PS: For ready reference here are the 12 demands which were pressed in the Sept 2 strike.

1. Urgent measures for containing price-rise through universalisation of public distribution system and banning speculative trade in commodity market.

2. Containing unemployment through concrete measures for employment generation.

3. Strict enforcement of all basic labour laws without any exception or exemption and stringent punitive measures for violation of labour laws.

4. Universal social security cover for all workers.

5. Minimum wages of not less than Rs 15,000/- per month with provisions of indexation.

6. Assured enhanced pension not less than Rs 3,000/- per month for the entire working population.

7. Stoppage of disinvestment in Central/State PSUs.

8. Stoppage of contractorisation in permanent perennial work and payment of same wage and benefits for contract workers as regular workers for same and similar work.

9. Removal of all ceilings on payment and eligibility of bonus, provident fund; increase the quantum of gratuity.

10. Compulsory registration of trade unions within a period of 45 days from the date of submitting application; and immediate ratification of ILO Conventions C 87 and C 98.

11. Stoppage of Pro Employer Labour Law Amendments.


12. Stoppage of FDI in Railways, Insurance and Defence.

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