By Diluting Labour Laws ‘Model’ Gujarat Ensures “Labour Peace”

In February 2015, the Gujarat Assembly passed a govt. sponsored bill which amended several labour laws. The changes took effect from January 2016, after presidential assent. The amendments, hailed by industry captains as very helpful and positive, were piloted by then labour minister of Gujarat, Vijay Rupani, who went on to become the Chief Minister of the state.

These changes show in a nutshell what the whole Gujarat ‘model’ is all about. They restrict the rights of workers, make their jobs more insecure, make wage increases difficult, facilitate outsourcing, ease the pressure on industrialists for implementing labour laws and practically suspend all rights of labour working in special economic zones (like the one owned by Modi’s crony, Adani).

Rupani was shamelessly exultant after the changes were passed. “I will pitch the state as a safe investment destination having zero industrial accident and complete labour peace at the 8th edition of the Vibrant Global Gujarat industrial investment Summit to be held from 11-13 January,” he said.

In short, the changes pave the way for more intense exploitation of labour and give more impunity to industrial employers to maximize their profits. This is also the sum and substance of the great Gujarat Model.

The Gujarat Labour Laws (Gujarat Amendment) Bill 2015 when presented for voting in the Assembly, saw the whole Opposition walk out in angry protest. After being passed by the BJP MLAs, it had to be sent to the President of India for assent since it involved changing central labour laws, like the Industrial Disputes Act, the Minimum Wages Act, etc. Then President Pranab Mukherjee gave his assent in September 2015.

The govt. stated that the purpose of the law is to “relax labour laws to give an impetus to industrialisation in the State.”

Some of the changes brought in by the Gujarat govt. include:

• Labour disputes redefined as “compoundable” offence – meaning the parties can settle the dispute out of court and pay a certain cut to the govt. This ensures that workers don’t get to fight for reinstatement but can be coerced to settle up and quit. Disputes under various labour laws were included in this, including contract labour law, gratuity, and even equal remuneration (for women) laws.

• Time limit to file case by employee changed from 3 years to 1 year. Workers often do not have the information and wherewithal to file cases and hence their legal fight gets delayed. The change will ensure that workers fail to file cases for justice.

• ‘Voulntary Audit’ or self-certification by industrial unit under the Factories Act, first introduced at the central govt. level in 2003 by the first NDA govt. led by Atal Bihari Vajpayee, in which factories declare themselves whether they are complying with labour laws relating to wages, safety, other service conditions, etc. This is a means of doing away with monitoring of labour law implementation by the govt. and implies full freedom for violation of these laws at will.

• Amendment to the Industrial Disputes Act so that strikes can be declared illegal in so called ‘public utility’ units (declared as such by the govt.) for up to two years.

• Change in Minimum Wages Act to include ‘outsourcing agency’ as a contractor thereby institutionalizing the hated system of contracting out work by employers in order to escape labour laws.

• Changes in Industrial Disputes Act to give employers in special investment regions, National Investment and Manufacturing Zone and other Special Economic Zones the freedom to hire and fire. This would help employers like the Adani group which runs the Mundra SEZ.

All this has been put on the fast track after Modi-led BJP came to power at the centre in 2014. The central govt. itself has been trying to change labour laws and a Code on Wages has been presented to Parliament. Some of the state governments run by BJP, especially the Rajasthan govt. have gone ahead in changing labour laws to benefit industrialists and curb workers rights.

In November, 10 central trade unions and several independent federations had held a three day ‘maha-padav’ (mega-sit-in) at Delhi demanding an end to such changes in labour laws, among other demands.

But the Gujarat govt. is a pioneer in this kind of neo-liberal policy implementation. The highly industrialized state has shown increasing profits for corporate, decreasing share of wages and consequent big rise in inequality, all in tandem with deteriorating health and education standards of the people – a typical feature of neo-liberal economy. The recent election campaign in Gujarat has shown that this anti-worker attitude is unpopular among the working population and the BJP may well meet its comeuppance when results are declared on December 18.