Workers need wage policy, not draconian dramatics

Bhaskar Majumder

This is high time for any ruler across countries to do and undo anything – in the name of the people. But people are arrested – they are not in prison, but imprisoned in their own home – home-locked. The key is with the ruler. People know that this is for their safety – innocent people are not risk-lovers. Excepting a few enjoying the home-locked-living post-Corona 2019/2020, the majority have started being anxious for the future indefinite. While the woman domestic worker got one month’s wage labour-free in Kolkata for the Maalkin advised her not to do the hand-job for the tenure with assured wage-for-no-work, the worker had the fear of no work-for-wage in near future. It seemed rational fear for the Maalkin or her spouse learnt domestic works while being home-locked in Corona season.

My concern is not for the families of women domestic workers only – the workers that constitute the home-based invisible labour market. I am concerned for the New Deal of the Government ‘of the people for the people, and by the people’ of India. It seems not judicious to opine that all the people are to be consulted at any particular point of time to decide what law is to be formulated for their welfare – 130 crore cannot be consulted even by dint of decentralized planning. This is more so in abrupt global crises called Corona 2019/2020. The Government appoints committees and commissions of knowledge-workers to prepare a vision document to help the Government formulate the Act for implementation. The Committee helps the Government legitimize what the Government searches for. The Act also appears acceptable to the people. The core point comes here.

Corona 2019/2020 locked the economy for it home-locked the workers. A Parliamentary Standing Committee on Labour now batted for the capital-owners opining it unjustifiable for the owners to pay wages of workers during natural calamities. The Government of India has not declared Corona 2019/2020 a ‘natural calamity’. The Government issued an Order on March 29, 2020 directing companies not to reduce wages of workers during the lockdown period. This was challenged by some employers in the Supreme Court. The labour laws in existence in India allow workers to get layoff compensation in case businesses are disrupted by a ‘natural calamity’. The Standing Committee has suggested to the Government to allow bigger companies retrench workers, without the need to seek consent from the Government.  

My own reading is that the Standing Committee was disproportionately sympathetic for the employers when it opined: “…in case of natural calamities .....which often result in closure of establishments for a considerably longer period without the employer’s fault, payment of wages to the workers (towards layoff compensation) until the re-establishment of the industry may be unjustifiable”. The Report of the Standing Committee was made public on April 24, 2020.

The lockdown enforced on March 25, 2020 meant a shutdown for the businesses, except production or services of essential items. The Government urged employers not to layoff or retrench workers during the lockdown. This was led by a strict follow-up of the advisories from the Labour Commissioners. 
In labour law vocabulary, layoff is temporary when workers cannot be offered work for a short period of time that is different from retrenchment. India’s Industrial Disputes Act, 1947 governs the provisions for layoffs which itself is restricted to only registered plantations, mines and factories. The layoff compensation is paid only in case the firm has a size of workforce 50 or more. A worker, who is on the muster roll of a company and has completed 240 days of continuous service, is eligible to get 50 per cent of wages for 45 days as layoff compensation, under the law. Though the Ministry of Labour and Employment, Government of India, defended the ‘natural calamity’ clause, the Standing Committee did not accept it. There may be errors of omission and commission. If Corona 2019/2020 is declared a natural calamity or like a natural calamity, then the policy would have been just the opposite – it would have looked into the stresses in the survival of the workers. Anti-worker draconian measures on the section that was already forced to be home-locked do not help the nation grow.

The economics and politics of labour-coercing measures are not much difficult to comprehend. The very fact that the industrial production function considers a worker as a beneficiary in distribution of output produced – the idea that “capital produced output’’ – alienated the worker from the domain of rights-based demand for wages equivalent to what he produced. The capital-owner produced output, controlled technology, and hired labour power. Hence, the committee, constrained by conventional wisdom, argued for non-payment of wages – “No work, no pay’’. The workers were made responsible for no work – it was conveniently forgotten that the “workers were home-locked’’. Surely, some of the enterprises may be on the sunset stage and “until the re-establishment of the industry’’, as argued by the Standing Committee, wage-payment for no-work should be stopped. Capitricks (Capital-tricks) may restore the enterprise, but once the workers remain unpaid, death/suicide of the workers may be the consequence. It may be remembered that India’s micro, small and medium enterprises employ 120 million workers as on date. The responsibility rests with the state.

I shall not go into the detail of the production function for it is known to all the students of economics. My point is very simple: One, in the remote past, the workers produced the machines/capital that the capital-owner now owns/uses; corporate responsibility requires payment of machine-pension to the workers. Two, in the immediate past, the workers were engaged by the capital-owner, the latter that dispossessed the workers of the remote past, so the owner is to compensate the workers. If not, the state has to for production itself reflected cooperation not only between labour and capital, but also between the workers-capitalists-Government.

The analysis may be made simpler. In addition to paying machine-pension and estimated labour-compensation, two tasks may be immediately executed by the state. One, in case the non-regular workers are rooted in rural areas, the state should engage them in MNREGA works at the wage rate fixed by the respective state governments per day per worker/household with same number of 100 minimum days of work as provided in the Act 2005 or the minimum number enhanced to 150 days in crisis or calamity. Two, if the non-regular workers are city-residents, they may be engaged in public works at the wage rate not less than the national minimum wage rate or wage rates differentiated by skill. The welfare pledge of Government requires fulfilment of its social commitment, and protecting Constitutional right to life of people.    

I do not dare to opine the redundancy of any such committee for all the members in such committees may not be ‘yes men’ of the power. Also, the policy-makers need legitimization from both the sides – the electors (people) and the experts. The experts work guided by the terms and conditions – experts from in-service and superannuated. The reports are for public acceptance if the Government first accepts these – there is no compulsion that the Government that appointed these committees will accept the Reports wholly or partly.

Post-Corona people are living scared: they are not in a position to question. This is high time the Government can go ahead with unstoppable Ordinances and Committees to justify what it thinks in the interest of people. People have no choice but to accept that these are in their interest.  History of mankind was not so linear, however.  

Bhaskar Majumder, Professor of Economics, G. B. Pant Social Science Institute, Allahabad - 211019

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May 3, 2020