Industrial Relations: Towards social partnership?

"There must be a consensus on social partnership (between employers and unions) to avoid chaos and street riots in the present situation of widespread downsizing of workforce, outsourcing, casualisation of labour and deindustrialisation as a result of economic reform.''

These words, spoken by Mr. W. R. Varadarajan, a senior leader of the Centre of Indian Trade Unions (CITU) last week at a conference on industrial relations organised by the Confederation of Indian Industry, Southern Region, (CII-SR) in Chennai, are both symbolic and significant because it is a sharp departure from the stance adopted by the CITU and other Left unions just a decade earlier. The Left unions were the main dissenters to the wholesome emphasis placed by the report (1990) of the G. Ramanujam Committee on New Industrial Relations Law on bipartism in industrial relations and setting up of an Industrial Relations Commission relatively free from the official machinery. (The report has been gathering dust obviously as a result of political uncertainties and fragmented polity of the nineties).

The change of attitude, of course, reflects the difference that the post-1991 economic reform has made to India's industrial scenario - increasing domestic and international competition, unpredictable market forces and impossibility of a cost-plus route to earning profits. No less striking was the emphasis laid at the CII conference by representatives of employers on ``trust, cooperation and bipartism'' (Mr. P. Rama Babu), legislation on safety net for workers facing unemployment and end to differential treatment of internal and external union leaders (Mr. Arvind Doshi, Chairman of the CII's National Committee on Industrial Relations) and programmes for human development of and partnership with workers (Mr. N. Ramachandran).

Of course, exchanges of blame by worker and management spokesmen for the current scenario of legislation and litigation-driven industrial relations, split in trade union ranks and idle capacity in industry were not wanting. What is more, some representatives of managements (Mr. S. Ramasubramaniam and Mr. R. Viswanathan) even accused ``industrial jurisprudence'' (rulings of courts that have the effect of law) at the highest level of exceeding the jurisdiction of courts and overly extending undeserved protection to labour ``in the name of social justice, helping the underdog and the downtrodden.''

There is no doubt that the Industrial Disputes Act 1947, one of the major protective pieces of legislation for labour rights, had been subject to frequent amendments that sought to incorporate ever more checks on disciplinary actions, especially discharge/dismissal/termination of workmen. However, it would be futile to view this without looking at the background in which these amendments came about - the tendency of employers to victimise ``internal union leaders'' using disciplinary proceedings as a pretext.

Mr. Varadarajan warned that strategies such as downsizing, early retirement and outsourcing, which indigenous industry was adopting by ``imitating MNCs'' to meet competition from them, would not help Indian industry. ``What is good for MNCs may not be good for indigenous industry. We (unions) want a smooth dialogue (with employers),'' he said, deprecating the ``want of social dialogue'' in India.

Questioning the claim that security of job bred inefficiency or that ``flexibility'' in the labour market would create more jobs, he said the Union Government had come out (in the budget) with its ideas on labour law reform even without waiting for the recommendations of the second National Labour Commission (which is being boycotted by Left unions).

Mr. R. Kuchelar, veteran leader of the Working People Council, lamented that with managements posing the option of either partial retrenchment of employees with continuation of the business or closure of business involving total loss of jobs, ``we are forced to cooperate in anti-labour practices.'' Claiming that the present recession in India was not linked to globalisation since India's foreign trade accounted for only 0.6 per cent of the global trade, he blamed corruption and siphoning off of funds for the situation.

It was only in the west that the economic situation was linked to saturation of markets, surplus capital and idle capacity, he said.

Mr. Michael Fernandez (Hind Mazdoor Kisan Panchayat, Karnataka), said no major change had taken place in social relations between employers and employees to warrant a reform of the labour law. If security of employment was equivalent to inefficiency, the system of lifetime employment would not have worked during years of phenomenal growth in Japan. Workers in India were even now constrained from direct action by way of prolonged conciliation proceedings or by declaring the industrial undertakings concerned as ``public utilities,'' he observed.

Mr. N. Ramachandran from the TVS group said ``even if the environment is wrong, we (industry) have to be right, like we do our best to keep our home clean even if the environment outside is difficult.'' He suggested, quoting Akio Morita, former CEO of Sony, that workers would respond to positive initiatives if they were told ``what the improvements in work practices will mean for the society and the customer'' (and not merely for the company and its employees).

This seemed to echo the observation of the Ramanujam Committee on the ``thin line between hunger and anger'', that ``ever- increasing productivity should be our objective and bipartism the means, bearing in mind that the fruits of progress should percolate down to the poorest and not restricted to the two social partners, employers and employees.''

Posing the question whether India was heading towards a ``welfare state or a farewell state,'' Dr. C. S. Venkata Ratnam, Dean of the International Management Institute, New Delhi, said the objective of shopfloor participation techniques (quality circles, suggestion schemes and worker empowerment) was ``enlarging the pie'' (increasing the profits of the business concerned) and that of collective bargaining was to engage in a fight on dividing the pie. ``In India there is a tendency to look at both as having a common objective,'' he remarked.

While it is heartening to note the emerging consensus towards bipartism and ``social partnership,'' a disturbing phenomenon that stares one in the face is the absence of debate, at least at the level of the public, by the two sides within their own constituencies, on some broader questions of social development.

For instance, why is it that decades after classical (Ricardo- Marx) economics based on the labour value theory had been shunned by official economists in favour of new ``factors of production'' theories to explain profits, the question of labour standards as a decisive factor in competitiveness has arisen at the level of the World Trade Organisation (WTO)? How come that nearly a century after the forgotten theorist-cum-revolutionary Lenin portrayed the need for ``export of capital'' as being characteristic of the ``highest stage of capitalism - imperialism'', the question of a multilateral agreement on investment is emerging within the developed world as also in the WTO as a contentious issue?

On the side of the Left, the questions that arise are what lessons does the working class have to learn from the collapse of the socialist system and why market economies have shown a certain dynamism that has been lacking in the erstwhile Soviet bloc or in developing countries?

Is it possible or even desirable to prevent the spread of the market economy on a global scale before looking for a system that is free from recurrent crises, exploitation and poverty?

Serious attempts at evolving a perspective on social development is needed on both sides not because there is likely to be any agreement between their perspectives but because it is perhaps difficult to achieve a ``social partnership'' when the partners do not have a long-term world view of their own and have no scope of understanding each other's world view.

R. Gopalakrishnan

in Chennai

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