time now, it has been evident that the stance of the Central government –
in terms of the executive authority and policy makers – has been anti-labour.
It is now apparent that the same tendency is also increasingly prevalent
among the judiciary, which has been delivering a series of judgements
which effectively operate to reduce the bargaining power and rights of
The recent Supreme Court judgement on the right of public employees to go
on strike, the arbitrary decision of a Kolkata High Court judge to ban
rallies on weekdays (which then was reversed); the Supreme Court's
reversal of its own previous judgement regarding the right to regular
employment of contract workers employed for prolonged periods – all these
are indications of a much broader and more dangerous socio-economic
There is an underlying economic paradigm in all this, which essentially is
the neo-liberal market-oriented framework. This argues that labour market
"flexibility" is crucial for increasing investment and therefore
employment, and also for ensuring external competitiveness in a difficult
international environment. In this perception, legal protection afforded
to workers, in the form of curbs on employers' ability to hire and fire
workers at will, minimum wages or granting freedom to engage in collective
action such as the right to strike, all actually operate to reduce
In addition, in India there is a further argument, which is frequently
accepted even by well-meaning people with a concern for the poor. This
relates to the argument that the dualism in the labour market in India
means that there is a conflict between organised workers and those in the
It is often argued that the recognised trade unions ignore the problems of
the workers in the informal sector; that protection given to organised
workers actually allows or even militates against the improvement of
conditions of unorganised workers, who are anyway much worse off. This
perception then leads even some progressive people to accept that the
"privileges" extended to organised sector workers can be withdrawn, since
they are anyway so much better off than most other workers in the economy.
This argument is based on poor politics and even worse economics. The
politics is wrong because in fact any struggle over workers' rights
necessarily affects all workers, even if this is not immediately evident
to particular categories of workers. It is amply clear even from the
Indian experience, that every attack on organised workers has also reduced
the bargaining power of unorganised workers, that periods of repression of
organised labour have also been periods when informal sector workers find
themselves even more exploited.
The neo-liberal economic argument is that these rules which restrict
hiring and firing put undue pressure on larger employers and prevent
smaller firms from expanding even when the economics of their situation
otherwise warrants it. This creates a dualistic set-up in which the
organised or formal sector necessarily remains limited in terms of
aggregate employment and most workers, who remain in the unorganised
sector, are therefore denied the benefits of any protection at all.
The resulting dualism is characterised by an organised (or larger scale)
sector, which has relatively low employment, and an unorganised (or
smaller scale) sector, which has low investment. If aggregate economic
activity is to break out of this dualism and marry the advantages of both
sectors, the argument goes, it is necessary to get rid of the constraints
put on large employers in the matter of labour relations. The purpose of
various recent interventions - the recommendations of the Second National
Labour Commission, the recent Court judgement, the attempts to create more
"flexible" and less protective labour legislation – is to supposedly get
rid of these constraints on employers.
The belief is obviously that reducing such "rigidities" and curbing the
power of organised labour will increase private investment, increase
economic activity and improve productivity. All these in turn will improve
external competitiveness, which is considered to be so important these
The chief problem with this argument is that it completely ignores the
major forces affecting investment, economic activity and therefore
employment. It is now accepted across the world that aggregate investment
does not respond to changes in the wage rate, but to broader macroeconomic
conditions such as the level of demand, the amount of public investment,
the expectation of external markets, and so on.
Labour costs are never viewed in isolation, but only in relation to labour
productivity, which in turn is affected not only by the level of
well-being, skill and education of the workers themselves, but also by
infrastructure conditions, the technology used in production, and so on.
In such a context, greater "flexibility" in labour markets might simply
mean the perpetuation of low wage-low productivity practices by employers,
rather than more economic growth.
While there is a formidable array of rights accepted by the Indian
Constitution for workers, and protective legislation as well, the problem
is that they are rarely achieved or enforced. Typically they can only be
even minimally enforced in the organised sector.
It is currently being argued by neo-liberal economists and others, that
these laws, which restrict employers' rights to dismiss workers at will
and stipulate some degree of permanency of employment, act as a major drag
on the profitability of the organised sector and on its ability to compete
with more flexible labour relations elsewhere. In this perception, a shift
towards a more universal contract-based system of labour relations, with
no assumptions of permanency of employment, is required to ensure economic
progress based on private enterprise within the current context.
But it can be argued in response to this, that labour laws are far less
significant as factors in affecting private investment, and therefore
employment, than more standard macroeconomic variables and profitability
indicators. Thus, the condition and cost of physical infrastructure, the
efficiency of workers as determined by social infrastructure, and the
policies which determine access to credit for fixed and working capital as
well as other forms of access to capital, all play more important roles in
determining overall investment and its allocation across sectors.
Expectations of demand and the extent of the market determine the volume
Indeed, it is also clear that in the recent past in India, strikes have
been far less relevant in disrupting production in the Indian economy,
than lockouts by employers. Chart 1 shows the actual number of strikes and
lockouts in India over the period 1999-2002. While both have been coming
down over this period, the decrease in the number of strikes has been more
dramatic, and in 2002, the number of lockouts was actually higher.
Chart 2 provides information on the number of workers involved in strikes
and lockouts - here, the evidence is that strikes have involved a greater
number of workers than lockouts. However, obviously strikes have been of
shorter duration and therefore less disruptive of production and economic
activity, as shown by the actual working days lost, in Chart 3. The
persondays lost to lockouts has been consistently higher than the loss due
to strikes, and was nearly double in 2002.
It is also likely that workers' discipline has improved in general, as
absenteeism rates among regular workers seem to have come down quite
drastically in the recent past, as indicated in Chart 4. Similarly, labour
costs per personday worked (Chart 5) have been broadly flat, despite large
increases in labour productivity, so that obviously workers have not
garnered any advantage from technological progress, the gain from which
have accrued to employers instead.
It is in this context that the right to strike must be considered in
India. Obviously, strikes are ultimate weapons, which are only resorted to
by workers when all other means of struggle and negotiation have been
exhausted. In recent Indian experience, the working class as whole has
been relatively responsible and only used strikes in extreme cases when
negotiations have failed completely or when employers have appeared to be
completely insensitive to genuine demands of labour.
Denial of this right would lead to a massive deterioration of the
bargaining power of workers, which has already been weakened by various
macroeconomic processes such a global integration and the withdrawal of
the state from important areas of regulation and provision. In any
society, the socio-economic rights of all citizens, including workers,
have never really been freely gifted by the state or employers; their
recognition and implementation have always been the result of prolonged
struggle on the part of workers and other groups.
Changing the conditions of such struggle amounts to changing the
possibility of ensuring these basic rights, which are even recognised in
the Constitution of India. Therefore, the right to strike for workers
remains an important instrument for ensuring the basic economic rights of