Developing countries face frequent challenges in the process of development to pass the benefits to the impoverished section through generating employment for them and provide for respectable way of living. Universal adult Franchise is a landmark of democracy and raise voice for the interests of labour force which is large in numbers
These countries have to take into perspective labour interests in favour of industry and capital. On the contrary, developed countries approved the eligibility of workmen to exercise their franchise only after long period of industrial development. The capitalists of the country amassed great wealth during this period and, due to repeated labour movements, workers getting right to vote, activism of International Labour Organisation and New Deal of Roosevelt in latter period, the western governments assumed the duty of wealth redistribution. In India, the government at the time of independence assumed the dual responsibility of creation and redistribution of wealth simultaneously.
To achieve this, investment inflow in competition with developed countries is required. Investment will come only on offering low cost advantage, be it domestic or foreign. In the initial phase, cheap labour in surplus amount allows the industries to extract the low cost advantage. In consequence, industries start to expand, which gives rise to shortage of adequate skilled labour and the simultaneous rise of trade unionism. By now, low cost advantage begins to decline and governments find it very difficult to maintain equity between labours’ privileges and industrial growth through legislation. The government undertakes various initiatives like easing of infrastructure bottlenecks, tax concessions, etc. to keep the low cost advantages intact. This can be seen in the development of Chinese economy since the last two decades.
Trade unions like Bharatiya Mazdoor Sangha or Centre for Indian Trade Union are pressure groups with the objective of protecting the labour interests through ‘collective bargaining’. The labour force need to organise to influence the capitalists as the individual labour’s demands are not paid heed to by the management. They frequently deal for higher wages, safety at work place, social security, job security, etc. To achieve this, they hold demonstration, strikes and file petitions to higher authorities. The first organised strike was held in the Great Indian Peninsular Railways in India in 1899. At times labours use violence while protesting, the recent example being a jute mill in West Bengal and Maruti Udyog Ltd. They form a different class as vote bank, and political parties try to woo them before elections. However, in the past decade there has been significant reduction in the frequency of strikes, lockouts and man-days lost. The behaviour of labour force as separate vote bank has also changed which signals towards growing cordial relations between them and the higher authorities.
The employers also got organised in the need to deal with labour unions and to present their consolidated viewpoint, which resulted in the formation of the All India Organisation of Employers, the first such organisation, in 1932.
Three parties are involved in such cooperation called Tripartite Cooperation System that includes (1) government, (2) employer and (3) trade union. The government in such cases acts as the mediator between the two parties generally having conflicting interests. However, in reality all the parties work on a common ground of industrial growth and are mutually dependent upon each other.
There are many articles in our constitution which are focused towards their interests. A few examples include Article 23 that prohibits forced labour, 24 that prohibits child labour below the age of 14 years in factories, mines and other hazardous occupations. Moreover, the forty-second amendment introduced Article 43A—which directs the state to take steps making sure the participation of workers in the management of industries. (Gandhiji described the employers to be trustees of workers’ interests and directed them to ensure the welfare of their labour force.)
One of the fundamental features of welfare state is labour protection legislation with the objective of rendering social justice. The chief objective of such laws should be creation of more, safer and rewarding job for the upliftment of labour. It includes criteria on minimum wages, working conditions, overtime controls, rights against unjustified retrenchment, strengthening of labour unions, right to compensation of workers in case of accident at workplace, post-retirement benefits, personal progress, skill development, social security and dignity of labour, etc.
Around 85–90 per cent of workforce in India is employed in informal sector which are micro firms employing about 5–10 persons where these laws are inapplicable. A great number of regressive laws are in operation to discourage such employers from expanding their businesses. Moreover, they do not have that much knowledge of laws and do not avail the services of lawyers ensuring that conformity to law is much expensive. In addition, a large number of workforce do not get any formal training, which results in low productivity and low value addition.
Modernisation of workplace is mostly good for workers in long term. For example, when telecom revolution took place, few thousand workers lost their jobs because of transformation from manual landline networks to digitised cellular network. However, the telecom sector in present times is one of the biggest employers in India and pays decent perks to its employees. Similar adverse reactions were reported from the employees during the introduction of computers in various departments and PSUs.
Enforcing the retention of a disproportionately large number of workforce on an organisation, would cause the business to suffer and over a period of time closing of its operation. When it affects large number of firms, this in turn will hamper the whole economy as the investors will take into account costs of these crises as well. Their preference would be on capital-intensive production or lower production causing lower employment and higher prices of products. On the contrary, is the relaxed criteria of easy entry and exit, will result in growing manufacturing firms, with option for more investment, more number of factories, causing more employment and lower costs of products. This over a period of time will lead to a robust manufacturing sector having the capacity to employ any retrenched workers in productive employment.