Labour in India

8/6/2019 Labour in India

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Working Conditions in India

Meha Lodhaforbsb GmbH, Cologne, Germany

October 2010



2

AgendaIndia and Millennium Development GoalsWorkforce StructureLabour Regulations

OH&SWages ± Minimum, AverageEmployment SecuritySocial SecurityTrade UnionsIndustrial DisputesCommonwealth GamesReality about Auto IndustryChild Labour, Migrant Labour & Domestic Labour



3

Millennium DevelopmentGoals (MDGs)



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India and MDGs1. Eradicate extreme poverty and hunger

Poverty 36% in 199 3- 9 4 to 27.5 % in 200 4- 05Very sluggish decline in % of malnourishedpopulation

2. Achieve universal primary educationPositive growth ± goal likely to be achieved

3 . Promote gender equality and empower womenGender parity in education can be achievedShare of women in wage employment in thenonagricultural sector is likely to reach only 2 4% by2015.

4 . Reduce child mortality rate70 per thousand live births by 2015 against thetarget of 4 2 per thousand live births



5

India and MDGs contd«5. Improve maternal health

MMR 36% decline between 1997 and 200 6

6 . Combat HIV/AIDS, malaria, and other diseases2.7 3 million people living with HIV/AIDS in 2002,2. 3 1 million (0. 34% ) by 2007% deaths of Malaria patients has not declined

7. Ensure environmental sustainabilityIncrease in forest cover2015 target for access to drinking water attainedImproved sanitation may not reach target

8. Develop a global partnership for developmentRemarkable increase in tele - density from 0. 6 7 per100 population in 1991 to 36 .98 per 100 in 2009



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Workforce Structure



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Workforce Structure� Population 1.15 billion

� 2009 to 2010 Labour force ± 520 million

� Around 28 million organized

Sector-wise Contribution to GDP and Workforce

17%28%

55%52%

14%

34%

0%

10%

20%

30%

40%

50%

60%

Agriculture Industry Services

% of GDP % of workforceData: 2009



8

0

200000000

400000000

600000000

800000000

Females 165285592 359795835 31670841

Males 187197389 384131994 28816115Total 352482981 743927829 60486956

0-14 years 15-64 years 65 years andover

0

200000000

400000000600000000

800000000

1000000000

1200000000

1400000000

Series1 1156897766 743927829 520000000 491980000 28020000 270400000 72800000 176800000 55640000

Population 15-64 years Labour Force Informalsector

Formalsector

Agriculture Industries Services unemployed



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Nature of Employment59 % of RW/SE* have no written jobcontract33% of RW/SE are temporary employees46% of RW/SE and 9 6% of casuallabourers not eligible for paid leave55 % of RW/SE and 9 6% of casuallabourers not eligible for social securitybenefits

* RW/SE ± regular wage or salaried employees



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Labour Regulations in India



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Indus trialRelatio ns� Trade Unions Act� IndustrialEmployment Act & Rules� Industrial DisputesAct

W age s� Payment of WagesAct & Rules,� Minimum Wages Act& Rules� Working Journalist(Fixation of Rates of Wages) Act & Rules� Payment of BonusAct & Rules

Sp ecific Indus trie s

Factories, DockWorkers, Mines,Journalists, MerchantShipping, Motor

Transport, Beedi andCigarette, ContractLabour, SalesPromotion Employees,Cinema workers,Theatre workers,Construction workers,Manual Scavengers

P artic u lar S ectio ns of S ociety

Maternity Benefit Act� Equal RemunerationAct� Bonded LabourSystem (Abolition) Act� The Child Labour(Prohibition & Regulation) Act�Inter State MigrantWorkmen Act

OH& S

� Factories Act

� Mines Act

� Dock Workers Act

� Fatal Accidents Act

� War Injuries Act

� Personal Injuries Act

Other s

� Weekly Holiday Act(shops, restaurantsand theatres)� National and FestivalHolidays Act� Labour Laws(Exemption fromFurnishing Returns andMaintaining Register byCertainEstablishments) Act� Public LiabilityInsurance Act

S ocial S ec u rity

� Workmen¶sCompensation Act

� Employees¶ StateInsurance Act

� Employees¶ ProvidentFund & MiscellaneousProvisions Act

� Payment of GratuityAct

Em p loyme n t & Trai n in g

� EmploymentExchanges(CompulsoryNotification of Vacancies) Act & Rules

� Apprentices Act



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Working Hours/Days Law / RealityFactories Act

Maximum 4 8 hours a weekMaximum 9 hours a day incl. 1 hour break

12 hours to 1 6 hours and less than 1 hour break

Overtime ± double wagesOvertime paid in single wagesMin. 1 day paid leave for every 20 work days*

No paid leave in many casesMaternity leave ± maximum 12 weeks paid

Not paid in many cases (unskilled labour)Weekly Holidays Act

Not widely followedMinor penalty

Applies to shops, restaurants and theatresOne day closed shop per weekOne day holiday per week



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Occupational Health & Safety



1 4

OH&SBureau of Indian Standards

IS 18001:2000 Occupational Health and SafetyManagement Systems.

Prescribes requirements for an org to formpolicies for OH&S management systemsApply and obtain licenseFactories Act, Mines Act, Dock Workers ActNational Policy on Safety, Health andEnvironment at work place



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Adobe Acrobat

Document

Occupational Safety Reality2005 - 11 deaths per 100 000workers ± Highest according to ILO

(50 000 industrial deaths/year)Under reporting - Govt. reports coverless than 10 % factoriesContract labourers not covered instatisticsCompensation delayed



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Wages



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Minimum Wages ± Bangalore &

PuneMinimum Wages -

Bangalore and Pune

Minimum subsistence wageMinimum food requirements, clothingrequirements, rent, fuel, lighting,children education, medical expenses

National Floor Level Minimum Wagesat Rs 100 per day from 2009



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Average WagesNation wide manufacturing wage average of 9engineering industries:

70 64 manufacturing units covering 4 09 000 workersIron and Steel, Casting and Forging, Agricultural

Machinery & Parts, Textile Machinery and JuteMachinery, Machine Tools, Electrical Machinery andApparatus, Electrical Apparatus, Prime Movers,Boilers and Steam Generation and AluminiumIndustry

Average daily wage rate Rs 210 ( 3 .5 Euros)Average daily earning Rs 257 ( 4 .2 Euros)Average daily wage rate of time - rated workers Rs 211( 3 .5 Euros) and piece - rated workers Rs 1 6 7 (2.7 Euros)Average daily earnings of of time - rated workers Rs 258( 4 . 3 Euros) and piece - rated workers Rs 1 6 8 (2.8 Euros)Time - rated remuneration more popular



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Salary Split-up

Gross SalaryBasic Pay

Basic SalaryDearness Allowance (Inflation)

Other Allowances (HRA, Medical, Uniform,Conveyance etc)

( - ) Deductions(If Salary exceeds Rs 6 500/month) EmployeesProvident Fund (12 % of basic pay)



20

Employment Security



21

Lay-Offs

Industries with 50 or more workmen± 50 % of basic wage and dearnessallowance for all laid off work days(maximum 4 5 days)Employer employs more than 100workers, prior permission of StateGovt. required for retrenchment, lay -

off and closureState Govts. normally unwilling to grantpermission



22

Voluntary Retirement Scheme

(VRS)Generous tax - free severance payment topersuade employees to voluntarily retireRight - sizing workforce> 4 0 years old, completed 10 years serviceExample - a 46 year old worker who hasworked for 20 years in a company will get 3 0months pay (1,5 * 20) plus 6 0 % of the basicpay for the next 1 4 years (upto retirement)Tax - free upto Rs. 500 000Counselling/fund management/rehabilitationSKF Bearings ± VRS in 1998 - 6 00 - 800employeesAtlas Copco ± VRS in 1998 ± 107 employees



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Social Security



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Social SecurityP rogram Name Fi n a n ci n g W ith d raw

EmployeesProvident Fund(EPF)

Employer:1. 6 7 -3 . 6 7 %

Employee:10 - 12 %

Government: None

During service - after 5 or 7 yearsto buy immoveable property, fundchildren¶s education or marriageexpenses or medical expenses.

OR On retirement or terminationof services. In all cases withinterest

Employees PensionScheme (EPS)

Employer: 8. 33%

Employee: NoneGovernment: 1.1 6%

After minimum 10 years of service and attaining 58 years of age or to dependents after deathof member. Monthly or lump sum

Employees DepositLinked InsuranceScheme (EDLI)

Employer: 0.5 %Employees: None

Government: None

Death benefit to dependents of deceased employee

* All percentages are percentages of basic wage + dearness allowance



2 6

GratuityLump sum payment on retirement/resignationor death/disability (to nominees or heir)After continuous service of minimum 5 years15 days wages (last drawn) for everycompleted year of service

Example Rs. 500 * 15 * 20 years = Rs 1 50 000

Gratuity ceiling Rs 1 000 000

Applies to all levels of workers



27

Trade Unions



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Trade UnionsTrade Unions Act

11 recognized CTUO, 70 000 registered TUMembership - 2 % of Indian workforce

Most trade union leaders are ³outsiders´ (notworkers) and affiliated to political parties µMinimum rate of subscription by members of thetrade union is fixed at Rs 1 per year for rural workers,Rs 3 per year for workers in other unorganized

sectors and Rs 12 per year in all other casesFor the promotion of civil and political interest of itsmembers unions are authorized to set up separatepolitical funds



29

Works CouncilsNot successfulTrade Unions fear erosion of power

Scheme for Participation of Workers inManagement (198 3 )

Tata, HMT, BHEL, M&M, Godrej, BoyceTrade Unions ± undermines their role,burden for workers



3 0

Facts79 % of casual labourers are notassociated with any union/association

5 3% of RW/SE are not associatedwith any union/association34% of RW/SE non - agriculturalworkers are trade union members



3 1

Factors Affecting Decision to

UnionizeReach of communist Party (if High)Political Activism (if High)Unemployment Rate (if High)

Sector of Employment (Public)Type of education (technical)Size of establishment (large)Level of education does not affectpropensity to unionizeUnionization increases with age of individual, disadvantageous socialbackground



3 2

Industrial Disputes



33

7th

September 2010Nation wide strike

Called for by 9 of 11 Central TU OrganizationsNo impact in Maharashtra and KarnatakaImpact mostly in Communist dominated regions± Kerala and West Bengal6 0 000 000 workers participate

Proper implementation of labour laws

Stop privatization of profit making PSUsUnorganized workers social security

Jobs for people laid off during crisis



34

Industrial Disputes ± Strikes & Lockouts

0

00

200

300

400

500

600

700

800

900

000

993 994 995 996 997 998 999 2000 200 2002 2003

Strike Lockout



3 5

* P rovi s io n al half-yearly d ata for each year. Data n ot available for remai n in ghalf year.

Industrial Disputes ± Strikes & Lockouts (recent years)

I tem 2008 2009 2010

S trike s 12 4 71 58

Locko u t s 15 3 179 20

Ma nd ay s Lo s t 6 8 4 7272 6 851 43 5 1 4 7 6 772

W orker s Affecte d in S trike s 4 08 36 1 115515 8801 6

W orker s Affecte d in Locko u t s 51857 8 46 2 6 1 34 21

Retre n chme n t s 9 15 6

Clo su re s 4 5 3 2 27

Worker s Affecte d in Retre n chme n t s 2

12

1

W orker s Affecte d in Clo su re s 88 11 11 1



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Commonwealth Games, NewDelhi - 3 rd to 1 4 th October 2010



3 7

Working ConditionsContractors thrivingRs 200 to Rs 700 for 8 hours workUrgency ± payment according to quantity of workWomen ± Minimum Rs 100/1 3 0 for 8 hours work

Hiring on daily/weekly basisNo job security ± hired and fired everydayNo possibility to choose type of workShelter in tents/roadside near construction areas forunskilled workersTin shelters for skilled workers27 workers injured when a bridge collapsed onSeptember 21 st .Major protest organized on September 2 3 rd

Construction work delayed



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39



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Words of the Supreme Court forthe New Delhi Municipal Council

"In this country, payments are made without work being done. Newly constructed bridge collapsed like

a pack of cards. 70,000 crores (11.6 billion Euros) areinvolved. There is rampant corruption in thecountry«..How mindless and lawless are you? Noregard for history, no regard for constitution. Thereis a totally unethical government with no moral

values. Money is the only thing that matters. Why don't you convert Jantar Mantar into a hotel or amall and India will shine?"



4 1

Corruption Index



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Reality about Auto Industry



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Anti - union tactics at HyundaiSince July 2007, Hyundai Motor India Employees¶ Union (HMIEU)members have suffered from dismissals, suspensions, and transfers.They have also faced the company¶s widespread use of threats,harassment, and intimidation for joining a union.More than 1 3 00 (HMIEU) workers at Chennai, India, went on strike on20 April 2009 after management refused to negotiate with the union.

On 6 May 2009, 900 strikers were arrested, which prompted letters of protest as well as meetings and demonstrations at Hyundai¶sheadquarters in Korea by International Metalworkers¶ Federationaffiliates.On 2 3 July 2009, Hyundai signed a wage settlement with a pay riseover a three - year period. A section of employees began a sit - downstrike protesting the wage agreement because management wasforcing them to agree to settlement. The company also refused to

recognize any established union in a particular plan. HMIL Chairmanand Managing Director H S Lheem said that the company would onlynegotiate with the Workers¶ Committee set up by management, withwhich the company had recently entered into a wage settlement.As of December 2009, 6 5 workers have been fired for their unionactivities and 34 more were in the process of being dismissed



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Rico Auto Industries21 September 2009 - 1 3 00 workers from Rico Auto Industriesin Gurgaon, India, went on strike after the company suspended1 6 workers after they filed for trade union registration22 September 2009 - at least 3 5 workers injured when policelathi - charged 3 500 demonstrating workers18 October 2009 - a Rico employee died during a continuingstrike by workers. The worker was beaten to death by mencarrying iron rods who were believed to be associated withRico. 4 0 other workers were injured.20 October 2009 - over 100 000 workers from 70 autocompanies in the region stopped work in support of the strikingRico workers. Police invoked Section 1 44 of criminal penal codethat bans assembly of over five persons to counter thedemonstration.22 October 2009 - Rico Auto said it was ready to recognize thelabour union and take back 9 of the suspended workersStrike lasted 4 5 daysGM and Ford shut factories in North America for 5 days



4 5

Tata Motors

Average wage increase of 12 - 1 3% between 200 6- 2008

Single digit increase in 20092010 3 year wage agreement

Benefiting 6 8 6 1 Pune workers

Minimum Wages ± Rs 2 4 29 3 /monthMaximum Wages ± Rs 3 5 221/monthAverage Wages ± Rs 3 2 6 5 6 /month



46

Child Labour, Migrant Labour& Domestic Labour



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Child Labour ± Non - hazardousactivity - Law

Max 3 hours followed by rest for min. 1 hour. Min 2 hrseducation per day*Max 6 hrs per day including waiting time for work and restMax 1 establishment per dayNo work between 7 pm and 8 amNo overtimeMin 1 day holiday per weekNotification to local InspectorBan on children working as domestic labourers or in recreationalcenters. 2 4 hour telephone helpline for children

Y ear 1971 1981 1991 2001W orki n gChil d re n

(5±14 yr s)10 75 3 985 1 3 64 0 870 11 285 34 9 12 666 3 77

W orki n g Chil d re n Accor d in g to Natio n al Ce nsus



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Enforcement of Child Labour Laws

Year Inspecti

onsViolati

onsProsecutions

Convictions

Acquittals

1997-98 288 1 25909 1 9496 6073 1 57

1998-99 222 856 11 263 6469 4 1 25 725

1999-00 242269 759 8 3972 1 333 356

2000-01 1 89842 1 0537 239 8 1 036 343

2001-02 449042 1 6604 920 1 1 799 606

2002-03 372504 2 88 50 5660 1 71 7 2229

2003-04 3462 1 2 264 11 922 1 40 1 3 642

2004-05 242223 1 6632 2609 1 385 447

Total 2353098 143804 59026 21481 5505

0

5000

10000

15000

20000

25000

30000

35000

1997-98 1998-99 1999-00 2000-0 1 2001-02 2002-03 2003-04 2004-05

Violations Prosecutions Convictions Acquittal



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Education System

Literacy Ratetotal population: 6 1 %

male: 7 3 . 4%

female: 4 7.8 % (2001 census)



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Unorganized WorkUnorganized Worker¶s Social SecurityAct, 2008

Considered deficientLife and disability coverHealth and maternity benefitsOld age protectionOthers

9 4% of labour force is in informalsector



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Migrant Workers

Estimated 20 million illegalBangladeshi immigrants

Culturally and socially integrated$ 3 500 to detect and deport an illegalBangladeshiInformal sector



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Domestic WorkersHousehold work ± washing, cleaning, child care8 ± 18 hours a day, 7 days a weekApproximately 2 million90 % are women, children25 % below 1 4 years*Majority are illiterateCaste System stigmaBai/Aayah ± Inferiority/DeregatoryHighly Exploited and underpaid, no job security, victims of domestic violenceLabor Laws do not cover domestic workers ± no legalprotection and rightsNational Domestic Workers Movement ± Rights, Justice andLegislationMinimum Wage Act in a few Indian States



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SourcesGovt. of India

Ministry of Labour and EmploymentMinistry of Statistics and Program ImplementationBusiness Knowledge Resource OnlineLabour Bureau

Times of India OnlineIBN LiveNDTV IndiaIndian ExpressThe Hindu BusinesslineFinancial ExpressNational Domestic Workers MovementIndira Gandhi Institute of Development ResearchMunich Personal RePec ArchiveJapan External Trade Organization ± JETROITUC - Annual Survey of Violation of Trade Union RightsMillennium Development Goals India Country Report 2009Transparency InternationalCIA Factbook India Country ProfileInternational Journal of Socialist RenewalThe Wall Street Journal Europe EditionLivemint.com Wall Street JournalLabourfile.orgGurgaon Workers NewsRadicalnotes.comTribuneindia.comIndianews.comPaycheck.in



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Labour in India

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