Introduction: Towards an Understanding of Informality and Precarity and of Some Institutional Developments and Challenges in Labour Markets and Industrial Relations in a Globalizing India

Abstract

India has taken definitive and giant strides away from command economy to a market economy during the last three decades, and these reform processes reflect the principles and precepts underlying the neoliberal model of liberalization, privatization and globalization (LPG). The neoliberal reform agenda has effectively meant state retrenchment and several significant changes, especially in terms of fiscal conservatism and a dominant role for the private sector which have implications for the industrial relations system (IRS) and the labour market. Employers, the international financial institutions and the pro-reform academics have exerted pressure on the governments (at both central and state) to reform labour laws and labour market governance. Reforms concerning the IRS and the labour market have been occurring in India in a variety of ways. While much of the post-reform period has witnessed impressive economic growth rates, the labour market and industrial relations outcomes have been adverse, viz. jobless growth, precarity, informality, labour protests, and so on. Then, it becomes important to understand and analyse precarity and informality, the role of labour institutions and policy dynamics surrounding the reforms, which the chapters in the volume do. This chapter provides a background to the contributions and basically argues that whichever way one looks at the functioning of IRS, there have been significant governance deficits and failures of the institutions.

1 The Institutional Framework of Labour Markets and the Industrial Relations System

Independent India sought to secure faster economic progress through economic planning. Economic planning strategized a significant role for the state and its institutions. State intervention was preferred to market-led growth model in the product market and to collective bargaining model in the industrial relations system (IRS) in India. Fierce nationalism and the need for speedier economic progress defined the role of labour in economic development as one of the nation builders, as one who would eschew sectional interests to espouse the cause of national interest. The industrial and the labour policies designed during the years immediately after political Independence envisaged state intervention in industrial economy via industrial licensing and other instruments and also in the IRS in order to usher in speedier economic progress and to ensure industrial peace (Shyam Sundar 2009).

During the planning, a kind of implicit social pact between state, capital and labour at least concerning the organized sector was obtained. State would extend organizational legitimacy to trade unions and provide labour welfare via a host of labour legislations; it would enable supply of disciplined and committed workforce to the firms. In exchange, labour and capital would accept state intervention and ensure industrial peace and industrial growth. The relations between state, capital and labour were accordingly structured. In the process of ‘regulation accumulation’ the state and its instrumentalities like the legislature, the labour administrators (such as the labour inspectors) and the judiciary expanded their scope and coverage of intervention. In India, state has determined the procedural and substantive rules of the IRS through labour laws, whereas in countries that have adopted voluntarism model, collective bargaining supplemented by mediation and voluntary arbitration determines such rules (Deshpande 1992).

The legal framework of the IRS has been determined in accordance with the International Labour Organization (ILO) instruments (comprising Conventions and Recommendations) and the Constitution of India, 1950. Though the Constitution assures freedom of association and unions as a fundamental right under Article 19(1)(c), but the complementary rights or rights derived from the former right such as the right to strike or the right to trade union recognition are not elevated to the status of a fundamental right. The Directive Principles of State Policy constitute the aspirational goals of Indian Society and hence provide directions to policymakers and judiciary. They include right to work, living wage, equal pay for equal work, workers’ participation in management and so on. Under the Constitution, ‘Labour’ figures in the Concurrent List, which means that both the central government and the state governments can enact laws subject to the condition that in the event of conflict between the laws passed by both the law enacted by the Centre will prevail over the state; however, the state governments can pass amendments on the same subject which are different from those of the central law if they secure the assent from the president.

As a result of the aforementioned Constitutional arrangement, reportedly 44 central labour laws and hundreds of state-level laws apart from hundreds of judicial decisions (which constitute case laws and become governance instruments), govern the IRS and labour market actions in India. The central labour laws cover aspects relating to (a) safety and conditions of work in factories, (b) industrial relations, (c) wages and other aspects of compensation and (d) social security. The three main labour laws that concern us here are, the Trade Unions (TU) Act, 1926, the Industrial Disputes (ID) Act, 1947 and (d) the Contract Labour (Regulation and Abolition) (CLRA) Act, 1970.

The TU Act provides for voluntary registration of trade unions and extends a set of rights (immunity from civil and criminal conspiracy) and liabilities (e.g. governance aspects of a trade union) but does not provide for compulsory recognition of trade unions for collective bargaining purposes. The ID Act has created institutions like works committee, grievance redressal cell, collective bargaining, conciliation, court of inquiry, voluntary arbitration and compulsory adjudication (labour courts and industrial tribunals) to prevent and resolve industrial disputes. It also seeks to regulate strikes and lockouts, especially in public utilities. More importantly, it requires industrial establishments (only registered factories, mines and plantations) employing 100 or more workers to secure prior permission from the appropriate government (apart from serving notices to trade unions and workers as relevant) before effecting layoff and retrenchment of workers and closure of establishments, and provide compensation as provided for in the Act. This has been a contentious provision as we see later. The CLRA Act primarily provides for abolition of contract labour under certain conditions (as stipulated under Section 10 of the Act) and regulates the welfare facilities concerning contract labour.

2 Labour Markets in India

It is well established that labour market in India is not only large, comprising approximately 500 million workers but deeply segmented, but it is segmented on the basis of gender (which is not unusual in any country as Papola 2013 points out) and other features which are unique to India, such as caste, religion, geographical origin (rural and urban) and cultural and linguistic features (see Deshpande 1983; Papola 2013). But segmentation of labour market on the basis of regulatory (labour laws or trade unions) coverage is unique to India and has been a subject of extensive debate—one with which this book is also concerned. As we noted earlier the legal framework in India is quite complex in terms of its coverage. Prof. L.K. Deshpande carried out a seminal work on labour market in Mumbai during the mid-1970s which brought out in a clinching manner the segmented (rural/urban origin) nature of it (Deshpande 1983) (Table 1.1).

Table 1.1 Total employment by sectors, 2011–12

We see from Table 1.1 that agriculture accounted for nearly half (48.89 per cent) of the workforce in 2011–12 (the latest year for which we have the data), while the manufacturing (organized and unorganized) and the non-manufacturing sectors employed 12–13 per cent each, and the services sector little more than one-fourth (26.84 per cent) of total workforce. The open unemployment rate in 2011–12 was estimated to be 10.6 per cent (Mehrotra et al. 2014, Table 1). The most important segmentation of labour market is the so-called division variously called as organized and unorganized or formal and informal (Table 1.2).

Table 1.2 Distribution of employment in various sectors by matrices of organized/unorganized and formal/informal (figures unless otherwise mentioned, in millions)

The predominance of informal employment (informal in the organised plus informal in the unorganized sectors) is evident in all the sectors though its share is slightly less in the service and the manufacturing sectors. In the economy as a whole, informal employment accounted for 92.54 per cent. Most labour laws apply to the manufacturing sector, and we see here that it could at best cover 10 per cent of total employment in this sector. According to Papola et al. (2008), the proportion of workers eligible to be covered (as per laws’ definition on coverage of workers) in the total workers estimated in 1999–2000 was the highest, that is, 38.1 per cent in the case of the Minimum Wages Act, 1948, and for all other important laws, it ranged from 2.2 per cent to 10.5 per cent. Seen in terms of the status of workers, the self-employed workers constituted a little more than half (52.2 per cent) of the total workforce in 2011–12, while the casual workers 29.92 per cent and the regular workers 17.86 per cent. We see that informality is already built into the labour market in terms of ‘non-coverage’ of most of the workers by any applicable labour laws and in this sense it is a fundamental governance failure.

The tremendous rise in the share of contract workers in the total employment in the post-reform period reveals informality (often referred to as ‘contractualization’) also in the organized factory sector in India (see the Fig. 1.1).

Fig. 1.1

Percent share of contract workers in total workers in the organized factory sector, 1990–91 to 2013–14. Source: Various issues of the Annual Survey of Industries, Ministry of Statistics and Programme Implementation, Government of India

3 Post-reform Period, 1991 Onwards

In a concrete sense, economic reforms concerning domestic and external economic aspects began since 1991. The economic reforms came to be introduced under duress as India secured financial assistance under the structural adjustment programme (SAP) loan facility from the International Monetary Fund (IMF) which imposed conditionalities covering fiscal, monetary, trade and labour market governance. These conditionalities are built on the premises of a ‘neoliberal perspective’ which calls for deregulation in the product and the labour market apart from calling for state retrenchment. (see Shyam Sundar forthcoming, for a full discussion of these aspects). In the domestic economy it simply means complete liberalization of the product market and privatization, and on the external front it includes measures like free trade and investment (both portfolio and productive). With respect to the labour market it means liberalization of labour laws and labour market governance. In a basic sense these affirm the neoliberal idea of globalization. (see Das 2015; Patnaik 2014). There exists revisionist as well as augmented versions of neoliberalism which are based on the Washington and the post-Washington Consensus (see Shyam Sundar forthcoming). More importantly, neoliberal perspectives argue that labour institutions such as labour laws and other regulations, trade unions and collective bargaining, etc. impose ‘rigidities’ on the working of the market forces and thereby produce adverse outcomes in the labour market such as unemployment and rise in informality, which eventually hurt economic growth, and these in turn affect workers’ welfare (e.g. see OECD 1994; Besley and Burgess 2004). So, neoliberal agenda, among others, calls for flexible labour market and weakening of collective institutions and in a sense restoration of class power in favour of capital (see Coates 1999; Patnaik 2014; Harvey 2007; Das 2015).

Employers (both domestic and foreign), pro-market academics and the global financial institutions have exerted tremendous pressure on the government to introduce labour laws and governance (inspection and administrative) reforms. Specifically, their demands are broadly the following: amend the labour laws to provide freedom to hire (contract labour for all activities, irrespective of whether they are core or non-core, fixed-term employment, etc.) and fire (remove the clauses providing for prior permission from the government for retrenchment of workers and closure of firms), and to enable employers to freely take decisions on work organization like introduction of new technology, liberalize inspection system to remove corruption and harassment and simplify labour administration (records maintenance and returns submission to the government), and simplify and codify numerous labour laws (e.g. see FICCI-AIOE 2005; Shyam Sundar 2015, 2018a).

The government has been convinced that reforms of labour laws and governance are necessary for two reasons. It has clearly accepted the arguments of global financial institutions like the World Bank that such reforms will, among others, promote ease of doing business in the economy to attract foreign investment and promote employment. This argument has received academic support which has faulted labour institutions such as labour laws, trade unions as imposing ‘rigidities’ in the free working of the market forces and as obstructing employment generation (e.g. Fallon and Lucas 1991; Besley and Burgess 2004 (BB); Ahsan and Pages 2009), though these studies have been challenged (Bhattacharjea 2006; Guha 2009; Sarkar and Deakin 2011; Deakin and Haldar 2015). For example, Sarkar and Deakin have shown that labour laws (including their amendments) are in fact institutional ‘responses’ to wider economic factors (say unemployment) rather than the obverse of it (Deakin and Haldar 2015). It is important to note that while a stream of macro-econometric studies that were conducted since the 2000s followed the BB methodology and arrived at conclusions which are not materially different from those of BB despite the so-called revisions in the BB methodology done in response to strident criticisms by Bhattcharjea, among others, much of the Labour Economics academics ignored the findings of the two micro-level studies by Prof. L.K. Deshpande in association with others (see Deshpande et al. 1998, 2004) and a series of studies done under the supervision of and by Prof. T.S. Papola on labour regulation covering select states and sectors which run contrary to the BB-led pro-flexibility argument. Deshpande et al. conducted micro-level studies first in Mumbai and later at the national level—in the case of the latter, they collected information on employment and its composition and other economic and industrial relation variables from 1300 firms in 9 industries in 9 states in India—to analyse employment growth and its composition and determinants. Micro-level studies are more pertinent as decisions regarding employment and its composition, wages, collective bargaining, introduction of new technology, and so on are taken at the firm level and aggregated macro-economic data cannot distil these. Hence their findings assume far greater importance, even economic significance, than usage of macro-level secondary data. Notwithstanding the rigid labour market and an oppressive IRS, employers were able to change their employment at will (increase or decrease) and those who increased their employment levels did so by increasing the share of non-permanent employees in the total. They also found that trade unions cannot be faulted for much of the ills that are generally associated with them and in fact they aided better wage levels to non-standard workers as compared to those in the non-union firms. Their studies remain duplicated and they continue to question the relevance of aforementioned labour flexibility studies. On the other hand, the studies conducted by and under the supervision of Prof. Papola showed, as noted above, the potential and the actual coverage of labour laws is quite low and in states like Andhra Pradesh (previously called), Maharashtra and West Bengal labour regulation did not adversely impact growth or capital and more worryingly these states had already begun to deregulate labour market governance in various ways. But at a policy level, the Ease of Doing Business surveys by the World Bank and the pro-labour flexibility studies have proved to be more decisive as employers and popular media used them as powerful lobbying tools while trade unions solely depended on their street protests instead of supplementing them with intellectual arguments (see Shyam Sundar 2017 for a detailed discussion of trade union strategies and an agenda for them).

The state is caught up in a dilemma as, on the one hand, there is pressure from the employers who threaten that if an enabling and conducive flexible labour market environment is not provided they would either not invest capital in India or relocate firms to the countries which assure these conditions (flight of capital argument), and, on the other hand, major labour reform measures will have political and social costs as unemployment and austere terms and conditions of employment (resulting from flexible labour market policies and practices) will mean political unpopularity and possible electoral reverses and social disruptions (mass politics argument) (see Varshney 1999). Trade unions have been protesting against the labour market reform measures stridently (see Shyam Sundar and Sapkal 2017 for details of union protests and their perspective). This has given way to some complex and interesting state policy dynamics (Bardhan 2002). However, it is clear from various pronouncements of the government that it is committed to promote a flexible labour environment and liberalize labour market governance and, in fact, have introduced reforms at the central and the state levels and propose to introduce far-reaching reforms in future (see the contributions in Shyam Sundar 2018a, for a comprehensive discussion of the reforms and the pros and cons of them). As a result, the equation between State, Labour and Capital has significantly been redefined in favour of Capital and with a stress on Market as this is seen to be the only hope for economic growth, which, in turn, will lead to promotion of workers’ welfare.

Of late, debates on the extent or absence of employment growth have been raging in popular media, thanks largely due to the absence of credible database. The debates have significant political significance and even undertones. Academics who seek to support the ruling government use database of registrations under employees’ provident fund, national pension fund and employees’ state insurance (Bhalla and Das 2018; Ghosh and Ghosh 2018). Others have used Labour Bureau’s Quarterly Census of Employment (though with limited coverage of eight sectors) and the Centre for Monitoring Indian Economy (CMIE) database to show that employment growth has slowed down during the last few years of the National Democratic Alliance (NDA) rule (Abraham 2017; Vyas 2018b). The claims of employment growth by Bhalla and Das (2018) and Ghosh and Ghosh (2018) have been contested by several who typically argue that social security database being limited to covering primarily the organized sector cannot be used to assess job creation, and they may at best show formalization of jobs (see Nagaraj 2018; Kapoor 2018; Vyas 2018a). There is also an argument that two sectors, viz. traditional construction sector and the emerging industries like information technology (IT) industry and IT-enabled services (ITeS) and IT-using industries like online labour and platform-based services offer tremendous employment generation possibilities, but these are mostly informal jobs. Hence, there are two issues here: first, there are disputations on the numbers of employment generated and, second, on the quality of employment generated. The recently leaked National Sample Survey data shows even the numbers such as unemployment rate show dismal labour market context during the last few years of the NDA rule.

Further even though there are studies that have showed or debated on prevalence of informality in the labour market, decline in union power, role of trade unions and the adequacy of governance of industrial relations, presence and growth of flexible jobs and jobless growth (apart from the studies quoted earlier, e.g. see NCEUS 2009; Breman 2001; Papola 2013; Kannan and Raveendran 2009; Sengupta 2003; Sapkal and Shyam Sundar 2017), there is a need to investigate further on some of the issues arising out of them. We need to understand (a) the characteristics of informal firms; (b) the institutional behaviour of regulatory institutions; (c) the incidence, determinants and specificities of dimensions of informality; (d) the facets and processes of generation of precarity and the role of regulatory institutions in these processes across sectors and occupations; (e) the dynamics in relation to organizing of workers in informal economy and the nature of governance of employer-employee relations; (f) the characteristics and determinants of jobless growth; (g) the policy alternatives available; and (h) the dynamics of labour law reform processes. The articles in this book address all these issues. They, in fact, will advance our understanding of the current debates on both the quantity and quality of employment generation and in a larger sense the very underlying intellectual currents that inform the policy choices and the managerial strategies in the post-reform period. The ongoing debates on the quantity and quality of employment generation reiterates the need to study various aspects of the labour market and the IRS, as mentioned above, so as to add to the knowledge base to enable a more informed assessment of labour market and economic policies. These are aspects that have concerned Prof. Lalit Deshpande and in many senses this book will be a fitting tribute to his scholarship. This can be seen as a complementary contribution to the contemporary debates as I am editing another book which critically looks neoliberal globalization at an ideational and in a comparative institutional framework (see Shyam Sundar forthcoming). This book assumes importance in the wake of the articulation by the global community to achieve Sustainable Development Goals (SDGs) which among others include ‘Decent Work and Economic Growth’, viz. “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” (http://in.one.un.org/page/sustainable-development-goals/sdg-8/, Accessed on 28 October 2018).

It is in these contexts, we situate our book by (a) mapping and understanding informal labour in India and the role of labour institutions (Part I), (b) describing the facets and processes of precarious labour in various sectors/industries/occupations, both traditional and emerging (Part II), (c) inquiring into the dynamics of industrial relations and of organization of workers in both formal and informal sectors and labour rights in the context of developments in the labour market (Part III) and (d) examining the sources of jobless growth and labour market trends on the one hand, and describing the industrial relations, labour laws and employment policies on both critical and prescriptive notes (Part IV).

4 Part I: Mapping and Understanding Informal Labour

As has been shown earlier, informal sector accounts for a large amount of employment even in the manufacturing sector. Raj and Sen, in Chap. 2, use unit level data on the informal sector firms drawn from the National Sample Survey Organization (NSSO) surveys on the unorganized manufacturing sector for four years, 2000–01, 05–06, 2010–11 and 2015–16 to describe the economic characteristics of enterprises in the informal sector to fill in the vital gap in the literature. One of the important arguments for labour law reforms in India has been that firms do not have incentives to grow in size from small via medium to large primarily due to high regulation costs (the ‘missing middle’ argument). They provide solid support to this as they find crowding of firms just around the ‘formal legal threshold’, and these firms do not wish to invest in plant and machinery. The authors hazard an explanation along the regulation cost theory, viz. employers in and around the threshold frontier apprehend higher costs of regulation should they transit from informal to formal sector (say covered by the Factories Act, 1948). The huge hesitancy effect on the part of employers surely hurts economic efficiency as regulations prevent small firms to grow bigger to reap the economies of scale and realize allied outcomes like higher productivity. Such a transition is beneficial for the workers also as they show that wages are higher in formal sector establishments (attributable according to the authors to higher productivity and better human capital endowments of labour) than in those in the informal sector. This means a direct and significant correlation between labour productivity and wages. More damaging is the other finding which shows that firms owned by socially less advantaged like Scheduled Castes (SCs) and Tribes or other backward communities (OBCs) employ less workers and report lower levels of productivity, and these may, in their words, constitute “social barriers to firm growth in informal manufacturing in India, which restrict the participation of socially disadvantaged groups in the growth process of the economy”. So, two policy conclusions that emerge from their detailed analyses are, (a) design policies and reform governance structures that aid upward progression of establishments (reforms relating to ‘predatory’ regulation); (b) policies that directly help establishments owned by socially marginalized classes which will promote an inclusive developmental process.

In Chap. 3, Singh, Das, Abhishek and Kukreja take forward the critical arguments raised by Raj and Sen with regard to the rent-seeking nature of the regulatory institutions—it is trade unions that are rent-seeking regulatory agencies for Singh et al., while it is the state agencies for Raj and Sen. It is well known that statistics relating to trade unions are ‘bad’ and useless. Hence, they collected data on trade union’s presence/absence (which becomes their dependent variable) and host of economic and institutional characteristics of firms (which become their independent variables like output, labour costs, etc.) in their World Bank—funded project ‘Jobs and Development’ 2014–16. They add a revised version of BB index measuring labour regulation regime to their list of independent variables. The survey covered seven industries, viz. auto components, electronics, electrical equipment, leather products, textile and apparels and food processing. The results show that the union’s presence is less likely to be in a firm if it is a micro, small and medium enterprise (MSME) or is labour intensive (measured by share of labour to total costs). Then, they infer that given that these firms are less likely to generate ‘surpluses’ for a trade union to invest in unionism in them, that is, the chances of rent-seeking (returns above the competitive levels) are much less in these firms, and hence trade unions would typically avoid them. More importantly, they are more likely to be present in firms where the share of production workers in total is higher and in firms in states which are classified as pro-labour and in those which employ more contract workers. The latter is a puzzle, and I leave it to the readers to read the chapters in the book to see some interesting explanations for this and other findings. Be these as they may be, here, we have another neoclassical interpretation of labour institutions in neoliberal India.

We have noted that informalization and contractualization of jobs are two dominant features of employment in India in the post-reform period, which are argued to be outcomes of rigid labour regulations, principally due to the employment protection clauses in the ID Act (employee protection legislation (EPL) argument). Goldar and Aggarwal seek to map the temporal (trends) and spatial profile of informalization and contractualization of labour in the organized manufacturing sector and investigate the reasons for the rising informalization/contractualization of labour in it (Chap. 4). They use the unit-level data from NSSO’s Employment and Unemployment Surveys (1999–2000 and 2011–12) and the Annual Survey of Industries (ASI) data (for the corresponding years) for the organized manufacturing sector. They also use revised versions of BB Index in their quantitative exercises. They define ‘informal workers’ as workers in the proprietary and partnership firms, except the regular and salaried workers with social security and all other unpaid family workers, all casual workers and any other workers without social security working in government/public sector, public/private limited company and cooperative societies/trust/other non-profit institutions and ‘contract workers’ as those employed in accordance with the provisions of the CLRA Act.

The interesting aspect of their mapping of precarious labour is when they compare contract labour employment with informal employment across industries. They find negative correlation between the two types of employment though insignificant. The inverse is problematic which may be due to statistical (i.e. the NSSO data are from household survey, while the ASI data are from enterprises) or substantive reasons (labour regulation regime). Their simple cross-sectional analyses of informal/contract employment shares classified by labour regulation regimes show that EPL regime does not lead to informalization but contractualization in the organized manufacturing sector.

Their econometric examination of the EPL argument by using the unit-level NSSO data (Model 1) and unit-level ASI data (Model 2) along with the labour regulation regime proxies (mentioned earlier) shows that labour regulation regime does not lead to informality, whereas it causes contractualization of employment in the organized sector. The apparent conflict in the results could after all be attributed to statistical reasons (directly employed workers in the ASI factories do not ipso facto mean permanent workers) rather than to substantive causes, and they submit that the absence of informality effects “depends on a bigger set of factors and the impact of labour regulations is probably not strong”. It is worth recalling here that Lalit Deshpande et al. (2004) study shows that non-permanent workers (casual and temporary only and not contract labour) increased from 32.23 per cent in 1991 to 36.47 per cent in 1998. So equating directly employed workers as permanent workers will be questionable. This empirical reasoning becomes stronger when we find that firms employ large numbers of non-statutory trainees (not statutory apprentices) under various skill promotion schemes (e.g. ‘earn while you learn’ in Maharashtra or National Employability Enhancement Mission (NEEM)) in the shop floor on regular tasks (see Patwardhan 2016 on NEEM).

According to Sapkal and Chhetri in India (Chap. 5), precarious work needs to be interpreted widely as there exists heterogeneity in the informal economy. Their chapter is interesting for two reasons—their methodological innovations and their findings. They use NSSO data (2004–05, 2009–10 and 2011–12) to classify workers using six indicators, viz. type of employment, non-existence of written employment contract, the low probability of finding longer tenure, limited duration of employment contract, non-coverage under social security like provident fund and medical insurance coverage and absence of access to voice mechanisms, that is, trade union membership. On the basis of these, they identity six forms of securities, viz. income, labour market, employment tenure, social security, skill and voice. More interestingly, they use cluster analysis to classify jobs into ‘high-intensity precarious jobs’ and ‘low-intensity precarious jobs’, and their classification would arguably imply that the ‘ideal job’ that the industrial society in the advanced countries once cherished is a thing of the past as deterioration of quality of jobs to the authors is persistent. Their results generally endorse our understanding of precarity, high incidence of absence of formal employment contracts, poor voice security, disadvantaged status of women workers, and so on. If we imagine that workers in the organized sector enjoy all forms of securities, then Sapkal and Chhetri correct us by showing that workers in this sector enjoy higher levels of employment tenure and social security but fare very poorly in terms of income, labour market, skill reproduction and representation of securities mainly because of high presence of informal employment. What bothers is the poor scores on skill reproduction which could have long-run implications for human capital formation. Their estimation shows that at an aggregate level, double the proportion of workers in the formal/organised sector enjoy at least one form of security as compared to those in the informal/unorganized sector. They also argue that workers are often trapped in the basket of insecurities, and hence precaritization is structured into the jobs. Based on their results, they call for targeted policy actions by the state to ameliorate the conditions of employment concerning those who are more probable to land up in informal and precarious jobs. This adds to the debate in this section as we have evidence to support neoclassical as well as institutional perspectives.

5 Part II: Profiles of Informality and Precarity: Industry and Occupational Studies

The chapters in this section seek to profile the characteristics of informal and precarious labour in traditional (plantation, construction), modern industries (automobile), emerging sectors (IT and IT driven sectors like online labour markets) and informal occupations like domestic work and anganwadi work. This section is a revelation in several senses, viz. informality and precarity characterizes work across occupations, industries and sectors irrespective of whether they are traditional or modern; pathetic apathy of law enforcement or administering agencies or lack of regulations concerning workers; and in both traditional (anganwadi and domestic) and modern (online or gig economy) jobs, there is an ‘existential or identity crisis’ in the sense they are not yet recognized as ‘workers’ either by the government or in the law. These field studies constitute powerful investigations often amounting to even interrogation of the presence or absence or even inadequacies of labour institutions, and they, in fact, make a powerful plea for creation and restructuring of regulation if India is still committed to the promotion of decent work as informality and precarity amount to significant decent work deficits.

Plantation is one of the oldest industries and also somewhat well organized. Vijayabaskar and Viswanathan (Chap. 6) detect precarious working (lower wages and benefits, etc.) and living conditions in the plantations despite the presence of labour institutions, viz. the Plantations Labour Act, 1951 (PLA) and generally high unionization rates in them. They recount two events that occurred in 2015 that shook the workers’ world, though differently: in the eastern Darjeeling tea estates an estimated 1400 workers died of starvation, while 5000 odd women workers in the tea estates in Munnar in Kerala conducted a valiant struggle for nine days shunning aside the intervention by the Communist union and political leaders. Both have a story to tell and that is the impact of globalization and the consequent governance failure in this old industry which is facing severe crisis. Planters have argued that profit rates have been declining in the globalized economic environment due to several factors like falling prices of plantation crops at the global level, cheaper imports, higher cultivations costs at home, ageing of bushes, lack of capital infusion, and so on. Put briefly, plantations justify deterioration in conditions of employment due to economic crises. But the authors contest these arguments.

They argue that corporate strategy and governance failure are responsible for the crises apart from planters’ trade arguments. According to the authors, several larger planters like Tatas and Unilever have ‘abandoned’ production of plantation crops and positioned themselves in the high value-adding segments in the value chain like wholesale or retail to reap greater returns. On the other hand, the planters have relocated to sectors other than plantations. The implementation of PLA has been weakened in the post-reform period. They observe that the planters have used economic crisis as an excuse to increase the employment of non-standard workers and mechanize production (mechanization of tea leaves plucking). Then, it is not surprising that wages in gross value added in this sector should have declined over the years (i.e. rise in productivity not matched by rise in wages). As typical of flexibilization strategy in other sectors (see Shyam Sundar 2018b, c), planters have fragmented the estates to less than 10 ha so as to ‘bypass’ labour regulation—PLA is applicable to estates having ten or more hectares. Fragmentation has also been strengthened by the state policy of aiding small growers’ model to address the ‘rural distress’ problem. Thus, state intervention and flexibility strategy of big planters have led to deregulation. This was a double folly as small growers stand to suffer from falling prices (result of free trade), and due to fragmentation, casual labour employment rose considerably. The authors do not merely analyse the problems but also indicate possible alternative models, like using organic methods and combining tea cultivation with cultivation of native herbs and trees, developing small grower collectives such as self-help groups (SHGs) and primary producer societies (PPSs), renovation of local water bodies, etc.

Globalization has led to informality by creating supply chains which are deep and wide, and the supply chain extends to even home-based workers. In Chap. 7, Kerswal and Pratap analyse the labour conditions across the supply chain in the automobile industry on the basis of the primary data collected using semi-structured interview schedule from the stakeholders, viz. managers, workers and the union leaders in the two major industrial clusters of Haryana, Gurgaon-Manesar and Faridabad-Ballabhgarh. Though they note existence of several forms of informality (contract workers or union absence) in the lead firm and the firms in Tier I and Tier II, their dynamics differ due to economic and managerial aspects. Unstable commercial contracts, lower bargaining power thanks to ever-present threat of underbidding by competitors, slim margins, high labour turnover, etc. push the firms located at the lower tiers to resort to all forms of informality, including non-registration of their firms under relevant labour laws. While labour law compliance is fine at the higher levels, they deteriorate as we move down the supply chain. So here ‘informality’ is actually worsened or ‘generated’. Their section on labour law compliance alone is sufficient to prove that informality is ‘generated’ and not inherent because of structural (business) reasons. The lesson is more serious: it is entirely unreasonable that firms at the top level should resort to rent-seeking behaviour even using unwarranted flexible labour production regime, while firms down the supply chain squirm in economic stress and hence are forced to create informality.

Secki (Chap. 8), Joseph (Chap. 9) and Noronha and D’Cruz (Chap. 10) engage the readers on the issues concerning existing and rising precarity in the emerging industries. The spectrum of IT industry has been in the news for all the wrong reasons in the recent months as large companies like Tech Mahindra, Tata Consultancy Services, Cognizant, etc. have been retrenching a good number of employees for various reasons. Secki has collected information from stakeholders, viz. workers, managers, trade unions and state government officials during his field study conducted during 2016–17 in Bengaluru. IT firms hire contract workers for low-end to high-end jobs, and this employment carries rights deficits like shorter and unpredictable tenure, absence of social security, non-accessibility of employee stock ownership and salary differentials. When the labour market is tight as it was in the IT industry either in general or for some skills, quitting companies constituted a source of ‘power’ in a capitalistic firm for the employees, and they have used this labour market option to improve their terms and conditions of employment. The high quit rates constituted a big managerial challenge as the managements needed to adopt strategies to extract ‘labour services’ from the ‘remaining employees’. During the times of economic buoyancy, IT industry resorted to higher employment than necessary, and hence they created a kind of ‘reserve army of unemployed labour’ in the internal labour market (as opposed to that foreseen by Marx in the external labour market), and this has been euphemistically called as ‘benching rate’ in the industry. Benching constitutes precarity in several senses like denials of training during normal periods and participation in live projects and so on. Secki notes that ‘exiting workers’ in the IT industry are ‘required’ or even coerced by not issuing experience and referral letters to train the benchers during their notice period. In this sense, training responsibility is shifted amongst employees in an intra-class sense. According to Secki, these constitute managerial processes of control over employees and transactions in the internal labour market. He further argues that in the current context, the employer-initiated separations have gained more prominence, which has its own dynamics rooted in the labour processes as these actions constitute the site of conflict. Lay-offs have become a challenging issue for IT employees, and in that sense, it has penetrated their psyche to a large extent. For a long time, employers in the industry exploited the ‘ambiguity’ about the applicability of labour laws on firms in this industry and created a psychological environment which has created an abiding sense of vulnerability in the minds of IT employees which explains the failures of a few initiatives to organize them. Further, IT capital leveraging on the threat of relocation has secured explicit and implicit concessions from regulations. It is now well known that labour resistance is gradually growing stronger and has given rise to voice institutions in this industry. But given the chequered history of collectivization in the IT industry, Secki prefers to be cautious of its ‘momentum’.

It is here that Joseph’s chapter seeks to provide answers. The quest for ‘voice’ arises according to Joseph for various reasons, from a mere self-defence to adversarial context to revolutionary (provided the system is politicalized as Marxist-Leninists saw). His main argument is that the conditions in the IT industry provide ample scope for emergence of voice mechanisms despite the “much touted professional identity” (Noronha and D’Cruz 2009) which he brushes aside as a ‘false consciousness’, as they reflect the ‘class politics of social processes’ in neoliberal exploitative spaces in the IT industry smartly engineered by neo-HR management (HRM) regimes. Tensions are immanent in this industry as the managerial class seek to tighten their control, even noose over employees, at the workplace to strangle voices. Joseph decodes the neo-HRM strategy as creating a ‘deliberative insecurity’ in the sense that its intentions, calculations and the articulations are clear, and it signals that the target radar is wide as anyone can be the next ‘victim’. The labour processes that are adopted by the neo-HRM brigade betrays their neoliberal article of faith of appropriation and precaritization—for example, employee consent in the employment contract giving license to HRM officials the freedom to terminate is indicative of this. He sees the working of a hegemonic control of HRM over the employees during the entire work processes in the industry, and in this sense, exploitation is structurally incorporated in it. Hence, this industry is a modern site of precarity, and I quote him here: “Precarity is not just a series of random episodes of a few employees here and there but an all-encompassing state of the work context engineered by the policies and practices of the ‘deliberative insecurity’ design of employment relations.” There is a twist to this neo-HRM hegemony, in that dismissals by it are done with deep disdain for employees as they are driven by the so-called performance appraisal which begs many questions as far its legitimacy is concerned, forget its legality. The entire architecture of industrial jurisprudence so painfully constructed after decades of labour struggles in India has been blown to dust by the neo-HRM practice in this industry. In this entire structured deliberative insecurity exercise, employers’ strategic failure of not moving up the value chain to reap the benefits of technological advances is carefully hidden from the anti-collectivist flight of capital alarmist discourses. The dominant discourse by employers has been to associate permanency with inefficiency to legitimize deliberative insecurity regime and the same is perpetrated by de facto deregulation save in some states in the case of IT industry. But the game is not over. Voices are emerging and will emerge, thanks to the dynamics of thesis creating its own anti-thesis.

Use of IT has led to modern forms of work which are conveniently collected under the terms ‘gig economy’ or ‘platform economy’. The growth of gig economy is phenomenal across the globe; they are raising various issues amidst others relating to regulatory concerns and even identity of players in them. It is in these contexts the chapter on online labour markets (OLMs) by Noronha and D’Cruz assumes vital importance. OLMs (jobs such as micro-tasks, skilled work and innovative projects which are undertaken online through platforms which connect indefinite numbers of clients and freelancers, often across borders) have players on the demand side (clients) and the supply side (freelancers) and the mediating platform. They interviewed 24 freelancers (15 full-timers and 9 part-timers) telephonically at Upwork OLM who are spread over in 13 cities and covered 5 aspects involved in such work such as seeking and finding remunerative jobs, building reputational and relational capital, facing fraud, abuse and discrimination, and contemplating the future. The mediating platform steers clear of financial or legal or any liability in the tasks that are performed by freelancers for the client. OLMs acquire increasing significance as it aids capitalism in terms of wider market access and profit maximization, while shielding the players on demand and supply sides from regulatory hazards. So what else does capitalism require? At the same time, these features reflect utter precarity, thanks to invisibility, shortness of tenure and anonymity of the people involved in these transactions. Those involved on the supply side (freelancers) need to build on networks and build track record of efficiency.

The authors are clear and vocal when they observe that OLMs involve everything that defy our conceptions of ‘standard employment’ and hence suffer from acute decent work deficits, and these are accentuated by abiding power imbalances and absence of regulation in this virtual economy. They detect vulnerabilities suffered by the freelancers (supply side), owing to the working mechanisms in the OLMs. They provide many examples. Seeking and finding jobs involve bidding which is naturally competitive, and part-timers are obviously at a disadvantage in this aspect. Bidding is characterized by two disadvantages, viz. bidding zones could be extended (for increasing the prospect of clinching a contract) on payment (which may be an investment or a cost), and competitive bidding is based on ex-ante perception of lower costs to clients and biddings suffer from inherent downward bias. The biggest hazard could be with regard to payment realization! Building reputational and relational capital involves all the hazards that are involved in securing bids which implies some sense of longevity, and unless the freelancers thrive, they cannot build it—so a vicious cycle may prevail. Since clients have capital and projects and freelancers are out to prove themselves, obviously, there is a power imbalance. Then, it is not easy to imagine that several naïve (read inexperienced) freelancers could face fraud and racial discrimination—discrimination probabilities are higher, thanks to the cost arbitrage that could exist as freelancers from the South could underbid those in the North! Bullying is common in OLMs due to power imbalance and the racial divides which influence ‘perceptions’ over competencies of those disadvantageously placed not due to their labour market capabilities. Secki, Joseph and Noronha and D’Cruz so ably analyse and discern social, managerial and structural processes prevalent in modern industries and their analyses should alert the readers that informality is simply ubiquitous and hence pervade the world of work irrespective of sites of work, physicality or virtuality of spaces or nature of work (dirty and sweaty [say street vending] or sophisticated [involving algorithms]).

Platform economy arrangements of work such as Ola, Uber and so on are another segment of gig economy, and they have been flourishing in India. It is pertinent to note that several of those working on these platforms like Ola and Uber have gone on strike several times in several spaces demanding improvements in the terms of contract (see, e.g. Sundaram 2018; Times Now 2018). The central controversial issue is whether the Ola and Uber drivers are independent contractors with or employees of cab aggregators, and the Supreme Court (SC) in India is seized of this issue (ToI 2017). Cab aggregators have argued stridently not only here but elsewhere also that they merely provide technological assistance to the drivers to connect with riders on demand, and hence the drivers should be termed as independent contractors. On the other hand, it has been argued that these drivers are employees of the cab aggregators as passenger allocation, monitoring of performances and even disciplinary action following the downgrading of the drivers are taken by the aggregators. These debates have held considerable academic and judicial attention in the US and the UK, and in this book, K.V. Ramaswamy (Chap. 11) reviews the developments in the US to enable India to take lessons from them. Such a review is important as gig economy has promoted precarity even as its proponents have argued that it expands and maximizes consumers’ choice and the taxi drivers’ welfare.

The word gig refers to a job that lasts for a short period of time and characterizes on-demand employment. Gig workers comprise delivery people, personal assistants, cleaners, drivers, cooks and the list is endless, and such works typically depend on organization of work and standard of living in the core urban economy. In the US, a company is required to issue W-2 Form to their employees on payroll and make tax deductions at source. However, they issue Form No. 1099 to report payment for services of their non-employees and 1099-Miscellaneous to those who are independent contractors. Uber issues such forms to its drivers. This practice results in an estimated 30 per cent savings in the companies’ labour costs as the companies need not provide all kinds of work and social security benefits and compensations. More importantly, they are denied trade union and collective bargaining rights under the National Labour Relations Act, 1935. Owing to differing legal principles or interpretations, the Courts in the states in the US have arrived at differing conclusions with reference to the cases relating to Uber drivers in different states in the US—for example, in California, they are deemed to be employees, while in Florida as independent contractors. Ramaswamy discusses a couple of alternatives to these vexatious judicial routes such as deeming those working in the gig economy as independent workers (not as direct employees or contractors) or creating a portable ‘social security bank’ to which hiring companies will contribute on a pro-rata basis; hence, the ‘status’ of persons hardly matters and at least social security access and assurances are fulfilled—by the way, these schemes have evolved from the workers’ side! Trade unions may pounce on this as a ‘limited rights arrangement’ as this focuses principally and even solely on social security and not on other germane rights. Anyway, Ramaswamy has done a comprehensive review of the proceedings (judicial or otherwise) with respect to finding out some institutional arrangement to safeguard at least some aspects of work life.

What are the lessons for India? As he notes that social security coverage in India is quite limited and even though contract workers are covered under social security laws, it is well known that they eventually are deprived of it and this has been observed by the Second National Commission on Labour—SNCL (2002). The classical stance with respect to contract labour in India has been that the principal employer (user enterprise) is eventually responsible for all the welfare aspects, including the social security benefits of workers engaged by the contractors of that principal employer. However, the Delhi High Court has, in 2011, ruled in Group 4 Securitas Guarding Ltd v. Employees Provident Fund Appellate Tribunal & Ors. (https://indiankanoon.org/doc/50495115/, Accessed on 21 October 2018) that when the contractor is an independent legal entity with a separate social security code, he/she will be legally responsible and not the principal employer. Though this is a High Court judgement which is operative in its territorial jurisdiction, this is most likely to be cited in disputes elsewhere. And as noted earlier, the Ola and Uber legal cases are pending legal review in the apex court. Ramaswamy has highlighted two facets of precarity in his review of debate in the US and a brief discussion on the labour market in India, viz. technological advancements are leading to reorganization of work in such a manner to render standard employment increasingly irrelevant, and judicial pronouncements could divide the line between informality and standard employment. Then, in the absence of laws to determine the standard aspects of emerging work arrangements, we could from the US controversies learn to use technology to ensure a portable and widely accessible social security system. This is something, though limited in its canvas, which could be useful for the policymakers to mull over.

The government after considerable pressure from the workers’ organizations (National Campaign Committee on Construction Labour [NCCCL]) enacted the Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act in 1996 (BOCW Act) and the complementary legislation Building and Other Construction Workers Welfare Cess Act (Cess Act) in 1996 even though as Hittanagi points out that construction work is as old as civilization! If the readers assume though not due to their fault that these two laws would have taken care of the welfare of the construction workers, they are hugely mistaken. Hittanagi’s principal contribution to this book (Chap. 12) is to bring out the dimensions and dynamics of precarity of construction workers despite existence of regulations. Ever since these laws have been enacted, construction workers and their associations have had to knock at the doors of judiciary seeking judicial intervention to have these laws implemented!

Since most state governments and the Union Territories (UTs) did not even constitute welfare boards as was stipulated in the laws, in 2006, the NCCCL filed a public interest litigation (PIL) in the Supreme Court, seeking its intervention for ensuring effective implementation of the two laws in them. The Supreme Court directed the central and the state governments to frame and notify Rules for the implementation of the Act, set up the Boards and Advisory Committees and ensure holding of their regular meetings. No wonder that Hittanagi, who served as a senior labour department official in Karnataka overseeing the implementation of the two laws, has nothing, literally nothing, good to say as far as the implementation of the two laws are concerned. He narrates the woeful conditions of work and living of construction workers (inferably in Karnataka where he worked but applicable elsewhere too) and the indifference of the government authorities, the builders and other employers involved in this sector. He had had to take proactive measures and seek informally judicial officers’ interventions, among others, to even register the workers under the welfare schemes in the laws. It is public knowledge that construction sector is most prone to fatal and non-fatal incidents, the former being higher, and most, unless they are terrible accidents, are hushed up. He must know this well enough to say this loudly in his chapter in this book. There is even life insecurity in this industry.

What is galling is that according to the statement made by Bandaru Dattatreya, Labour Minister, Government of India in Rajya Sabha in March 2017 only 21.66 per cent of the money collected under the Cess Act (1–2 per cent of cost of construction is collected as Cess from the builders under this Act) has been spent for the welfare of construction workers (see Economic Times 2017). If the readers of this book are stuck by the use of rather extreme and severe descriptions by the author, they need to appreciate the utter sense of shock and even frustration that dedicated and welfare-oriented senior officials like him must have experienced in the field. Again, that his chapter is not a diatribe against any agency is evident when the Supreme Court on 15 March 2018 observed that the “information regarding the collection and utilization of cess suggests nothing but a complete mess”, and directed all the government agencies concerning labour to establish and strengthen the machinery stipulated under the two laws for registration of establishments and construction workers and collection of statutory welfare cess, within a specified time frame. Further it directed the Ministry of Labour and Employment, the Government of India, to frame a comprehensive model scheme for education, health, social security, old age and disability pension and other benefits for construction workers in consultation with the stakeholders (see Singh 2018 for a reportage of the Supreme Court’s judgement). Arising out of his experience and endorsing the directives of the Supreme Court mentioned earlier, he makes some significant recommendations for ensuring the welfare of the construction sector workers. Since this sector has been touted to be a high employment generation sector, his chapter assumes immense significance.

In Chap. 13, Neetha discusses the adversities faced by the paid domestic workers (in short domestic workers) who are mostly female workers and whose numbers have swelled over the years. She points out that ‘paid domestic work’ is quite different from other forms of paid work, be they full-time or part-time. The peculiarities that characterize paid domestic workers include domination of personal relations, variegated nature of domestic work (live-in and live-out types) and so on. They are performed in private spaces of a household unlike in a registered workplace in the case of other paid work. Hence, governance of domestic work in terms of both union organizing and enforcement of regulations is problematic. Domestic workers are covered by a handful of laws like the Unorganized Workers Social Security Act, 2008, the Prevention of Sexual Harassment at the Workplace Act, 2013, etc. It is pertinent to note that these marginal regulatory coverage have been achieved due to the relentless struggles of these workers. To her, it is these developments that have imparted the ‘language of employment contract’ that dominates the current policy discussions on working conditions and employment relations of domestic workers.

Neetha, drawing on the field study, describes the experiences arising out of a unique model of organizing domestic workers, viz. non-governmental organization (NGO)-trade union-cooperative model which seeks to formalize employment relations and regulate conditions of work of domestic workers. Needless to say, these processes are fraught with tensions on both the supply side (domestic workers) and the demand side (the employers) in the labour market. The central institutional issue she brings out is the hesitancy on the part of domestic workers to move away from ‘personal relations’ forged between them and their employers (masters) over the years to law-enforced or union/NGO-negotiated ‘formal relations’. Personal relations typify loyalty (historically and socially constructed) and also ensure some amount of flexibility for these workers in terms of working hours or holidays and so on. So legalization is neither universally desired nor feasible. Domestic work being rooted in feudal patronage-based employee-employer relations means sustaining of non-wage relations is strengthened even when these workers are organized. Again, when a collective forum created a rate card for work, that is, X amount of money for Y amount of work, which standardizes employment relationship across spaces, underselling of labour power by some workers was prevalent. She offers a rich insight for explaining these contradictions as those who are organizing the domestic workers have “origins in the efforts of people who have a different social and economic background”. Put simply, they might be employers in some other spaces! Another contradiction that typifies this model is that once the organization got involved in recruitment and allocation of labour, market forces tended to dominate these exercises, notwithstanding the efforts to de-marketize them with values and norms. To an economist, the biggest hurdle in formalizing informality is the ever-lingering possibility of cheap labour substituting costly (read union-wage) labour, owing to the contradictions inherent in the economic and social structures. These dynamics at once institutionalize informality and deny space for regulation. Her conclusion is a dark reminder of the challenges that need to be confronted in any efforts in formalizing and empowering domestic workers and I quote her here: “…labour rights and worker identity remains a challenge, even with formal contracts, given the intersectionality of the sector with other axes of inequalities such as gender, class and caste”.

In 1975, the government of India created a programme called the Integrated Child Development Services (ICDS) to combat child hunger and malnutrition. In order to implement this programme, the government need (ed) volunteers and the persons who are women and who offer themselves for this kind of work are called as anganwadi—anganwadi is a Hindi term which literally means ‘courtyard shelter’. An anganwadi is sanctioned for a population of 1000 persons in a village or district, and she is accompanied by a Sevika (worker) and a helper, both women. The anganwadis perform significant social functions while implementing the ICDS programme of the government, such as planning for implementation of ICDS programme (e.g. village mapping, building rapport with the community, conducting community surveys and enlisting beneficiaries, birth and death registration) and so on. They perform other administrative functions also.

However, these ‘volunteers’ are not even now accorded the status of ‘workers’ by the central government, and the money paid for their services is called as ‘honorarium’ and not ‘wages’. Krishnaprasad and Peer have sought, in Chap. 14, to narrate their struggles among others for the basic issue of securing ‘worker’ identity (which will bequeath on them other entitlements) for these volunteers. There cannot be a more sordid story of informality and precarity than that very elaborately narrated by them in their chapter. The central government has recently revised the honorarium of anganwadis and others marginally (ToI 2018). However, the authors observe three disturbing aspects of compensation to these workers (I continue to address them as workers), viz. there are regional variations in honorarium, it is revised at the discretion of the government and there are no automatic adjustments for inflation as in the case of ‘workers/employees’. They provide an elaborate account of their protests, struggles, lobbying and legal struggles to secure just not only their principal demands relating to workers’ status and better wages but also wider social concerns like universalization of the ICDS scheme and non-privatization of it. The very fact that the Government of Maharashtra invoked the Maharashtra Essential Services Maintenance Act (MESMA) to prohibit the strikes and protests by anganwadi workers (AW) in the state at once betrays the cavalier attitude of the government towards these workers and endorses even ironically that their services are indeed “essential” to the society at large!

What can be more damning to these people who have been doing phenomenal and invaluable service to the society in the development of human beings (I am consciously not using the term ‘human capital’ which has a materialistic sense) when the government stridently denies them the status of workers, pay them meagre honorarium and provide crumbs of social security! Why is the government denying them regular government employee status which has long been their demand? This will lead to rise in salary costs for the government as the number of anganwadis will generally increase as per population dynamics and so the Rajya Sabha Committee on Petitions in 2006 did not find it feasible to regularize them as government employees (Rajya Sabha 2006). What is more rueful are the effects of globalization in the sense that the government is proposing to withdraw its involvement in these social welfare schemes (already reflected in cuts in public spending on this) and make ICDS a part of corporate social responsibility activities (read corporatization) and/or shift it to public-private partnership model (PPP). Globalization cannot wring much harsher penalty to the Welfarist State than this!

6 Part III: Understanding Industrial Relations and the Dynamics of Trade Unions and Workers’ Organizations

Now, three questions or issues arise in the wake of the foregoing analyses of regulation or its lack and hence the abiding and fast-rising precarity. In a basic sense, the issue of labour rights assumes critical importance in the era of globalization. Then, we need to understand the issue of labour rights in a broader perspective, both global and with special reference to India. What are trade unions, the vanguard of the working class, doing to organize the informal workers? The more basic question is whether trade unions are withering away in the globalized economic environment? Second, we have read several cases of industrial unrest during the post-reform period, especially during 2005–18 which were characterized by violence on the part of the workers, employers and the government. In some cases, violence has led to deaths on both sides (see Saini 2005, 2016; Shyam Sundar 2012 for a detailed discussion of industrial violence and some case studies of it). There is a debate amongst the practitioners and theorists whether we have to move away from conventional industrial relations discipline to a more accommodative and relevant paradigm, say employee relations or employment relations? In this section, we have three chapters which seek to address some of these questions if not concerns.

In Chap. 15, Reddy seeks to locate the issue of labour rights in a broader context to lead us to understand the issue of labour rights pertaining to India because labour rights in a fundamental sense is intricately connected with developments elsewhere and determined by history. This chapter is an important contribution to and, in fact, an endorsement of the arguments and perspectives that have been put forth in another book edited by me wherein several have critically interrogated the dominant orthodoxy of neoliberal globalization and in fact called for wider action in pursuit of alternatives to it (see Shyam Sundar, forthcoming). In fact, Singhvi (2018) makes a similar argument in an another book edited by me in honour of Prof. Lalit Deshpande. Reddy traces the debates, the global conventions (from the First International onwards) and experiments which eventually have led to establishment of labour rights albeit incomplete. India then and now is organically connected to these developments. What comes out powerfully in his historical and global narrative is that labour rights are not a bounty offered by the ruling classes but hard won, be it enactment of the Trade Unions Act in Great Britain in 1871 or the Chicago movement for eight hours of working day. It is these historical foundations and doubtlessly the crises that marked capitalism that led to the era of statutory regulation during the post-World War II period, 1945–80 as Guy Standing (2003) calls it.

If global forces and institutions coalesced as organically connected to establish labour rights, in the same sense, revival of laissez-faire in the new garb of neoliberalism of global institutions like the World Bank and the IMF imposed neoliberal economic agenda on economically gullible countries in Latin America or South Asia. While the former movement leads to benevolent labour market outcomes the latter seeks to dismantle labour rights in the name of promoting economic growth and elimination of poverty. The irony is that neoliberal economic regimes did not achieve either of the goals as Reddy shows in his chapter. This is once again echoing what Selwyn, Jha, Harriss and others have argued in Shyam Sundar (forthcoming). On the other hand, the annual surveys and reports of the International Trade Union Council (ITUC) show global convergence of dilution of labour rights. Following some of the critics of ILO’s response to neoliberal globalization (e.g. Standing 2008; Breman and van der Marcel 2014), Reddy critically analyses of ILO’s response. They make very interesting reading as also a balanced assessment of ILO’s contribution to the world of work. In fact, like many, he too wonders what could multiple Declarations achieve in these contexts. His chapter assumes greater relevance for two reasons, viz. labour rights are increasingly under attack not only in India but elsewhere and understanding the dynamics that underlie labour rights is important. The year 2019 marks completion of 100 years of ILO and nothing could be so relevant to the centennial celebrations than a detailed analysis of labour rights which form the bedrock of ILO’s pet theme of ‘decent work’ and because labour rights are more likely to be under attack as the nature of work is undergoing radical changes, which are sought to be captured by the future of work debate initiated by ILO as a part of its centennial celebrations. He cites wide range of studies to show that the labour market outcomes in India in the post-reform period have been adverse (informalization and precaritization of labour, wage inequalities, etc.), and they at once reflect and constitute causes for withering away of labour rights. His argument is that in the event of failure of global institutions like the ILO to tackle the negative outcomes of neoliberal globalization, thanks to its soft promotionalism and voluntarism, then labour mobilization appears to be the only credible alternative to assert labour rights.

From the global discourse, we shift to another level to find out whether these have anything to do with the way employer-employee management is managed or even perceived. In Chap. 16, E.A. Ramaswamy argues for moving away from conventional Industrial Relations to Employee Relations and provides two case studies as a support to his argument. He points out that the recent bloody industrial conflicts indicate that industrial relations in the post-reform period is not much different from that which was obtained during the heady days of union militancy and union-busting actions of employers in the 1970s and the early 1980s. To him, the ‘actors’ in the IRS, trade unions and the government and the academia have not been able to understand some significant developments and I mention here two. Firstly, power in the trade union has shifted away from the union leaders to the union members. Secondly, workers have developed aspirations reflecting in their demand for higher wages and career growth and both trade union leaders and the management have failed to appreciate these aspirations if not responding to them adequately.

Basically, neither management nor trade unions has the ability to welcome a change. They stick to the conventional past, so rigidities get built in their handling of matters either in a union organization or in a firm. Both trade union leaders and the management live in the past of ‘political unionism’, but the reality is that workers act like mercenaries who elect and throw out leaders at their will and care for the ‘services’ of leaders and not leadership or ideology. On the other hand, management continues its own brand of rigid thinking that it can exercise its influence even forcedly over workers’ choices of leaders. Further, both unions and management are insensitive to the growing realization on the part of workers about the inequalities in compensation which makes them desire for more wages. So, mismatch on both sides naturally leads to protests and violence.

At a deeper level, do these reflect failures of the classic Industrial Relations (IR) or the new managerial disciplines like organizational behaviour (OB) or human resource management (HRM)? Ramaswamy thinks so. He advocates moving away from these and building what he calls ‘employee relations’ (ER) which in its essence is to break the barriers between workers and the management and build bridges. Why was it not possible in the past? This has not been possible because senior managers rarely visit the plant (little knowledge but with power), and the supervisors (knowledgeable but not having power) cannot be proactive. So ER see human bridges not as a means to materialistic and mathematical targets of productivity but structuring and governing relations between people. ER may sound simplistic even well known but difficult as it is a long-run project. He demonstrates the effectiveness of ER with two case studies with which he was closely associated. It is wise as an editor to leave the drama in the plants to the readers rather than spoiling their fun by summarizing often inadequately in an editorial summary.

Balasubramanian who has studied the working of the workers’ organizations in the informal economy which again like Ramaswamy’s chapter brings about the dynamics of workers’ organizations quite effectively in Chap. 17. Balasubramanian’s basic argument is that trade unions in a generic sense can reinvent itself to assume various organizational forms to suit the context of workers’ organizing which sites are mostly in the informal sector. He argues that there is a need to move away from (a) the classic image of a trade union whose site of operation is a factory and (b) the thinking that a workers’ organization should idealy be registered as a trade union under the rather inept TU Act. Of course, we need to contextualize his study in the wake of talks of declining union membership if not obituaries of trade unions! He argues that there is not only a union revival but revitalization as workers’ organizations are emerging in the vast informal sector.

He has studied intensively the working of three workers’ organizations in the informal sector, viz. Hawker Sangram Committee (HSC), Civil Initiatives for Development (CIVIDEP) and Kagad Kach Patra Kashtakari Panchayat (KKPKP), dealing with street vendors, garment workers and waste pickers, respectively. He has looked into the working of these organizations including their objectives, strategies and so on and finds material to suggest converging divergence, an oxymoronic term which has gained considerable currency after Katz and Darbishire (2000) famously used this phrase to capture the changes taking place in the employment relations in the eight advanced countries. Converging divergence is applicable when processes and the nature of variations are similar even though at the institutional level there are differences. In the context of his study while organizing and fighting for betterment of conditions of work is the commonality, the three organizations have shown differences in terms of the strategies they used (confrontation or building strategic coalitions or empowering the constituents with information) or the organizational forms (cooperative or a society as against formal trade unions as we know of them in the formal factory sector). His basic argument stemming from these three stories is that, following evolutionary biology theory, it is perfectly possible for workers to reinvent their organizational form and strategies suiting the contemporary challenges and will not be bothered about conventional notions of being a ‘registered trade union’ only. In other words, what he means is that alternative legal forms of workers’ organizations are possible which could be registered under different laws say Societies Registration Act or Indian Trusts Act, 1882 (e.g. Nutan Mumbai Tiffin box suppliers). These social laboratory experiments to him constitute challenges to the conventional notion of registered trade unions affiliating themselves to one political party or federation or the other and holding spaces at the national level. The stories he constructs typify in an ironical sense ‘non-standard’ workers’ organization stories engaging mostly women workers and multi-loguing with social institutions (community forums) and using pragmatic and not ideology-dictated strategies. He argues for broadening the conceptual canvas and legal constructs to encompass different varieties of workers’ organizations. Balasubramanian’s study has made encouraging observations with regard to the emerging trends in tackling informality and precarity that has been dominant in the labour market through voice mechanisms.

7 Part IV: Jobless Growth, Industrial and Employment Policies and Labour Law Reforms

It is not often that economic issues, especially labour market issues in India, become political and much less even electoral issues as they have become now. Jobless growth has come to haunt the political class as never before. I have already recorded the debate on jobless growth. There have been macro-notions of jobless growth, and Abraham in this book decodes the jobless growth. He does so by using the official statistics (NSSO and KLEMS database of the Reserve Bank of India [capital (K), labour (L), energy (E), material (M) and services (S)] research project) which fills in the gaps in the literature on it. His basic argument is that jobless growth needs to be contextualized in the structural changes taking place in the economy and also other product market dynamics like relative use of capital and labour. Jobless growth occurs when economic growth (measured in output growth) is not accompanied by commensurate job growth.

In Chap. 18, Abraham makes a fundamental point of departure when he argues that labour participation decision in a developing country is not according to the neoclassical maxim of ‘maximization function’ but dependent on ‘family income’. According to the analytical framework developed by Abraham, there could be disjunction between economic growth and job growth for four reasons of which two reasons are straight forward, viz. capital substituting labour (substitution effect) and systemic dynamics in long run (e.g. reorganization of production, technological changes, etc.). As the structure of economy is transformed, capital-intensive sectors dominate production spaces, which is characterized by higher productivity but require less labour (lower employment elasticity). As a result, as per the Lewisian scheme, transfer of surplus labour from subsistence sectors (read agricultural sector in rural areas) to the modern capitalistic sectors takes place to the point of exhaustion of surplus labour in the former. Surplus labour reallocation leads to capital-intensive efficiency enhancing production techniques in agriculture which leads to higher family incomes and hence withdrawal of family members from work will take place. Further, better functioning of labour and credit markets will lead to better family income, which in turn prompt some in the family to withdraw. But these will read as rise in unemployment even though productivity enhancement has taken place. Thus, low employment growth may be due to three factors, viz. rising capital intensity within sectors, output growth differences between the sectors and decline in participation of surplus labour in traditionally labour-absorbing sectors like agriculture. His other argument is that there could be differences in output growth across sectors, which means that the interface between output growth and employment growth could be mediated by factor intensity and a structural bias towards capital-intensive sectors will mean higher productivity but less commensurate growth in jobs.

Using this analytical framework, he decodes the jobless growth for the period 1993–94 to 2011–12 and the elaborate details of his quantitative work need not detain us here. But to just give a taste of the rich statistical analyses in his chapter, I summarize some aspects here. Of those sectors that witnessed fall in employment, significant decline took place within the primary sector. The secondary sector witnessed stagnant employment growth. High employment generation was seen entirely within the service sector. Thus, he argues, “there exists a functional link between the two types of classifications based on economic activity and employment generation”. He finds that in almost all sectors, the contribution to incremental growth in output surpassed that for employment growth save in those sectors where employment increment was much higher than output. Even in the two sectors that recorded a fall in employment, an increase in output was recorded, even though smaller in comparison to other sectors. In an aggregate sense, there obtained a widening gulf between increment in output and increment in employment. But the damning indictment of the job profiling, which he does with the help of Labour Bureau, KLEM and CMIE databases from 2013–14 to 2015–16, is that labour market dynamics of job creation and destruction are not happening; instead, employment declined almost everywhere which he terms as ‘major collapse in employment scenario’ because it is the lack of output growth that has contributed to stagnation in employment.

Eventually, jobless growth affects welfare of those at the margins of society. Then, we are prompted to ask whether these adverse outcomes can be tackled with the help of state policies to create some kind of balance between sectoral growth and employment growth, which is a typical interrogation in the institutional sense. Jose Thomas and Jayesh tackle the issue of integrating industrial and employment policies in Kerala in Chap. 19. Kerala is an interesting and a deliberate choice for this kind of interrogation for several reasons, primary being it ranks much higher on human development, yet low on industrial development—this was known as ‘development paradox’. In fact, Kerala has been a bundle of paradoxes as these come out quite pertinently in their chapter. Due to the significant, even powerful, role played by labour institutions like trade unions or the welfare boards, wage levels rose significantly even in the informal casual jobs. But as the service sector flourished, owing to absence of protective institutional coverage, wages in growth-oriented private service sector like hospital industries languish (e.g. frequent strikes by nurses in private hospitals). Thanks to remittances from abroad, the construction sector flourished as did the service sector. At the same time, there has been significant in-flowing migration of workers from northern states like Bihar and Uttar Pradesh who are more keen to take up manual jobs which the high-profile Malayalees do not desire. This is what I call geographical cum cultural allocation of jobs in the labour market. It is not market but social and labour institutions that allocate jobs in the labour market through various channels—social (caste), geographical (migrants), identity (permanent versus contract) and so on. (see Shyam Sundar forthcoming). Even though Kerala’s state income growth has been impressive in the post-reform period, the manufacturing sector has not been able to deliver either on growth or employment fronts. His basic argument is that there obtained a mismatch between the nature of labour supply and the nature of labour demand in the state.

These contradictions pose considerable challenges to the policymakers, especially the mismatches in the labour market. Kerala’s problems are aggravated in the era of globalization as states in India are competing on a ‘low-road competitive strategy’ of offering all kinds of sops including lower labour standards, and Kerala, as we saw earlier, has higher labour standards. Then, as Jose Thomas and Jayesh correctly observe, Kerala is not suited for industrial development model that relies on polluting industries or industries demanding cheaper and unskilled labour. Given its high human development profile, Kerala offers a perfect setting for modern industries requiring high-skilled labour. The official stance of the government of Kerala corroborates the stance of the authors. The higher per capita consumption patterns in Kerala and the Malayalee diaspora who are rich in cash offer a rich product market for investors here. Kerala offers a perfect site for high road to development amidst states which thrive on flashing cheap and unskilled and compliant labour as incentives. This chapter is a wake-up call for both investors and developmental planners to move up the vale chain and access rich resource base that Kerala offers. This is a challenge worth articulating and even worth emulating by others to create a richer discourse on development.

Verick joins Abraham in talking about jobless growth by opting for a more systematic and disaggregated types of analyses of labour market statistics. He agrees with Abraham when he observes that even though jobs were created, their slow growth could be attributed by withdrawal of workers from agriculture. In Chap. 20, Verick makes crucial value additions to the debate on employment by concentrating his statistical analyses on three issues, viz. falling rate of participation by women in the labour market and pervasive informality and structural issues in employment generation (manufacturing sector vs. services sector). The more pertinent point that he makes after scholarly analyses inquiring into the causes of declining female participation rate is that the projected rise in the female participation rate from an estimated 26.9 per cent in 2016 to 28.3 per cent by 2030 will not enable India to achieve Sustainable Development Goal No. 8. Secondly, he identifies pervasive informality in the labour market. Informality matters for a number of reasons, including denial of decent work and more importantly of its association with low productivity, and hence it is a drag on the economy. So he calls for an employment policy that will ensure that “job creation leads to more formal employment, which provide access to social security and employment benefits”.

He tackles the question of applicability of ‘premature deindustrialization’ thesis—that is, the inability of the manufacturing sector to scale up its share in output and employment in the developmental process, thanks to the impressive lead taken by the service sector—by arguing that a shift from analysis of shares of sectors in total employment to employment growth rates by sectors would show that the manufacturing sector in India has been generating jobs albeit at a slower rate, and it has perhaps lost its shine in recent years. If service sector which contributed to more than half of the national income could employ a couple of percentage points over one-fourth of the total employment, then can we glorify this sector? He perhaps sees a role for manufacturing still. Further, he brushes aside the deadly noise over labour laws being obstructive of employment growth potential in the manufacturing sector as firms in this sector are far more worried about many other issues including corruption.

Though India has ratified the Employment Policy Convention, 1964 (No. 122) Convention on 17 November 1998, it has not still framed a National Employment Policy (NEP) even as its poorer neighbours have done so. However, the Government of India has done some piecemeal job of covering some segments of employment policy like focusing on skill development via National Skill Development and Entrepreneurship Policy, 2015. The Niti Aayog has outlined a ‘perspective’ for an employment policy and not a policy (see Sanghi and Khurana Undated). These tell the tale of governance and policy failures more eloquently than several passages of articulation! He offers a ‘complex set of policies’ to correct the lower female labour force participation rate which focus on six pillars, viz. inclusive growth and job creation, education and skills development, support for reducing the time burden, transport and infrastructure, legal rights and protection and measurement and bats for active labour market policy. I leave it to the readers to get the details of these from his chapter. According to him, India must do two things, viz. prioritize employment as an objective in economic and social policies and frame employment policy in consultation with social partners (social dialogue).

Labour and Industrial relations laws have been perceived to be contributing to instability in the IRS (Ramaswamy 1988) and impede free functioning of the labour market, and scholars, critics, trade unions and employers and others have called for reforms of these laws for long. In fact, industrial and labour violence that Ramaswamy notes in his chapter from Pricol to Maruti Suzuki in popular memories could have been avoided if the long-pending reforms of labour laws would have been made, for example, by providing for compulsory recognition of trade unions for collective bargaining and not the ones that employers are making in the era of globalization like amendments to labour laws to provide for easy hire and fire. This is what Shyam Sundar argues in his chapter in the book. Three reform issues, viz. trade union recognition, reform of compulsory adjudication machinery and providing place of prominence to collective bargaining (existent from the command economy period onwards), and labour flexibility reforms from the employers have proved to be tough reform measures for the central government to act upon for various reasons.

In Chap. 21, Shyam Sundar argues that on each of these reform issues, though the central government has shown commitment to implement it, it has been cleverly avoiding effecting suitable amendments for reasons which benefit the political executive and/or its allies and their labour wings. Put simply, political rationality, that is, protection and advancement of political interests of the ruling party or parties/allies which include primarily the electoral gains/losses and the interests of party/parties’ labour wings is far more important than advancement of the efficiency of the IRS or the labour market (institutional or economic rationality).

For a long time, the Congress party had been in power at the Centre, and during its rule it did not wish to jeopardize the organizational gains made by its labour wing, the Indian National Trade Union Congress (INTUC), by enacting trade union recognition laws. The other ruling parties are no different from Congress. They did not and do not want to do anything related to any aspect of trade union recognition for fear of hurting their respective labour organization’s following and, worse, apprehend the possibility of the flourishing of Left-based unions. There has been a stalemate in the union movement over the choice of method of determination of bargaining agent, viz. membership verification or check-off or secret ballot. This indeterminacy (lack of consensus) in the union movement helped Congress or any ruling party to refrain from enacting a law providing for compulsory union recognition, as the government has taken an official position of ‘waiting for a consensus’, which it damn well knows would not arise! Further, in the case of trade union recognition, any ruling party (either at the central or the state levels) knows that ambiguity and absence of a clear labour law on it will help the government to keep primarily the Communists at bay and protect its labour wings. The fear or apprehension on the part of ruling with regard to domination or usurpation of political and labour movement by Communists has been historical (see Shyam Sundar 2005). So the central government has left it to the state governments to enact laws regarding union recognition, while the central TU Act to this date does not provide for compulsory union recognition. If the central government has little interest in providing for union recognition then collective bargaining cannot flourish as employers can negotiate with any trade union, representative or otherwise and even with non-union bodies like workers’ committee (often formed with the blessings of the management). As globalization has sought to weaken collective institutions and firms aggressively employ flexible labour, collective bargaining, even if it is legally mandated, loses its relevance. What is the point of a collective agreement in an organization which employs a majority of its workers as temporary or as contract labour? The collective agreement will be mostly covering permanent and directly employed workers, who are fewer in number. So trade unions do not support reforms to weaken compulsory adjudication by quasi-judicial bodies like Labour/Industrial Courts and Tribunals even though compulsory adjudication processes are often dilatory and expensive. The logic of the trade unions is that the judicial system may serve workers’ interests better than a weakened collective bargaining system. Collective bargaining is weakened because it excludes more than it includes. The government, during the command economy, assured that as the IRS matures and the negotiating parties become strong over the decades, governance in the IRS will move away from compulsory adjudication to collective bargaining. However, this dynamic systemic movement remains stalled.

In the case of labour flexibility demands, the central government, irrespective of the party in power, faced with strident and rather frequent country-wide strikes and labour agitations did not want to sully its political image and hurt its political fortunes by making amendments to the central labour laws concerned. It made noises of reforms and, in fact, instituted several intellectual bodies including the SNCL (2002) but carefully refrained from effecting the amendments providing for labour flexibility. Its official position has been that it is committed to reform labour laws at the national level but will consult the stakeholders—primarily labour—before doing so. There cannot be better political positioning than this as this shifts the blame for any adverse economic consequences on labour! In the case of both the reform issues, the central government felt it safer to delegate reform mandate to the state governments where political and trade union organizational solidarities are relatively weaker than at the national level. As a result, the political and other dynamics have left the national-level laws intact for long, and these dynamics have to be understood in any discourse on labour law reforms.

8 Final Observations

Neoliberal globalization has in a dominant sense adversely impacted the labour market and the IRS. But very interestingly, the contributors hold labour institutions (Papola and Rodgers 1992 describe them widely so as to include formal laws to trade unions to state agencies to informal norms and values) accountable for informality and precarity though their reasoning could be different as they lean on neoclassical or institutional or labourist perspective. The macro- and the micro-studies in Sects. 1 and 2 have vividly, eloquently and comprehensively brought out precarity, informality and contractization dimensions of work, on the one hand, and recorded even with disdain the governance and managerial deficits. The jobs debate at present is so sadly enmeshed in terms of numbers of jobs and the sources of production of such numbers even as precarity and informality are present like an elephant in the room! A few of the chapters highlight the vexatious problems of identity crisis (workers or not) and regulatory failures with respect to either traditional occupations or emerging industries. While these are important, the role of labour institutions which impede efficiency even as defined by neoclassical theory cannot be brushed aside. The institutional argument is clearly reflected in SDG No. 8, viz. Decent Work and Economic Growth, which perhaps reflects and even calls for a balance between Market and Labour Institutions and one which Prof. Lalit Deshpande would perhaps endorse!

These debates are critical not only to academics but to the very ‘actors’ involved in the labour market and the IRS. At the same time, in the wake of rising and pervasive inequalities in the post-reform period, Kannan (2017) labels the ‘labour question’ as a ‘social question’ in neoliberal India. History is imitated though in an ironical sense as labour was a social question during the initial stages of industrial revolution as the working class indulged in labour and social upheavals which bothered the ruling classes (Kaufman 2007; Veerchand 2014), and now also it is a social question, thanks to the existence and perpetuation of social inequities and rising precaritization in the labour market. The former were struggles for possession (acquiring) of rights in the distant past and the labouring and social classes are in the contemporary period fighting against dispossession of labour and social rights, and in that sense the Labour Question continues through Time and Space as a ‘Social Question’.