Labour Force in India

Context:

International Labour Day, also known as May Day or Workers Day, is celebrated as a public holiday around the world to celebrate the contributions of workers on the International Labour Day. 

About Labour Force: The labour force, or currently active population, comprises all persons who fulfil the requirements for inclusion among the employed (civilian employment plus the armed forces) or the unemployed. 

• Labour force in India can be divided into organised and unorganised sectors. In the year 2017-18, the total employment in both the sectors in the country was around  47 crores.
• Out of this, around 9 crores are engaged in the organized sector and 38 crores are in the unorganized sector.

History:

• First Labour Day: It was celebrated on May 1, 1889 as the International Workers Day. 
  • The celebrations were declared by an international federation of trade unions and socialist groups to commemorate the Haymarket Riot in Chicago.
  • Protest for Eight-hour Workday: The riots are also known as the Haymarket Affair, which occurred in 1886. 
  • The riot started as a peaceful march that demanded an eight-hour workday but later turned into a violent clash between the protesters and the police forces.

Labour Day In India:

• First May Day: In India, the first May Day celebrations were organized on May 1st, 1923,  in Chennai by the Labour Kisan Party of Hindustan, led by M Singaravelu Chettiar.
• Linkage of Local Struggles to Global Labor Movements: M Singaravelu introduced May Day in India to link the struggles of Indian workers with the broader global resistance of labor against severe exploitation and dehumanization.
• Celebrating Workers’ Contributions: The day is celebrated to recognise and honour the significant contributions of workers.

Current Trend of Labour in India:

• Dominance of Informal Sector: As per India Employment Report 2024, approximately 82 percent of the workforce works in the informal sector.

• Labour Force: Data from the International Labour Organisation’s (ILO) show that in India, as of 2021, only 51.3 percent of the working age population (15-64) was part of the labor force.
• Workforce Statistics:  In 2020, there were around 501 million workers in India, the second largest after China. 
  • Out of which, agriculture industry consist of 41.19%, industry sector consist of 26.18% and service sector consist 32.33% of total labour force. 

Major Issues faced by Labour in India:

• Low Wage and Wage Disparities: Majority of workers earn a daily minimum wage of ₹176 or more which is insufficient to meet their basic needs.
  • The national wage floor, stagnant since 2017, lacks enforceability across states and leads to wage payment discrepancies across different states.
  • The non-statutory floor level minimum wage remains a meagre ₹178 remaining constant for the last few years. 
• Lack of Job and Social Security: With the majority of the workforce working in the informal sector, it is devoid of job security, and legal protections. 
  • There is a high prevalence of contract employment, which leaves workers vulnerable and uncertain.

• • Only 1 million out of 63 million Indian enterprises and approximately 7.5% of 550 million labor force contribute to monthly social security. 
• Child Labour: As per the National Crime Bureau Report 2022, in 2021, around 982 cases were registered under the Child Labour (Prohibition and Regulation) Act, 1986, with the highest number of cases registered in Telangana, followed by Assam. 
  • The figures saw a significant increase from 476 cases registered under the Act in 2020.
• Bonded Labour: The research study titled ‘Assessing Budgetary Priorities for the Rehabilitation of Bonded Labour,’ underscores that the prevalence of bonded labour is a significant issue within the informal sector of the Indian economy.
  • The study highlights that approximately 10 per cent of India’s workforce falls under the classification of bonded labour.
  • Individuals trapped in bonded labour encounter challenges like prolonged working hours, coercion, irregular or absent wages, indebtedness due to loans or social obligations, and limitations on mobility between employers. 
• Gender Discrimination: In the labor market, women workers experience harassment at work, unequal compensation for equal work, and limited access to formal employment opportunities.
  • A recent World Bank Group report found that women receive only 77 cents for every $1 paid to males, underscoring the gender pay disparity.
• Migrant Worker Rights: Migrant laborers experience discrimination, exploitation, and limited access to social services. 
  • They face problems like debt bondage, lack of legal protection, and inadequate housing.
• Workers’s Safety: Every year, India registers the death of hundreds of workers due to insignificant and unreliable safety measures in factories and construction sites.
  • According to government data, three workers die every day in Indian factories due to a lack of basic safety measures. 
• Execution Challenges: The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act does not integrate well with the framework established by the 74th Constitutional Amendment Act for urban governance.
  • Schemes like the Smart Cities Mission mostly focus on infrastructure development and ignore the provisions of the Act for the inclusion of street vendors in city planning.

Labour Reforms in India: 

• About: The Ministry of Labour and Employment introduced four codes to consolidate 29 central laws based on recommendations of Second National Commission on Labour (2002). These Codes regulate: 
  • Wages
  • Industrial Relations
  • Social Security
  • Occupational Safety, Health and Working Condition
• Key Features of Labour Codes:
  • The Code of Wages, 2019:  It aims to bring uniformity in the implementation of legal policies governing the payment of wages. 
    • It states that the minimum wage cannot be fixed below the National Wage Floor (NFW). However, this code, which is binding on all states, is yet to be implemented.
  • Code on Social Security in 2020: It sought to provide a statutory framework to enable social security for the urban and rural poor, construction workers, gig and informal sector workers.
    • It proposed the provision of life insurance, disability insurance, accident insurance, as well as maternity and health-care benefits along with old-age protection and crèche facilities for gig workers. 
  • Industrial Relations Code, 2020: It provides a broader framework to protect the rights of workers to make unions, to reduce the friction between the employers, and workers and to provide regulations for settlement of industrial disputes.
  • Occupational Safety, Health, and Working Conditions Code, 2020:  It emphasizes the health, safety, and welfare of workers employed in various sectors.

Issues with the Current Labour Reform: 

• Lack of Social Security to Informal Sector: The Code on Social Security in 2020 does not cover the contract workers who shift from one occupation to another in search of their livelihood. Ex- Construction workers.
  • There is no guaranteed fund allocation from employers in the informal sector. Moreover, it depends on the size of the enterprise in terms of the number of workers. 
• Occupational Safety Remains Unaddressed: Industrial safety continues to be a grave concern even after the enactment of the Occupational Safety, Health and Working Conditions Code.
  • IndustriAll reported that between May to June, 32 major industrial accidents occurred in India, killing 75 workers.
• No protection to Contractual Workers: Workers in the already comparatively small formal sector, jobs in the formal sector are increasingly being casualised. Ex-Sanitation and waste workers in civic services. 
  • The manufacturing sector too now largely relies on contracted labor. Provision for permanent employment and regularization, which existed in the subsumed Contract Labour Act of 1970 now do not exist.
• Violation of Principles of ILO: The new codes violate leading principles and standards laid down by the ILO. 
  • The codes have been passed without a tripartite consultation between workers, employers and government representatives as recommended, and have attacked the powers of collective bargaining by rendering all strikes illegal.
• Neglect of Sector-Specific Workers: The repeal of the Building and Other Construction Workers (BOCW) Act 1996 points to the insensitivity to sector-specific problems. 
  • The repeal of sectoral laws has been accompanied by the repeal of 10 cesses that funded welfare schemes for salt, mining, and beedi workers among others. 
• Exclusion of Domestic Workers: The Occupational Safety Code excludes private households and thus all provisions on safety, health, or working conditions would not be applicable to domestic workers.
  • Domestic workers are also not specifically mentioned in the Code on Social Security.
  • India has not ratified the ILO Domestic Workers Convention 189 convention aimed at safeguarding domestic workers.
• Overlaps in Definition: Provisions have been made for separate boards for unorganized workers and gig/platform workers in the Code on Social Security 2020. 
  • This tends to overlap since gig/platform workers are a subset of the broader category of ‘unorganized workers’.
  • Stricter Provisions on Strikes: The Code on Industrial Relations (CIR), has made legal strikes nearly impractical. Illegal strikes now entail significant penalties.

Way Forward:

• Decentralizing Street Vending Interventions: There is a strong need to decentralise interventions, enhance the capacities of ULBs to plan for street vending in cities.
  • There is a need to move away from high-handed department-led actions to actual deliberative processes at the own Vending Committees (TVCs) level. 
  • As mandated by the Street Vendors Act, street vendor representatives must constitute 40% of TVC members, with a sub-representation of 33% of women street vendors. 
• Comprehensive National Legislation for Informal Workers: The trade unions demand it to preserve their right to core labour principles.
  • These include the right to collective bargaining, grievance redress and dispute settlement, fair minimum wages and minimum guaranteed income, and minimum employment guarantees including in urban areas. 
  • Their entitlement to social security including Employees’ State Insurance (ESI) coverage and pensions must be guaranteed through GST, state and Union budgets.
• Reinstating Sector-Specific Laws for Worker Protection: The sector specific laws which have been subsumed must be reversed, so that workers can meet their sector-specific needs.
  • Instead of attempting to “consolidate” existing labour legislation, efforts must be made to draft specific legislation to cater to the needs of informal workers in specific sectors, such as home-based workers, domestic workers, and those who work in the commons. 
• Registration of Domestic Workers: This would help workers not only as proof of employment in the event of any violations, but also as eligible beneficiaries for accessing related social security provisions.
  • It is also important to clearly define the sector. 
• Amendments in Definitions: Amendments need to be done in the area of definitions in the Code, especially in terms of properly differentiating employees and workmen as well as recognizing and defining other classes and sub-classes of labour.
  • The definitions of unorganized sector needs to be modified such that it is more inclusive and has more clarity.
• Utilizing Data From Labour Bureau:  Trade unions could have utilized data on strikes and lockouts published by the Labour Bureau, revealing that lockouts occur more frequently and result in more workdays lost than strikes during the post-reform era. 
  • Such evidence could have questioned the necessity of introducing stricter provisions on strikes in the Code of Industrial Relations.

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