The labour force and labour markets have undergone transformations over the years. The nature of work, working conditions, awareness, laws, compensation, geographical locations, and benefits have seen substantial changes.
The Labour Department, which is seen as a saviour of the labour force from exploitation and harassment and as an enforcer of work continuity as per the law, is still playing catch-up with the changing trends. The department has not made adequate progress either in resetting its objectives, redefining its role, or increasing the scope of its interventions to keep up with the changing trends.
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The relaxation of labour laws to ease scaling up and down of manpower based on business needs, especially for small and mid-size industries; e-compliance, reducing the paper trail; integration of compliance codes; amendments to the Apprenticeship Act and Factories Act; and the increase in minimum wages and equal opportunity for women are lauded as steps in the right direction, but they are mere administrative tweaks rather than actual reforms.
The administrative alterations to the Acts have not facilitated a sizable movement of the labour force from the unorganised sector to the organised sector, nor have they seen an increase in labour participation, especially among women, where participation in Karnataka is at 31.7%, 3% higher than the national average.
Despite Karnataka being the top NITI Aayog Innovation Index 2019 performer and being dubbed the Tech Hub and Knowledge Workforce Hub of India, only 24.7% of the 2.9 crore workforce in Karnataka is in the organised sector with access to social benefits, compared to the 20% national average. This is a monumental failure.
Bridging the gap between the unorganised sector and the organised sector requires four major reforms and a fresh perspective to implement them.
Firstly, the ESIC regime should be ended, as it was designed for a time when there was little or no access to healthcare. Today, it is the most expensive and least effective insurance scheme, benefiting only a few. Integrating ESIC, Yeshasvini, and Ayushman Bharat into a single, unified scheme with better benefits and access for all can be a game changer for employees, employers, and the government.
Secondly, affirmative action is needed to address the shrinking jobs in the government and public sector undertakings (PSUs), which have resulted in lopsided labour force participation. Private sector companies, especially multinational corporations (MNCs), should not shy away from their responsibility in Karnataka and must consider comprehensive laws to employ a diverse workforce covering religion, gender, and caste, emphasising the inclusion of the local population. Compliance with diversity and inclusion policies should be rewarded, and non-compliance should lead to disqualification from future government benefits, schemes, contracts, or projects.
Thirdly, the majority of the workforce today is outside the social security net. The fate of the unorganised labour force, including health workers, healthcare staff, street vendors, MGNREGA workers, drivers, loaders, food delivery personnel, couriers, construction workers, and housekeepers, who are not covered under any social security but are considered in government schemes with ineffective implementation, must change. A unified labour card that enables access to benefits and enforces training and re-skilling can seamlessly move the labour force from the unorganised to the organised sector with trackability.
Fourthly, there is a need to integrate labour and skill development. The Labour Department must shift from merely conserving jobs to enabling the creation of jobs. The government and the Labour Department should be aware of changing trends in the job market and create skilled workforces or enable re-skilling along with employers. The current skill development schemes have mostly remained PR exercises. The target for the labour department in the next 5 years should be not only to create more jobs, but also to work towards moving 74.3% of the workforce to the organised or semi-organised sector. This should be achieved through adequate training, improved employability, and social security.
It is hoped that the new government, which has released schemes for different sections of society, will consider implementing ‘Reforms Bhagya’ for the labour department.
Today, the most visible external change is the diminishing role and participation of labour unions. Increased awareness, economic aspirations, and education have led to a reduction in employee alignment with labour unions. However, this does not diminish the importance of labour unions in an era where the voices of the vociferous minority (employers and investors) often supersede those of the voiceless majority (the labour force). Labour unions face larger challenges, such as making the labour force more inclusive, agile, and productive, advocating for safer working conditions, reducing the gap between skilled and qualified workers, and protecting the interests of the labour force.
(The writer is the former founder of India’s largest staffing company and KPCC General Secretary.)