National Trade Union Initiative (NTUI) statement, New Delhi,  July 31, 2014


The Rajasthan government’s decision to  amend the Factories Act has turned the clock back two centuries for what are acceptable conditions of work in a factory.


The amendment seeks to raise the floor for mandatory registration, of an establishment engaged in a manufacturing process, under the Factories Act from 10 workers to 20 workers. This means that factories employing 19 or less workers would not have legally binding responsibility for the safety of their workers inside the factory. The amendment also undermines the legal protection on hours of work, a weekly off and other rights to decent working conditions.


The struggle for universal coverage under what came to be the Factories Act in many countries was waged first in the 19th century. The amendments proposed by the Rajasthan Government thus take us back two centuries. Following the 1984 Bhopal Gas Tragedy, the Factories Act 1948 was significantly amended to ensure that employers had higher accountability for workers’ safety and health hazards.


The amendment to the Factories Act in Rajasthan comes with amendments to the Contract Labor (Regulation and Abolition) Act 1970, the Apprentices Act 1961 and critical clauses of the Industrial Disputes Act 1948.


The amendment to the Contract Labor Act will raise the floor for application of the Act to an establishment that employs 50 or more contract workers (from the present 20 or more as applicable country-wide). In an environment that widely acknowledges severe under reporting by small and medium enterprises and allows multiple factory licenses at the same address, effectively allowing factories within factories, these amendments would in effect allow factories with employment of a 100+ workers to operate entirely outside the protection provided under the Factories Act and the Contract Labor Act.


The amendment to the Apprentices Act provides for a ‘sharing’ of apprentice compensation between employers and the state government, the freedom of employers to terminate apprentices during the apprenticeship and including apprenticeships under categories of temporary and contract workers. Today apprentices are being employed in large numbers in manufacturing to keep wages low and deny workers their legitimate right to freedom of association and collective bargaining. The amendments are aimed at providing a legal cover to this practice. While the government talks of creating skilled and employable workers this amendment effectively puts skilled workers out of the definition of workers and places them in the category of apprentices.


The effort of the Rajasthan’s Bhartiya Janata Party (BJP) Government to change the basic framework of labor law in the country is further concretized and its scope widened in the proposal to amend Chapter VB of the Industrial Disputes Act  (IDA) 1948. The provisions of Sections 25 of the IDA imbue accountability of employers in employment of workers in establishments with 100+ workers wherein they are required to obtain prior permission of government if they wish to close down the establishment or reduce the number of workers employed. The ID Act lays out clearly the conditions under which an establishment covered under Chapter V B can apply for lay-off, retrenchment or closure, two of which clearly being (i) genuineness and adequacy of the reasons for such action by the establishment and (ii) interests of employed workers. The Government of Rajasthan seeks to raise the floor for coverage under chapter VB from establishments employing 100 workers to those employing 300 workers without providing any rationale based on changes in industrial practice or manufacturing processes over time. By implication all establishments employing 299 or less workers will now be governed under Chapter V A which does not require government approval for termination, retrenchment or layoff of workers or closure of establishment.


The amendments to the ID Act include a detailed definition, of what constitutes ‘go slow’ in an establishment in Schedule V –Unfair Labor Practice. If workers are retrenched, laid-off or terminated for executing a ‘go slow’, that includes ‘work to rule’ and the failure to achieve ‘fixed or average or normal level of production or work or output’, the amendment proposes that the workers will not be eligible for any compensation. Taken along with the amendment to Chapter VB the definition of ‘go slow’ can open the way to retrenchment without compensation and therefore increase the fear of victimization which today is a palpable threat against the right to form or join unions. The present amendments will also repeal a progressive Rajasthan addition of 1958 wherein the definition of workmen included contract workers. The exclusion of contract workers in computing the number of workers on the rolls of an establishment will make it easier for employers to show their employment numbers below the 299 threshold. The amendments will raise the threshold from 15% of trade union membership to 30% of membership within an establishment for a trade union to be able to demand recognition, thereby significantly eroding trade union rights and paving the way for employer promoted unions. Every one of these amendments represents a fundamental attack on rights of workers to protest unfair labour practice routinely committed by employers.


The amendments proposed by Rajasthan’s BJP Government are most of all in violation of Article 254 of the country’s constitution – upheld through judicial review – which clearly sets out that the power of states to legislate changes, in variance with rights protected by national legislation, are limited to removing difficulties or for easier explanation unless state legislation enhances the rights of citizens.


The framework of development over the last two decades has involved a competition for investment between states through the provision of concession to capital in the form of land grants, tax holidays and in the case of Gujarat even unsecured loans of large sums of monies at virtually no interest have been handed out to private companies. The actions of the Government of Rajasthan now stretch to providing a lower regulatory employment framework that will force down wages and therefore intensify competition between states on this count too.


For over two decades, the labor rights implementation machinery has been in complete disrepair as far as workers rights are concerned. Furthermore provisions such as prior permission from government under Chapter VB of IDA comes through automatically unless government declines permission. The fact remains that in the present environment retrenchment or closure has only been resisted where a democratic union has been able to militate the rights of its membership. Vast numbers of workers are defenseless in the absence of unions.


The actions of the BJP government in Rajasthan are not innocent and restricted to Rajasthan alone. Its action is in tandem with the aggressive efforts of the Union Government, including through the Union Cabinets approval to the Factories Act and Apprentices Act yesterday. This represents a political attack on industrial workers and their fundamental right to form or join unions to defend their rights to safe work places and secure employment.


The New Trade Union Initiative opposes the amendments and calls upon all sections of the working class to build a sustained opposition to them. In pursuance of this the NTUI shall respond to all calls that are already in place to build the widest coalition of trade unions and social movements to defend these fundamental rights of workers.

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