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Manesar: Unionisation of Contract Labour a Big Step Forward, But New Challenges Ahead

The recent enrolment of contract workers in an auto component plant union, despite various hurdles in the way, has been hailed by trade union activists and wider workforce.

Nearly 2,500 contract workers at Honda Motorcycle and Scooter India (HMSI) had successfully left a dent on the spirit of the labour struggles, with their four month long protest earlier this year against retrenchments. Image Courtesy - Facebook

New Delhi: The extension of union membership to a section of contract workers in a major auto component firm in Manesar this week is the first step toward fighting the inequity that characterises the treatment of labour in the country’s manufacturing sector, i.e, the denial of the right to collective bargaining to an army of contract workers.

This development has given a ray of hope to labour unions, which were struggling to fight for worker rights in an era of growing contractualisation, leading to a subsequent decline in trade unionism in industrial towns across the country.

The recently passed labour codes which have become law, subsuming existing regulatory enactments, will only encourage more contractualisation of the workforce, fear labour experts.

Read Also: Manesar: Protest Against Labour Codes Sees Unionisation of Contract Staff

Against this backdrop, the recent years have seen multiple experiments in unionising contract workers in the manufacturing sector, at least in Manesar, the industrial town in Haryana, which houses major multinationals, including auto manufacturing companies such as Maruti Suzuki, Honda and Hero among others.

workers manesar

The staff of the Bellsonica Auto Component India Pvt. Ltd. (BACI), many of whom have completed five to six years as contractual workers, were offered membership of the permanent employees’ union earlier this week. Image Courtesy - Facebook

The move to include contract workers in factory unions and the willingness of such workers to organise and collectively fight for their rights, though has its own set of limitations, has been hailed by union activists the wider workforce.

In One Factory Today, Another Next Day

Employment in the manufacturing sector in India in 2018-19 was only 12.1% of the total workforce, according to the latest Periodic Labour Force Survey (PLFS). The figure included workers in both the organised and unorganised sector – the latter comprising micro and small factory units accounting for almost three-fourth of the manufacturing workers.

The unorganised setup (employing a majority of the total workforce) has largely remained out of the purview of labour regulations.

The growing influx of contract workers in organised manufacturing industries, colloquially known as the factory sector that otherwise saw strong trade union movements, threw a major challenge to collective bargaining. For, despite violation of labour laws by managements, it was difficult to organise contract workers who mostly work under onerous working conditions, get low wages and face lack of job security and other benefits.

Between 1999-2000 and 2014-15, directly employed workers accounted for only 33.5% of incremental employment in the factory sector, labour economist Jayan Jose Thomas noted in an article in Frontline magazine. This was also the period, he suggested, that saw a decline in trade unionism.

Manesar wasn’t left unspared from the changing labour landscape, as pointed out by Atul Kumar, president, Bellsonica Auto Component India Pvt. Ltd. (BACI) employees’ union, which is the first union in the industrial belt to enrol contract workers.

“Less than 10% companies now have permanent employees on their payrolls. The strength of contract staff is much greater in these companies,” he said.

This was not always the case, he added, while speaking with NewsClick over phone from Manesar.

Kumar’s company BACI, a vending company – established in 2007 – attached to leading car manufacturer Maruti Suzuki, however, remains an exception. As of now, it has 690 permanent employees on its payrolls and around 300 contract workers, employed through a contractor, for a period of six months, Kumar said.

There is another batch of 145 workers also perform similar duties as permanent ones and have completed five to six years on contractual basis at BACI, and continue to remain so. It is these workers who were offered membership this Thursday by the BACI’s employees’ union.

“The stakes are usually high for contract workers, who can be terminated without any notice,” Satbir Singh, vice president, Centre of Indian Trade Unions (CITU), told NewsClick.

Since contract workers are outside the purview of the protective provisions of labour laws, “they are far more insecure than permanent employees and are thus less willing to engage in unions,” said Singh, who has been active in trade unions activism in the Manesar industrial belt.

Kumar cited similar reasons for the hesitation in unionising the 300 contract workers at BACI who, as he feared, “would be replaced by a new batch of workers,” after their tenure ends.

“Others accepted union membership so as to ensure that the management take up their issues and engage in discussions with the union,” he added, contending that the development could provoke the management into dismissing those who joined the union.

“In that case, the union will obviously fight the termination,” he added.

The BACI employees’ union is currently demanding wage revision – pending since 20 months – for both the permanent staff and contractual staff, along with wage parity and medical insurance for the latter.

BACI’s example, certainly a welcoming one, however brings to the fore serious challenges in effectively enabling the contract labour to exercise their collective bargaining power.

How to unionise workers who are in one factory today and another the next day? How to balance the interests of the much-exploited contract staff under one banner along with permanent employees who enjoy higher salaries and often carry their economic self-interest? These are some questions that need to be tackled.

Is bringing together contract workers within an area-based union a way out? Anant Vats of Automobile Industry Contract Workers Union (AIAWU), however, feels this is strategy that would have “practical significance”.

“The growing numbers of footloose workers, who are employed on contractual basis, need a body that represents them at a sectoral level. This will ensure that the form in which they are politically organised bears some bargaining power,” which stays independent of the permanent employees, Vats says.

AIAWU has been working on these lines in the past few years and says it has grown its presence considerably in Manesar, along with in other nearby industrial towns such as Bawal in Haryana and Rajasthan’s Neemrana.

Some ‘Lessons’ From Past

Last November, Manesar was shook by an unrest that had successfully left a dent on the spirit of the labour struggles.

Nearly 2,500 contract workers at Honda Motorcycle and Scooter India (HMSI) had occupied the company premises for 18 days, followed by an indefinite protest demonstration at a public ground in the town, which lasted almost four months.

Their demands: reinstatement of around 400 contract workers who were retrenched due “demand fluctuations and production adjustments,” in the company.

Unfortunately, the struggle ended with all the protesting contract workers submitting their resignations as part of a settlement between the contracting agencies and the Trade Union Council – which comprised representations from agitating contract workers, HMSI’s permanent employees union, and central trade unions, namely CITU and AITUC.

This episode, to some extent, highlighted the “tactical weakness” of existing unions in representing contract workers. Singh of CITU admitted this while speaking with Newsclick.

“Yes, the desired results couldn’t have been achieved then. But the economic conditions of the industry also played a role in it,” he said, referring to the economic slowdown that had triggered job-losses and wage cuts across the country.

Going forward, Singh was hopeful that the right “lessons” for the future will be drawn out of this episode among fresh challenges facing the trade union movement after the recent enactment of new corporate-friendly labour laws.

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