The fall in organised sector employment has widely been discussed in India in the context of economic reforms and labour market flexibilisation. Also, the linkages of labour market flexibility to informalisation of labour have been well established in the context of the expansion of informal sector employment. However, the most striking, but often unmentioned, aspect of informalisation of formal sector employment in the name of flexibility is the assault on the right to collective bargaining.

History illustrates that collective bargaining has been the means of asserting the rights of workers. For instance, welfare provisions for industrial workers in Europe were introduced mainly due to working class pressure for livelihood and better conditions of work (George, Vic and Page, Robert, 1995, “Thinking about Welfare in the Modern Era”, George and Robert (eds.), Modern Thinkers on Welfare, Prentice Hall, London). It is argued here that capital diminishes the space of labour for collective bargaining through a process of dismantling of labour laws and weakening of the organised sector. Contextualising in the contours of informalisation, casualisation and feminisation of labour, this article tries to see how a disciplined labour space is created as a result of labour market deregulation with cases from a garment export unit and an electronic manufacturing unit in India. 

Disciplining of Labour Space

The term ‘disciplining’ here refers to the appropriation of labour in an extremely unequal relationship of power practised by virtue of specific processes. Emerging forms of informalisation of work, in conjunction with the prevailing practices in production organisation, work organisation, labour practices and labour relations can be seen as processes that diminish the space of collective bargaining for workers in a production environment. To show this requires looking both at the macro level and the micro level to see two aspects: how the disciplining of labour space is operated through significant actors and agencies and how it is practised to curtail the organised activities of workers.

Trend of Organised Employment and Unionisation in India: Macro Pictures

The rate of growth of the informal sector has always been on an upward trajectory in India. However, it has recorded an unprecedented growth in India in tune with developments such as a shift from industry to services in the developed world and global relocation or outsourcing of low-end manufacturing and services to the developing countries (Despande, K.L., and S. Despande. “Impact of Liberalisation on Labour Market in India, What do Facts from NSSO’s 50^th Round Show”. In Economic and Political Weekly. May 30, 1998. pp. L-31-L-39.). In line with this, there has been a rigorous process of restructuring of production organisation, dismantling of labour regulations and introduction of export promotion policies in India that facilitate the increased   informalisation of labour.

One of the processes toward the propagation of an export-oriented growth strategy, which has far-reaching implications on labour, is labour market flexibility. Labour market flexibility implies freedom of enterprises in deciding wages, employment and labour processes unfettered by any institutional and legal restrictions (Nath, G.B. “Flexibility of Labour Market: Theoretical Approaches and Empirical Evidences from India”. In Indian Journal of Labour Economics. 1994, Vol. 47, No. 4, pp. 513-521). The demand for flexibility of the labour market is mainly grounded in the market logic that any intervention by the state, trade unions or any other institutions on wages, employment and work allocation would negatively affect production and hinder employment.

There is a growing literature which links economic reforms and trade policies to the process of flexibilisation and resultant informalisation of labour in India. Gupta (Gupta, S.P. “Economic Reforms and Its Impacts on Poor”, Economic and Political Weekly. June, 1995, pp. 1295-1311) estimates that casual employment in India fell by 1.1 per cent per annum between 1983 and 1990-91, and rose by 3.3 per cent per annum in the period 1990-91 to 1996-97. On the basis of this evidence, he argues that trade policies such as the deregulation of the labour market, export promotion and trade regulation have led to increased casualisation of labour in the post-reform period. The share of formal sector employment has been shrinking constantly in India, reinforcing this trend (Tendulkar, Suresh D. Organised Labour Market in India Pre & Post Reform, Delhi School of Economics, University of Delhi, 2003).

It is pertinent at this juncture to examine the trend of unionisation and space of trade unions for collective bargaining. Data shows that the rate of unionisation in terms of union membership and the number of registered trade unions showed noticeable fluctuations in India over years. It is reported that total trade union membership decreased to 5,601,000 in 1996 from 6,100,000 in 1991 and again increased to 7,409,000 in 1997 and fell to 6,973,000 in 2002 with slight fluctuations over years (Labour Bureau, GOI, 1991-2002).

While the general trend of unionisation in the organised sector does not evidence a noticeable fall in membership, trade unions could not make much progress in the informal sector and the informal work arrangements existing in the formal sector in India.  Workers in these situations account for more than 92 per cent of the work force. And, even in the organised sectors, it is widely felt that trade union activities, in some cases, are either hampered or are unable to assert the space of collective bargaining. It is imperative in this context to explore the factors that curtail trade union activities in a work environment.

Micro Pictures: Evidences from Garment and Electronic Production Industries

The three major developments subsequent to labour market flexibilisation diminishing the space of collective bargaining for workers are informalisation, casualisation and feminisation of labour. The garment and electronic production sectors have witnessed informalisation on a massive scale. Thus, I will here examine an export-oriented garment-manufacturing unit (Leela Lace International) in Cochin Special Economic Zone (CSEZ) and an electronic manufacturing unit of a Trans National Corporation (Samsung India, Pvt. Ltd.) in NOIDA to understand better the impact of informalisation of formal sector employment on unionisation and collective bargaining of the workers.

Leela Lace International is a garment export unit, which exports readymade garments to their clients in Europe. Production in this unit is completely export-oriented and their major client is Wal-Mart. Wal-Mart outsources production to this unit by supplying the materials (mostly fabric). Works involving the production of the garment such as sorting, cutting, cleaning, stitching, ironing, packing and checking, which need large numbers of skilled and unskilled labour, are being done in this unit.

The processes of space disciplining in the production units of Special Economic Zones (SEZ) are operated at different levels, ranging from policy interventions of significant agents (central and state governments) to specific firm practices. For instance, the legitimisation of contract employment in the organised industrial sector enables the employer to keep a periphery layer of workforce in production, thereby reducing the cost of production. The amendment to Contract Labour (Regulation and Abolition) Act 1970 in the state SEZ policies is aimed at this. Similarly, the state SEZ policy subsumes amendments of Industrial Dispute Act 1947 for flexibilising the formalities associated with lay off, retrenchment, closure and compensation as well as granting Public Utility Service Status for the industry; the Trade Union Act 1926 for limiting organised engagements of workers; the Employees State Insurance Act 1948 for excluding contract labourers from the purview of ESI; and Section 66 of the Factories Act 1948 for flexibilising hours of work for women and allowing night shift for women in the SEZs (Model SEZ Act, 2002). The conditions of the formation of trade unions in SEZs, such as restrictions on multiple unions, 50 per cent membership at the time of formation and the non-involvement of outsiders as per the amended Trade Union Act 1956, largely limit the possibility of trade union formation in SEZ units. Public Service Utility Status, as mentioned in the amended Industrial Dispute Act, limits the workers to strike work or engage in any form of protest against the management.

The labour practices and production relations of the Company give an overview of the space disciplining practices at the workplace level. All workers (N=500) up to the level of supervisors are on contract basis, and out of that 95 per cent are unmarried women below 30 years of age from rural and poor economic backgrounds (George, Sobin. Informalisation of Labour and Its Implication for Health: A Study with Special Reference to Export Processing Zones in India, M. Phil Dissertation Submitted to Jawaharlal Nehru University. 2003. Unpublished). It was found that the firm prefers female workers to male workers out of the notion that ‘greater discipline’ and ‘patience’ make women more suitable for the unskilled and semi-skilled activities carried out in the unit. Even though workers know that they do not get reasonable wages for their work, they do not bargain for higher wages for various reasons. Workers, largely being women, do not question or register any protest against such practice mainly because of fear of loss of job. Trade unions could not make inroads into this unit, mainly because of this fear factor of workers and the strict vigilance of the management.

The case of this unit shows that the patriarchal constructions of female submissiveness and the willingness of women workers to take up low-paid jobs have been deliberately imbibed into the practice of employee selection. In such cases, the apparently created ‘new employment opportunities’ for women are found to be part of the process of creating a disciplined work force who may not involve in any forms of organised activities.

Samsung India Electronics, a subsidiary of Samsung Electronics Co. Ltd., is the centre of operations of Samsung in the South West Asia region. The regional headquarters in New Delhi shores up the Samsung operations in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides India. Samsung India commenced operations in India in December 1995. The company initially operated in India through two subsidiaries, namely Samsung India Electronics Ltd (SIEL) and Samsung India Electronics Information and Telecommunication Ltd (SEIIT). It houses the production of colour televisions (CTV), colour monitors, refrigerators, washing machines and software.

The Samsung case also underscores the fact that the policy changes pertaining to labour, in line with attracting and retaining Foreign Direct Investment, work to discipline labour space. For instance, the Amendment to the Contract Labour Act facilitates outsourcing of activities without any restriction through the offer of contract appointments. By increasing the temporary status (contract term) of the workers to 720 days out of three years instead of 240 days out of one year as per the existing labour laws, the government allows the firms to practice numerical flexibility in the IT and electronics sector. Additionally, the applicability of the Contract Labour Abolition Act will be removed from IT-enabled sectors. Furthermore, manufacturers will be allowed to downsize employee rolls by up to 10 per cent of total employee strength in any year without permission, for facilitating functional and temporal flexibility in the sector. Since women form the major share of low-end jobs in the workforce of the electronics industry, the government made provisions for engaging women workers in all the three shifts subject to provisions of transportation by amending the Factories Act.

A primary study of Samsung provides some insights into the strategies of labour space disciplining at the workplace level. Practices of labour recruitment, employment contract, line management and disciplinary action in the units give a fair account of the denial of space for collective bargaining in the unit.

First, the company keeps a scattered workforce and significantly limits the interaction amongst them by recruiting a workforce that is segregated along the lines of language, region and gender. Workers are mostly from far away places; largely from the rural and semi-urban areas of the states of Bihar, Rajasthan, Uttaranchal, Orissa, Madhya Pradesh and southern parts of India as well as neighbouring countries such as Nepal. Second, there is constant monitoring and performance evaluation by the supervisor in the company. Therefore, the jobs are always at stake and any union engagement may lead to victimisation. Third, the company, by various means, consciously creates an environment to hinder the spread of discontent. For instance, incidents such as harassment, suspension and dismissals, which may stimulate the collective class conscious of the workers, are dealt with in isolation (George, Sobin, 2006, “Labour Practices and Working Conditions in TNCs: The Case of Samsung India” in Labour in Globalising Asian Corporations: A Portrait of Struggle, Asian TNC Monitoring Network Series, AMRC, Hong Kong). Conversely, dismissals are implemented at intervals so that the retrenched workers have no chance to organise collectively.

Evidences from Samsung also show that it is not only the ‘female worker’ bias that is operating in the employee selection in the peripheral layer of workforce. A bias based on education, skill levels and place of origin is observed for work in the lower end jobs in Samsung. Out of a total workforce of 1700, women constitute 500, approximately  one-fourth the total workers. Also the management prefers to recruit less educated or technically unskilled people from the remote villages of the country. For instance, in Samsung, technical education is not a criterion for employment at the operator-level jobs and 18 out of 20 workers interviewed from the unit did not possess any technical qualifications required for the job (Ibid, p. 175). The Company provides them technical training with a bond for a period of time, which in effect, binds the workers to the Company. The Samsung case shows that preference for less-educated and technically unskilled workers is also a strategy adopted by the firms to keep a docile and ‘disciplined’ workforce. Here the process of disciplining is operated through the disadvantageous position of this workforce, in terms of their bondage with the recruiting agency or contractor, fear of loss of jobs, acute poverty conditions in the place they are coming from and other obligations.

Conclusion

The discussion demands that the decline of organised activities of workers must be looked at in the purview of the changing labour market structure. The problems lie mainly with the changing production and labour relations in the formal sector, which always has a space for organised activities of workers. The limitations of trade unions to reach the workers in the informal work arrangements are multiple, ranging from policy-level interventions, flexibilised labour relations at the macro level to the labour and production practices at the micro level. The failure of trade unions in certain cases to use the space of collective bargaining for effective dispute settlement is also material for further investigation. The micro pictures show that the weaker position of labour in the newly informalised sectors is a generated one, in most situations. Trade unions have not overcome this threat mainly due to the inherent contingencies of informal employment. Thus capital, in this conducive environment, easily creates and maintains a disciplined workforce at its will with its production and labour practices.