The brutal attacks on senior managers of Maruti-Suzuki's Manesar unit, leaving one of them dead and several others seriously injured, has again brought to the fore the matter of labour law reforms. During a TV discussion following the incident, Mr Rahul Bajaj, the respected industrialist - parliamentarian, brought to bear the practice of many industries (including apparently the Maruti plant) having just a small work force directly on their rolls, and upto 5 or more times that many on contract, all for the same kind of work. And, while these 'regular' workers are paid excellent salaries and accorded all kinds of benefits, the contract workers get just the government notified minimum wages, which at best matches just about one-third the salary levels of the regular workers. Mr Bajaj pointed out that such flagrant differentiation is amongst the biggest causes of disaffection amongst the workers
While such practices are rampant, particularly in the SME sector, in the Corporate sector however I had thought that contract workers were engaged only for non-core activities of a unit, like for house-keeping, security, canteen, transport, etc. So, if the Manesar plant was engaging contract workers for their core activities too, it is kind of unusual. Actually, government organisations are the biggest culprits in this regard, and, worse still, they don't even ensure the minimum wages for the contract workers - check this.
Mr Bajaj then went to add that the reason for this plainly is the fact that once you have a worker on your rolls, the process of terminating his services, if he turns recalcitrant, is so tortuous that the industries are forced to take the easier option of keeping them all on contract, leading to the kind of disparity, consequent disaffection, and perpetration of such incidents, though the cruelty meted out in this particular instance was beyond all comparison. The obvious answer Mr Bajaj stated was to make it easier for employers to terminate workers, who they have decided are not helping the overall cause any, against payment of a fair compensation package. When another panelist, Mr Anil Padmanabhan, a trade unionist, termed this the "hire & fire policy", Mr Bajaj responded that there was a difference in that a fair compensation, based on the years of service put in, was being paid, in addition to the regular benefits of gratuity and all such entitlements.
An outcome of adopting Mr Bajaj's suggestion would perhaps be that the bargaining power of the workers will then depend largely on their individual skills and thereby their usefulness to the company, as compared to the present situation where it depends mainly on the labour union's collective strength to hold the management to ransom (This is of course why it will not be acceptable to the Anil Padmanabhan's of this world). This will spurr a fair section of them to keep upgrading their skills, and thereby command high wages, particularly in a growing economy. On the other hand, however, there is also the fear that those unable to cope up with the demand may tend to get eased out, though of course they will then be simultaneously collecting their severance packages. Now, very orten, non-performance of an employee is the result of his having lost interest in the job, in which case, it would be in the fitness of things that, putting the severance package to good use, he finds himself something more meaningful to do.
Another outcome would be that employers will no longer hesitate to add on more workers, as may be required, leading to huge alround employment generation, and, since they will all now be employed directly, they will also become eligible for all the benefits, thus ensuring a more egalitarian environment too.
The positives as such are too many, and it is time the government looked at all of them seriously, if it wants to prevent Manesar like incidents to happen again.
Apart from all of these, I would also venture to add that, when every kind of right is being claimed today by all and sundry, and many of them are being addressed by the government, shouldn't there be some basic rights for the employer too? Labour is an important component of any value addition exercise, and therefore every employer would do his best to cultivate his workers. But, for all his efforts, if an employee chooses to remain recalcitrant, why should the employer have to suffer him interminably? Many are the instances where a handful of recalcitrant workers have caused total ruination of industries, placing their own livelihoods, those of their colleagues, as also that of the employer too in jeopardy. The country has paid huge costs on this account already. It cannot afford them any longer.