Search the Internet          Tips  Sites: Finance, Investment

Unions take on NDA govt over labour reform

Powerful trade unions in the country have buried their differences and are vowing to derail the government's plans to ease rigid labour laws, a key plank of its proposed "second generation" of economic reforms.

Analysts said that measures aimed at making layoffs of workers easier were in danger as the unions, backed by belligerent political parties, confront the coalition government just as it is struggling with dissent and eroding popularity.

Union leaders have said they plan to meet on Thursday at the office of the Bharatiya Mazdoor Sangh, which is allied with Prime Minister Atal Bihari Vajpayee's party, to announce a nationwide protest against labour reform and privatisation of state firms.

"They have chosen the time and venue well," political economist Prem Shankar Jha said. "They think this is a good time to go after the government now that some of the allies have lost elections and what better signal than to do it from the BMS premises," he said.

While Vajpayee's Bharatiya Janata Party was a side player in the state elections this month, two of its regional partners lost power. Vajpayee said the vote was a wake-up call for the coalition.

"I doubt if the government has the capacity or the willpower to push through any of the second generation of reforms anymore," said Jha.

The labour measure was a main feature of the government's 2001-02 reform-oriented budget. It has been a longstanding demand from business which says current laws, the legacy of decades of socialist thinking, hinder it from exiting unviable ventures.

The BMS, an offshoot of the powerful Rashtriya Swayamsevak Sangh, said there was no turning back on its collision course with the coalition.

"It might embarrass the government but we are thinking of the country's interests, not this government's," said A N Dogra, secretary of the BMS.

"The one good thing this government has done is to unite all the unions regardless of ideology," he said.

Labour erased

A leftist trade union said there would be "no labour left" and little place for unions if the government pushed through the plan to allow firms to hire and fire employees at will.

Under the plans in the budget, firms employing up to 1,000 workers would not need government approval to lay off employees. Previously only firms with fewer than 100 workers were allowed to cut staff without government consent.

More than 80 per cent of the industrial workforce is employed by firms with less than 1,000 employees, Tapan Sen, secretary for the leftist Centre for Indian Trade Unions, said.

Vajpayee told a labour conference that ended at the weekend there would be no retreat on the reforms programme and said it was wrong to call the move to change labour laws "anti-labour."

But commentators said it was doubtful Vajpayee could "match words with deeds".

The Business Standard in an editorial entitled "Vajpayee's lot" said labour reform required legislative changes for which he did not have a majority in the upper house of parliament.

"The power configuration is such the government has virtually no room for manoeuvre in which it can pursue, even if slowly, policies which would inspire confidence," the paper said.

Trade union leader Dogra said the unions would also fight the programme to cut the government stakes in state firms and a decision to allow foreign direct investment of up to 26 per cent in the defence production, so far a state monopoly.

The BMS has called for a nationwide strike at defence factories in July against the move to open up the sector.

Tell us what you think of this report