Nos. 72 & 73, May 2018

Nos. 72 & 73 (May 2018)
India's Working Class and its Prospects


India's Working Class and its Prospects

Simmering Rage II: Fragmentation in the Industrial Working Class and the Crisis of the Trade Union Movement

-- Alok Laddha and T Venkat 1



After 1991, India’s manufacturing sector adopted the lean production model, whereby workers in a given production chain are divided geographically. At the same time, it has also managed to fragment the working class into a number of categories. In essence these categories divide workers who enjoy certain rights and stability of employment (permanent workers) from workers with almost no rights on the shop floor and no stable job guarantees (‘precarious’ workers). Even as neoliberal reforms are drastically reshaping the relationships between the worker, the employer and the State, most trade unions are still stuck in their traditional mode of functioning in this sector. These methods focus on unionising permanent workers and fighting for their rights via legal channels. As the proportion of permanent workers shrinks, the trade union movement is undergoing a crisis. This crisis is due to their inability to organise the precarious workers. This makes the unions ineffective, as they slowly lose all the means to stop the production or seriously challenge Capital. This ineffectiveness in turn means that their current efforts to organise contract workers are easily thwarted by the capitalist class.
In this paper we revisit the origins and the present status of this crisis by analysing the rise of the contract labour and its impact on working class movement in era of ‘liberalisation’. By drawing upon a number of case studies we see how various plant level struggles which involve contract workers in the manufacturing sector have had mixed results in resolving the conflicts in favour of the workers. We then highlight several initiatives that have attempted to overcome the bureaucracy of industrial trade unions and include precarious workers in the struggle against exploitation.

Historical background

In 1970, the Parliament enacted legislation for the Contract Labour (Abolition and Regulation) Act (hence forth referred as the CLA). Prior to 1970, the organized workers, through protests and court interventions, had successfully thwarted attempts to introduce the contract system. A number of judgements by labour courts, high courts and even Supreme Court barred the contractual system, making it difficult for employers in many sectors to contractualise jobs. (Hariparanthaman 2017)  In the Standard Vacuum Refinery case in 1960, the Supreme Court gave a historic judgement declaring that contract workers should not be employed in core production and should not be employed for work which can be done by a sufficient number of permanent workmen. The CLA changed all this as it recognised the rights of the employers to contractualise jobs which were being done by permanent workers. This was a major victory for the capitalist class that had lobbied the State, and a significant reversal for the working class movement. Though deceptively mentioning ‘Abolition’ in its title, it provided the legal frame for the contract system that has come to proliferate in all sectors.

With the advent of globalisation and neo-liberal re-shaping of the economy, contractualisation of the workforce became a key ingredient for the growth of corporate profits. After 1991, there was a structural shift in India’s manufacturing policies, whereby import substitution was to be replaced by export-led growth. In order to unleash the ‘animal instincts’ of India Inc, the regulating abilities of the State were fettered, and the corporate sector was given free rein to appropriate natural wealth as well as exploit human labour power. This shifted the power relations between Capital and Labour.

However, even after the onset of neoliberal economic policies, there was no significant shift in the respective employment shares of agriculture and manufacturing till 2004-2005. After 2005, agricultural employment shows a substantial decrease. Close to 23 million workers (that is 10 percent of the agricultural workforce at that time) abandoned agriculture, and employment in non-agricultural sectors grew by 25 million. (Mehrotra et al. 2014) This shift became more pronounced post-2009, when, against a dip of 13 million in agriculture, non-agricultural employment grew by 27 million in next two years. However the growth in manufacturing employment between 2004-2005 and 2011-2012 was merely 5.9 million.

The majority of this shift happened not to the manufacturing sector but to the unorganised construction sector, where employment virtually doubled from 25.6 million to 50.3 million in the afore-mentioned period. In fact, from the  available Census data it appears that most of the informal workers in the construction industry worked in agriculture for part of the year.  This growth of the workforce in the informal sector of the economy signalled a changing composition and dynamics of the working class.

India’s manufacturing sector (by which we mean registered as well as unregistered sectors), which is what we are concerned with here, accounts for close to 16 percent of the GDP and employs almost 12 per cent of its workforce. (Mohanty and Saha 2017) By the end of 2009-2010, out of 12 million workers employed in the registered manufacturing sector, close to 3 million were on contract. In large factories which employ between 2000 to 5000 workers, the proportion of contract workers was close to 50 percent. In sub-sectors like the automobile sector share of contract workers is as high as 47 percent. If we combine registered as well as unregistered factories in the manufacturing sector, it is estimated that close to 70 per cent of the working class had no written contract and 13 per cent of the workers had written contracts of less than three years. (Sood et al. 2014)

This increasing contractualisation is aided by the fact that, in recent times (post-2014), the CLA has seen amendments at state level. In Rajasthan and Maharashtra, the threshold for coverage under the CLA has been raised from 20 workers and above to 50 workers. In fact, despite all the limitations of the Act, certain clauses, most prominently provisions for abolition of contract work under certain conditions, were an eye-sore for the capitalists. Successive governments in the post-liberalisation era have tried to remove these clauses by (a) amending the Act, (b) creating zones where the Act does not apply and (c) turning blind eye towards rampant violations of this Act. Even the judicial attitude towards contract labour shows a systemic shift post-1991, with many of the judgements displaying a pro-employer orientation. In the Steel Authority of India vs National Union of Water Front Workers case (2001), the Supreme Court ruled against automatic absorption on abolition of contract labour, thereby virtually nullifying the relief for workers under the Act. Many subsequent cases have shown how the judiciary has come on board with the neoliberal paradigm where workers’ rights are compromised at the altar of development of Capital.

While contract labour in manufacturing sector continues to see a consistent growth in the twenty-first century, a natural question arises. How have trade unions, whether at the factory level or central level, reacted to this phenomenon? Before we attempt to answer this question, we must note the following. From 1980 onwards, labour intensity has steadily declined across the manufacturing sector. The numbers here are startling. In the 1980s the manufacturing sector on an average had 3 workers per 2 units of capital; by the 2000s this came down to 1 worker per 3 units of capital. (Sen and Das 2014) In fact inflexibility of labour laws was one of the reasons touted by the capitalist class for the lack of employment growth in industry. However, despite the effective dilution of labour laws, the decline in labour intensity has only intensified with increasing ‘reform’ and trade liberalisation. The impact of this decrease (in labour intensity) on strength of trade union movement is obvious.

2 Understanding the contract labour system

A contract labourer is a worker who is hired either directly by the company or through an intermediary for a stipulated amount of time. They are also hired on ‘piece rate’ when they are expected to complete a certain quantum of work at a fixed rate. Companies argue that such arrangements are needed in order to have flexible supply to meet changing demand. However, the actual gains are made by cutting down on wages, benefits and safety that a precarious worker can seldom claim. Ever more categories are created whose primary aim is to increase exploitation, which often appears to be a twenty-first century reincarnation of bonded labour. There is the well known ‘trainee and/or apprentice’ category2 These workers are hired on the pretext of providing a job to unemployed and inexperienced strata of the labour force (those seeking employment) for a period ranging from nine months to three years. In reality, this training includes participation in core production alongside permanent workers. No labour law explicitly defines this group of workers, and though case laws have included them in the ambit of ‘workers’ under ESI, PF and maternity laws, their rights at the workplace remain at the discretion of labour officers. The current Government is trying to institutionalise this precarious employment under its ‘Skill India’ programme.

In the manufacturing sector, and especially in the automobile belt, more and more categories are created. For example, in the Maruti Suzuki plant in Manesar, one encounters a new category called ‘temp’ (for temporary workers). These workers are hired for a period of seven months and can only be recalled based on their ‘exemplary performance’ (which means total subservience to the employers); even then, they cannot be recalled immediately, but only after seven months’ gap. Thus at a broadest level, we can divide workers in four categories:permanent, contract, trainee/apprentice and fixed term contract (known as temp in certain factories). All these workers do the same job. In factories where the permanent workers’ union is in a relatively strong position, a classic tactic by the employers is to raise them to a ‘higher’ status,and give them the lighter work of relievers and supervisors. When this happens, a fracture is created between the rank and file on the shop floor and the permanent workers’ union. This is seen in most of the factories in Chennai industrial region.

This fragmentation of the workers in a factory should be viewed in conjunction with the fragmentation that occurred in the post-Fordist3 production system where vendor companies supply parts to the main factory which then becomes an assembly plant. In the automobile sector, vendor companies are heterogeneous. The smaller vendor companies are part of the unorganised manufacturing sector, where workers have little to no rights. The bigger vendor companies, such as Omax in Gurgaon (Thozhilalar Koodam 2017a), which recently saw workers’ unrest, have a large proportion of contract workers. Although no concrete data seemto be available on the percentage of contract labour employed by the supplier/vendor companies, it is generally believed by trade unionists and labour activists that the percentage of contract workers in vendor companies certainly exceeds that of permanent workers. This in turn makes unionisation in the supply chain rather difficult.

3 Challenges in organising contract workers

3.1 State-corporate nexus
The beginning of 2016 witnessed an intense struggle by 3,000 workers of the Tapukara plant of Honda Motorcycles and Scooters India (HMSI) in Alwar, Rajashthan. The management allowed police inside the factory gates.The latter unleashed violence on the workers and broke their sit-in strike. This struggle was suppressed with brutal repression by the management, police and the state governments of Rajasthan and Haryana. After the police violence, the management removed all of the 2,500 contract workers and suspended the majority of the permanent workers (almost 500 in number). Police cases were also foisted on 44 workers, including the entire union leadership.

As in the case of the Maruti struggle of 2012, in August 2015 the Honda workers had united across the dividing lines created by the management, and initiated a single union for all workers, permanent and contract alike. After they submitted their charter of demands in December 2015, the management tried to halt the unionisation by a combination of ‘legal’ and illegal means. This included distorting facts in the labour department (Workers Solidarity Center 2016), as well as transfers and suspensions of union leaders. Between December 2015 and February 2016, 800 contract workers were also retrenched. However this barely had any impact on the production of the plant, as trainees, many of whom were not even diploma holders, were brought in from Rajasthan, Haryana and Orissa. They were made to stay inside the factory and acquire the required skills as quickly as possible. Testimonies of many Honda workers (Thozhilalar Koodam 2016b) indicate that these trainees were kept in the factory in an almost bonded labour-like situation for weeks on end till they had sufficient training. This shows that, armed with the Rajasthan government’s brazenly anti-working class stance, the Honda management could counter the union with ease, despite the unity among permanent and contract workers. The outcome of the Honda struggle holds important lessons for plant-level struggles in the current epoch.

At present there are close to 350 permanent and 3,000 contract workers in the Tapukara plant of Honda. Fixed-term trainees number around 300. Out of the 500 permanent workers who were in the factory prior to the 2016 strike, 256 were taken back. None of the trainees or contract workers who were removed after strike was taken back. The class unity which had formed in Tapukara plant in years preceding the strike now appears to be lost for the time being. According to the labour activists working in the region, there is some alienation between permanent and contract workers, as all the contract workers who currently work in the plant were hired during the strike. This is the case even though, unlike the Maruti plant where permanent workers really work as relievers, in the Honda plant permanent and contract workers do the same work. The factory currently has a pro-management union which operators under the banner of Bharatiya Mazdoor Sangh (the labour wing of the BJP). However, it has restricted membership and does not even admit all permanent workers. Some of the retrenched Honda workers tried to fight for justice and to hold the management accountable by holding a fast for 20 days. However with no stoppage in production and no pressure from the administration or the government, managements have no reason to negotiate with workers anymore, and hence the Honda management refused to come to negotiating table with the retrenched workers.

In many cases, a strong unity between all the workers on the shop floor does result in victory for the workers as far as unionisation of the permanent workers is concerned. But here, once again, because of the precarity of the contract labour force, who do not formally become part of the union (primarily due to legal obstacles erected by the State and administration), the limitations of plant level unions emerge as the struggle against the management continues. The Munjal Kiriu plant in Manesar is one such example from recent times. (Workers Solidarity Center 2013) Munjal Kiriu is a joint venture between the Munjal group, which owns the brand Hero MotoCorp, and Kiriu Corporation from Japan. It is a supplier of auto parts to Hero MotoCorp, Honda and Maruti Suzuki. From the beginning of 2013 to late 2014, permanent, contract and trainee workers of Munjal Kiriu showed remarkable unity and waged a protracted battle to form a union for the permanent workers and win their charter of demands. These demands included a wage rise (even the permanent workers of Munjal Kiriu were paid a salary of just Rs 7,000 per month) and regularisation of all contract workers. In spite of intimidation tactics by the management, which included the termination of five out of seven members of the union body, the union was registered in June that year.

A unified union for all workers gravely threatened the management, sharpening the antagonism between the company management and the workers. In September 2013, after the management refused to accede to the workers’ demands, there was a strike in which workers occupied the factory and forced the management to take back the terminated president, vice president and joint secretary of the union. When three contract workers were terminated by the management in December 2013, workers struck work for 7 hours after which, just as in the case of Honda, police entered the premises and lathi-charged the workers. However, the unity between the contract and permanent workers was so strong that they continued their strike for over a month, and this included surviving an attack by company’s hired thugs (‘bouncers’), who attacked and severely wounded several workers. When police failed to register a First Information Report (FIR) after the attack on workers, there was a protest across the Gurgaon belt, with workers coming out on the streets demanding justice. This forced police to register an FIR, and eventually the management was forced into a tripartite agreement in which they promised to take back all the suspended workers. However, shortly after this settlement, the management dismissed the union leaders under false charges, and the ensuing strike by the workers again resulted in police repression and suspension of more workers by the management.

As the struggle went on, the management used the anti-labour disposition of the State to hire a new set of contract workers to continue production. Labour activists and the union of Munjal Kiriu also say that during the times of intense repression the central trade unions displayed no solidarity with the Munjal Kiriu. These activists therefore emphasisethe need to have a joint platform of plant-level unions which do not fall into the ambit of the central trade unions. Such a platform may find expression in the Mazdoor Andolan Sangharsh Abhiyan (MASA), which is discussed in the next section.

With the State taking a pro-capitalist stand under the guise of ensuring the ‘ease of doing business’, even the plant-level unity of permanent and contract workers may be inadequate to effectively fight repression. Examples of this sort of unity emerge on regular basis in automobile belt of Gurgaon-Manesar-Bawal-Tapukara. But the lessons learnt from recent examples show that plant-level unity alone may not be sufficient to tilt the balance of power in the favour of the working class.

3.2 Precarious nature of employment
In many cases, solidarity among workers cutting across social and workplace hierarchies is difficult to achieve. One of the reasons often cited by both trade union organisers and contract workers is that any attempt, or even a rumour, leads to immediate dismissal of contract workers and trainees. A contract worker we interviewed categorically maintained that he would lose his job if he were to attempt any such action. He had been a permanent worker in BYD, Chennai and had lost his job when the unit closed. He partly blamed the unions and their strategies for his present condition. In many factories, contract workers don’t even speak to permanent workers or union organisers for fear of reprisals. Describing this predicament for organisers, an employee of Renault Nissan, active in organising workers, narrated a case in which contract workers had approached him to help them find a lawyer to win back the PF contributions that their previous contractor had not credited. When he raised the subject of forming a union, they immediately withdrew, saying that it might cause them to lose their present jobs. It is widely acknowledged by all workers that contract workers and trainees tend to do a disproportionately greater share of work, suffer more abusive supervision and find it harder to get leave. “If we raise any issue, they say that we can leave if we don’t like the job. There are others willing to work.” said a contract worker. “It is true that it is easy to find a replacement as there are enough migrant workers here willing to work under even worse conditions.”

The judicial system plays a very sinister role in maintaining the discrimination among workers. Permanent workers have better access to the labour department’s conciliation process and have some opportunities to stall action by management against them by raising industrial disputes. But a similar strategy is difficult for contract workers to employ. First, the issue of legally identifying the ‘employer’ is left to the discretion of the labour officials. Though every law designates the principal employer as ultimately responsible, labour officers tend to pin down the immediate employer. This delays the process. It is also easy for the principal employer, and in some cases the immediate employer, to deny that the person was a worker, because of the lack of a paper trail. Even if contract workers are able to negotiate this process, they would still not be entitled to the wage support that suspended workers can avail of. This places a greater burden on them while fighting the case. Invoking CLA can be counter-productive as the law, while abolishing certain forms of contract work, does not specify what happens to the workers who undertake those jobs. Thus it’s the flip of a coin whether a contract worker can get to retain his/her job or lose it due to a court order under CLA. (Ray 2016) As we had seen earlier in the SAIL (2001) case, the apex court had ruled against automatic absorption.

In January of 2016, 2,400 workers in Lucas TVS Chennai (Thozhilalar Koodam 2016a), classified as apprentice, were summarily dismissed after they had protested against canteen facilities and long work hours. Given that many of them had been drafted into the shop floor as company apprentice workers, the company successfully argued that they did not fit the definition of worker within the law and could not claim any protection. Though the issue was taken up with the labour department, the company refused to-re induct them. Only those who had not participated in the sit-in strike or those who agreed to abjure from making such demands were taken back. The company easily replaced the rest of the workers with new recruits from local ITIs. No labour law (with the exception of the Apprentice Act) explicitly recognizes trainees within the ambit of ‘workers’. Though most social security laws have been interpreted by courts to apply to trainees not employed under the Apprentice Act, trainees have to fight a long battle through the conciliation process before they can legitimately claim their status as ‘workers’. This requires sustained legal support without expectations of financial returns. Where such support is available, they have been able on occasion to establish their status and get their rights recognised.

As the Honda struggle reveals, even where workers engage in strikes and protests, the ensuing repression may have different consequences for permanent and contract workers. This is because the permanent workers can challenge the management’s suspensions and terminations in labour courts, while the contract workers have no such avenues. Time and again contract workers have found themselves at the adverse end of strikes and struggles, lock-outs and closures. While permanent workers are guaranteed a certain compensation, contract workers simply have to walk away. This makes it difficult for a plant-level union to evolve strategies that can be acceptable to both temporary and permanent workers. Isolated struggles of contract workers, trainees and apprentices where permanent workers are not involved are doomed to fail in these times.
3.3 Manufacturing a dispensable worker
In July 2016, over 100 workers of NHK F Krishna Automotive, a components supplier, demanded that they be provided permanent jobs with the company as they had been employed for over three years. (Thozhilalar Koodam 2016d) They had all been hired through a contractor. The company refused to even recognise them as workers. The contractor refused to employ them again. The company, on the other hand, brought a small number of technical workers from its Delhi-based sister concern, and recruited the required number of contract workers from a new pool. Production at its plant was disrupted for less than a week. Though the workers raised a dispute with the labour department, they lost their jobs and wages. As the issue dragged through the labour conciliation process, many had to fend for new jobs on very similar terms and conditions.

Earlier, when experienced workers struck work or quit en masse, companies could not re-start production easily. This empowered the workers in their negotiations. But the march of technology, and a concerted effort by management, has enabled a production environment where a skilled worker has become dispensable. The general secretary of the workers’ union at Royal Enfield plant in Chennai elaborated how this shift took shape in his factory:

Before the 1990s, a worker would do two or three specific engineering tasks on a component before moving it to the next worker and down the line. The final component would have changed hands many times before being fully processed. Workers were specialised in these tasks. From 1990s, complex machines were erected that used to do most of the processing required for each component. Our task became more of setting the component in proper place, switching the machine on, checking the component. This requires little skill. Today the machines have advanced further using CAD (Computer Aided Design). Similarly, the company also introduced Japanese managerial techniques that sought to devalue the skills of individual labour in the name of organizational flexibility. This meant that all workers had to gain the skills necessary to work at any point of the production line. Also processes and technology was put in place that undercut workers experience. This enabled the steady replacement of trained and experienced permanent workers with casual workers and trainees.

In Royal Enfield the trainees are employed for a mere nine months, and only some get their training renewed. There has been no recruitment since 1985 of permanent workers, with the number of permanent workers falling from 1600 in the 1990s to 94 at present. In 2016, the company absorbed a batch of trainees as ‘Assistant Engineers’, a supervisory cadre, but without the perks of the managerial staff.

The process of de-skilling is not a recent phenomenon. We can trace its early origins from the age of powerlooms and factory-based production. The earlier ‘Fordist’ model also incorporated this technological trajectory,which enabled Capital to employ and train workers with progressively lower skill levels. However, today this process has advanced so far that it has dramatically altered the production relationship on the assembly line. Automation, especially in the manufacturing sector, is gravely threatening the mid-skilled and high-skilled labour force,who can be replaced with low-skilled or semi-skilled workforce. This is becoming visible in the growing share of trainees, who remain trainees in perpetuity. In the Honda factory at Tapukara that we analysed in the previous section, trainees had to clock in eight years of service before they could even become eligible for a permanent job. Quite often workers move from one factory to another as trainees, clocking one to three years in each factory. This also enables companies to dispose of workers with ease, as the cost of training a fresh batch of workers is significantly lower. This also means that companies prefer to employ younger workers with less experience, as it would be cheaper than hiring or retaining workers with many years of service with higher wage demands.

One of the keys to a robust organisation among workers is the level of interpersonal communication and trust among members. This increases proportionally to the duration they work together and common experiences they share, both on the factory floor as well as in their personal lives. By rotating workers at a very rapid pace, managements can effectively thwart the formation of unions. Shorter durations also lower the expectation among workers regarding their working conditions. These then remove the motivation to fight. Workers tend to choose other strategies, such as submitting to authority, or hopping from job to job, as these have far lower costs than protesting on the streets or in the courts.

3.4 Fragmentation of ‘workers’ and its effects on organising
Until the 1990s and even into the 1990s, the predominant workforce in most organised sector factories was permanent workers on the payrolls of the company. On the assembly lines, and often even including the canteen and housekeeping staff, all the workers would enjoy a similar legal status and avail similar benefits. Though contract workers were employed, their proportion to the total workforce and their role in production remained limited. This began to change with liberalisation in the late 1980s itself, and much further after 1991. Not only did the number and significance of contract labour increased in production, more diverse forms of relationship began to emerge between the company and the workers. Today it is typical to find that on the same assembly line we have permanent workers, contract workers and trainees working together. Though they do the same task, different categories of workers get different wages and perks. Many of the ancillary tasks, from house-keeping, to running the canteen and even certain processes within the production cycle get outsourced to entirely different companies. The vagueness of the immediate employer and the many filters between the principal employer and the worker allow for discrimination between workers on wages and working conditions, further fragmenting the workers. This has serious consequences in their efforts to organise.

3.4.1 Dissonance in demands
By differentiating workers the management is able to seed dissonance between them in evolving a common demands charter. In most of the establishments, the differences in pay scales and working conditions between permanent and precarious workers are so wide that any call for equality seems utopian. For example, a permanent worker in MRF factory in Chennai gets around Rs 30,000 per month. They have been demanding a significant increase in wage for the past eight years; the wage negotiation has broken down and the case is stuck in court. Even this meagre salary in a metropolitan city like Chennai seems generous when we consider that a contract worker in the same factory, doing the same work, gets paid between Rs 8,500 and Rs 10,000 a month.

While some of the workers have participated in national strikes demanding wage parity among all workers, in conversations they show little confidence regarding the feasibility of such a demand. Instead many argue that the contract system should be abolished. Unfortunately, when such issues move towards negotiation, the trend has been to agree to increased contractualisation to meet work pressure rather than creating permanent jobs. Union representatives, during their negotiations, seldom prioritise either equal pay or absorbing contract workers into the permanent workforce. The fact that many of the contract workers are also employed through contractors adds to the dilemma for plant-level unions to raise these issues.

It would be wrong to conclude that successful attempts are not made to raise common demands. However such attempts are successful when the wage and working conditions of permanent and contract workers are very similar. For example in 2014-15, workers in BYD, a supplier to Nokia, did a major sit-in strike collectively demanding eight hours’ work for all workers and wage parity. Though the protest was broken using coercive methods, it did illustrate the possibility of joint action. Similarly, the earliest struggles in the Maruti Suzuki struggle (2011-12) in Manesar and the Honda Motors struggle (2015-16) in Tapukara did involve contract and permanent workers. But such solidarities tend to fall apart as their wages and working conditions diverge further.

3.4.2 Discrimination at work
“This is like a caste system” said a MRF worker when discussing the contract system. “There is a lot of discrimination at work and in canteen facilities. Contract workers usually end up doing more work than us because they get less time to rest. There is more pressure on them from the supervisors. They are also not provided the necessary clothing and safety tools. In fact they do work that a permanent worker will never do.” He was referring to hazardous work like cleaning steam pipes, chemical-based work and other tasks deemed too dangerous. There is a separate canteen for permanent workers and other workers at MRF. Ironically, it was the permanent workers who demanded the separation because the contract workers, who did not get necessary time and supplies to wash themselves after work, used to bring in grease and carbon dust (from the tyre manufacturing process). “We used to do this work before.Whatever you wear, you will be covered in black dust. This was contracted out. [Thereafter] when they [the contract workers] came to eat at the canteen, permanent workers complained, and so a separate canteen had to be provided for them” he said. In many other companies, in the name of cost cutting, certain food products are not provided for contract workers and trainees. In Renault Nissan, the budget for daily food varies between contract workers and permanent workers. This means the difference of a banana or an egg. It could even be as small as a cup of tea. But such minor differences reinforce the hierarchy.

The trainees’ strike in Lucas TVS in 2015 was in fact triggered when the trainees were forced to eat only after the permanent workers had finished their lunch. This meant that neither would they get hot food, nor would all the vegetables be served. This angered the trainees, leading to a hunger fast that turned into a sit-in strike. Though the permanent workers at Lucas TVS sided with the trainees and even planned to forego a day’s lunch in solidarity with the trainees, the INTUC union dissuaded the workers from any such action.

In many instances, permanent workers do not proactively take up the case of contract workers and trainees. In fact, in many cases permanent workers actually dissuade the union from engaging in the issues of contract workers. A union leader at Royal Enfield factory in Chennai said that during the elections, one worker had sought guarantees that he would not drag permanent workers into resolving issues of contract workers. AICCTU’s withdrawal from Shanti Gears, Coimbatore is also an example of such disunities among the workers. A.S. Kumar, a ranking office-bearer in AICCTU, indicated that such tendencies among permanent workers arise out of a deep-seated sense of self-preservation. “We should not blame the workers, it is imperative that we understand them and find ways to improve the class consciousness of the workers,” he said.

3.5 Social discrimination leads to fragmentation
These differences on the shop floor are further complicated by social discrimination built into our system. The workers are further divided on the basis of region, ethnicity, caste and gender. While it was hard for us to extricate the caste dimension at play, the role of ethnicity and gender was much more visible for scrutiny. India has suffered unequal development since the colonial times. Neoliberalism has only accentuated this process manyfold. Internal migration takes place in the framework of unequal regional development. Thus, while industrial and commercial centres in India are a ‘mosaic’ of ethnicities, they have not become a ‘melting pot’, unfortunately for the working class. While they labour together, the different ethnicities retain their cultural boundaries leaving little scope of inter-group engagement. Unions, led usually by local workers, complain that language is a major barrier to organising migrant workers. They also complain that the migrants, looking for high wage jobs here, are not interested joining unions. While these are valid constraints, we cannot also overlook the attitude of native workers to their migrant siblings. Often you find native workers disparaging the migrants for their habits while also accusing them of depreciating wages and ‘taking away their jobs’. Though it might not boil over into violence, the underlying tension does not allow for class solidarity. Regional chauvinist tendencies and politics also play a role in dividing the workers. 

Most of the automobile sector employs very few women. But other manufacturing sectors, especially the electronics sector, do have a significant number of women workers. The garment industry is predominantly female. The structure of work-life differs widely, making it difficult for male and female workers to interact effectively. In Neemrana, Rajasthan, factories have begun to draw upon female workers. A union organiser, who had been recently suspended from Daikin India, said that while men stay back in rooms in and around the region, women go back to their homes as quickly as possible. Given that most of the organising effort happens outside the factory (in order to prevent identification and victimisation), it becomes difficult to organise women. Cultural taboos also play a part. This apart, sexual harassment at the workplace tends to break class solidarity. In Amazon’s development centre in Chennai, a female worker suffered harassment by a supervisor. While the HR officials tried to overlook the complaint and even shift blame, even her colleagues failed to stand by her. Some even advised her to take it ‘in spirit of camaraderie’.  Even where unions exist, the leadership fails to proactively take up these issues. In the Renault Nissan factory, when a pregnant worker was abused for taking many breaks, the workers went on a lunch boycott demanding action. But the union leaders (the union is a management-anointed ‘independent’ union) refused to take up the issue, allowing the HR department to ‘resolve’ the issue by negotiating with the victim’s husband.

In spite of the differences, women and men, migrant and native, contract and permanent have fought hard struggles together. The level of exploitation and alienation under capitalism overcomes cultural boundaries to bring about class solidarity. But sustaining the solidarity, increasing fraternal trust among the workers and forging a united class against the myriad of tricks to divide the workers, requires a class organisation that can provide democratic space and power to all workers equally. The task of raising and nurturing such organisations falls to the union leadership and broader political movements.

4. Problems in, and scope for, organising contract workers
In the last several decades, trade unions, which had steadily become bureaucratised under the welfare state, failed to grasp the threat posed by fragmenting workers into ‘permanent’ and ‘temporary’ categories. The central trade unions failed to fight the anti-worker provisions in legislations such as the CLA, and failed to fight to abolish arbitrary differences that increased precarity among the workforce. At the plant level, unions began compromising on the question of the growing use of contract workers. For example, in MRF, every wage agreement after 1993 had a clause that allowed for the increase of contract workers. The increasing work pressure emerging out of mechanisation forced permanent workers to agree to inclusion of ‘helpers’ who were contractual workers. This process only led to further erosion of their ability to wage a powerful struggle, as management could use contract workers to maintain production even if permanent workers went on strike. Similar is the fate of unionised workers in various factories including Ashok Leyland, Royal Enfield and other factories in Chennai’s automobile belt. Many industries operate with an over 50 per cent share of contract workers. The outsourcing boom in the later 1990s has significantly contributed to further contractualisation, as many of the small scale suppliers operate with a much higher proportion of contract workers. Though this trend underlines the need for organising contract workers, the consequence is the opposite. Given the depleting strength of permanent workers to challenge the management through protests, unions tend all the more to stick to negotiations or legal action. This leaves even less scope for the unions to attract contract workers, as they might not be able to support the contract workers substantively.

‘Legalism’ dominates the strategic thinking of trade unions. It feels safer and easier to engage management through the legal statutes and process rather than mounting a struggle at the plant level. Even militant unions like those at Ashok Leyland and MRF, with a history of protracted and successful strike actions, have now come to rely on legal strategies. Even unions affiliated to national level federations such as CITU, AICCTU etc tend to take the legal recourse as the principal strategy. This trend is well reflected in the steady drop of strike actions from over 3000 in 1973 to 179 in 2011. (Lansing and Kuruvilla 1987; Yadav 2015) Labour laws in India have been deceptive as they gave an illusion to the workers that there were redressal mechanisms which addressed the economic concerns of the workers. Even after the actual practice of more than two decades has shown the inefficacy of such mechanisms, established trade unions tend to rely on the legal system for protection and arbitration, thereby leaving the workers perpetually occupied in the cobweb of court proceedings and tripartite negotiations. Even as the State is now engaged in codifying labour laws such that the process of unionisation (even among permanent workers) itself becomes an uphill task, the modus operandi of central trade unions is to exhaust all the legal options, a process which takes years on end, before even considering options like strike or stopping production. This saps the militancy among the workers at a factory level while allowing companies to profit from such long delays.

Negotiation occupies the bulk of the effort and energy of such unions. They keep themselves busy in prolonged talks at various levels,from government ministers, state level officials to company HR managers. The formal sector employees, who form the fighting strength of the large trade unions, have some scope to win wage-related demands, while the demands of the contract and precarious workers get relegated to lower status on the charter, or get escalated to higher tiers of the adminsitration/government. While demands for wage increases for permanent workers are settled at the plant level, often contract workers’ demands are viewed within the frame of ‘minimum wage’ and are discussed at the national level. Unions at the plant level do not proactively take the case of ‘equal pay for equal work’ and represent contract workers in such negotiations. Interestingly, in Shanti Gears, Coimbatore, a union led by AICCTU did manage to strike a collective wage agreement that included contract workers. But after a year, AICCTU had to relinquish leadership of the union as sections of the permanent workers felt that union should not proactively include contract workers’ demands for permanent status.
As plant level struggles continue to be stifled by the capitalist class amply aided by the state apparatus, there is an urgent need to come up with new and more militant initiatives which do not rely so much on the legal mechanisms as to be handicapped by them. Historically, in non-manufacturing sectors such as mining, there have existed unions such as the Chhattisgarh Mines Sangarsh Sangh (CMSS) and the Singareni coal miners union (Thozhilalar Koodam 2017b) which fought the mining mafias and the State in defence of workers’ rights. However, in the organised manufacturing sector, different tactics are required to ensure that struggles are effective. 

National federations
Central trade union organisations (CTUOs) are affiliated to parties with widely varying political ideologies, including the parliamentary Left, the Congress and the BJP. Several of these parties openly promote neoliberalism and right-wing politics.The CTUOs ritually conduct national strikes every year; generally one or the other Central trade union (typically the one associated with the ruling party) refuses to participate. The CTUOs’ charter of demands marginally expands every passing year, even while their old demands are not met. So far their response has been restricted to symbolic one or two days’ strikes, which by their nature do not have a significant impact on the present order of things. (Thozhilalar Koodam 2016c) Beyond paying lip service to the question of the exploitation of precarious labour, no significant initiatives have been launched by CTUOs at the national level to fight contractualisation. CTUOs’ primary strategies are legalism and annual nationwide protests to bring the State and capitalist class to negotiating table.

In these conditions, a number of political organisations , independent unions as well as solidarity platforms have been fighting for rights of contract workers to unionise and demand regularisation of their employment, and forming broader platforms in this course.4 Whatever the final shape such efforts finally take, they indicate the need to find new, struggle-oriented forms to make a breakthrough in the working-class movement.

Regional formations
Workers in the Neemrana-Tapukara industrial belt in Rajasthan have launched an initiative to build a regional level platform. As we saw above, despite the resolve of the Honda workers, their fight for unionisation was not successful. A similar protracted struggle has been taking place in the Alwar, Neemrana factory of Daikin, the world’s largest air conditioning manufacturer. The Neemrana plant is the sole plant of Daikin in India, with a turnover of Rs 1200 crores, but workers’ salaries have remained abysmal. Permanent workers in the factory get around Rs 12,000 to Rs 13,000, and contract workers get close to Rs 10,000 a month. Since 2013, Daikin workers have been fighting for their fundamental right to unionise, with a clear unity between permanent and contract workers. This protracted effort has seen multiple strikes (with one strike stretching to 41 days in 2014), management repression via retrenchment and suspension of workers, and ongoing legal battles.

Over the last four years, the struggle of Daikin workers has continued to evolve. As the condition of contract workers in Daikin and other factories in Rajasthan is precarious, Daikin union members realised that any realistic chance of involving contract and casual workers in the union would require them to form a union not at the factory level, but across the region. After the Honda struggle, workers from Honda and Daikin plants  have taken a leading role in establishing “Mazdoor Sangharsh Samiti” (MSS), which is a joint platform for permanent as well as contract workers in the Rajasthan industrial belt to fight for their rights. As an early sign of what MSS may accomplish, workers marched in strength inside the infamous Japanese zone in Neemrana, enforcing the 2nd September, 2016 all-India strike. As the management victimised the workers who participated in this march, MSS organized a dharna on 9th September, 2016 in protest. It is early days for initiatives like MSS, but it is encouraging to see that workers are trying out new forms of organisation which overcome the difficulties in organising precarious labour at the shop floor. (Thozhilalar Koodam 2016e)

Sectoral formations
While efforts to organise contract workers in the automobile sector in Tamil Nadu has been minimal, the garment sector, which has a high degree of contractualisation, and the Government service sector such as conservancy, sanitation and water supply (which also has a contract worker share of over 50 per cent) have shown promise. In both cases, contract workers are organised at a sectoral level rather than plant level. For example, AICCTU has been attempting to organise TWAD (Tamilnadu Water and Drainage) Board workers under the rubric of a state level informal sector union (Uzhaipoor Urimai Iyyakam – Labourers’ Rights Movement). Similarly GAFWU (Garments and Factory Workers Union) in Chennai and GATWU (Garment and Textile Workers Union) in Bangalore are examples of sectoral unions among garment workers. It is hard to organize garment workers on a factory basis, because of the precarity of employment as well as the footloose nature of the companies. By organising at a sectoral level, these unions can partially mitigate the risks attached to plant level organising while maintaining their membership even as the members migrate across companies in the sector. Another successful initiative has been the organising of cement workers in Chhattisgarh by Pragatisheel Cement Sangarsh Samiti (PCSS). Here again contract workers from over 10 different cement companies are part of the union, and PCSS is able to negotiate across the sector to maintain jobs, restrict retrenchment and wage scales. Their recent engagement with Lafarge Holcim has been well documented.

Cooperatives as a form of struggle
While much emphasis in this article has been placed on unions and their ability/inability to organise contract workers, we have come across one unique attempt that tried to organise contract workers into a workers’ cooperative rather than into a union. Many such attempts at workers’ management have been attempted in the past with varying degrees of success. But such attempts, outside of socialist countries, have largely been linked to permanent workers who took over sick or bankrupt industries. In India there is the well documented story of Kamani Metals in Mumbai.These ventures have not succeeded, given the nature of the economy within which they were situated. However in IIT Kanpur, during the early years of the New Economic Policy, an experiment was initiated among contract workers being hired for housekeeping and canteen work. (Varman and Chakrabarti 2004) With the concept of ‘outsourcing’ gaining currency, the IIT administration had begun contracting the housekeeping jobs to contractors. The construction work was always contracted out. The workers, mostly migrants, were being paid less than the minimum wage. Even when the faculty, staff and students of IIT began raising these issues, the contractors managed to continue this illegal activity. Any attempt by workers to raise complaints led to immediate loss of their jobs. With the help of some members of the IIT faculty, some of the workers decided to form a cooperative and cut out the middlemen (the contractors). This would enable them to gain better wages. Though initially it was planned to also bring in construction workers, it shaped up to be a cooperative of about 150 workers. Calling itself the SAMITHI, it bid for the more regular jobs of housekeeping. After initial hurdles in the form of administrative requirements, the Samithi was successful in taking contracts and was the only contractor that paid minimum wage and more as a norm. Presently the cooperative has not evolved further and has about 250 workers. Its presence has also helped other sanitation workers to get better and regular wage. Thus the workers’ cooperative was used as a form of struggle.

These attempts at organising contract workers are not ‘success stories’ to be emulated or replicated. These are ongoing experiments from which to take lessons as well as inspiration, by noting the possibilities for workers’ collective action even in the face of enormous challenges, confronting an array of forces attempting to divide workers and maintain them under conditions of extreme exploitation.

5. Conclusion

Informalisation and contractualisation have become the dominant form of employment in the manufacturing sector. Even the white collar service sector is coming under the spell of these forms of labour arrangements. In this context the article attempts to understand the lack of efforts from established unions at organising the contract workers. By focusing on case studies from the manufacturing sector, we analyse the different objective and subjective reasons behind the minimal extent of organised contract workers and its impact on working class politics in general. Our case studies also include the some of the recent and past attempts to forge a viable organised resistance to Capital. Given the numerous occasions when fragmented workers have managed to forge unified struggles across social and economic barriers, there is a significant potential to mount an effective resistance to neoliberal reforms. But for it to become successful, the present organisation of unions will have to undergo a radical transformation. Working class unions need to forge solidarity with a clear working class agenda. In the course of concrete class struggles, unions with ideological allegiance to neo-liberalism will and should be isolated  so that the working class agenda is not compromised. Structurally unions have to break away from the bureaucratisation and democratise themselves. They have to break out of the legalist frame that reinforces the fragmentation of workers. Rather they should focus their efforts on unifying the fragmented workers and evolving organisational forms that can be inclusive. Indispensable to the very survival of the working class movement is that it develop the ability to effectively organise the ever-increasing proportion of precarious workers.


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1. Alok Laddha and T. Venkat are part of the editorial team of Thozhilalar Koodam (, a Chennai-based labour news portal, from which this article draws extensively. The authors also acknowledge the contributions, support, and valuable inputs of Workers Solidarity Center, Gurgaon, as well as the contributions of numerous trade union leaders, factory workers and  trainees who were willing to provide information and views. (back)

2. This category is not the same as that of an apprentice hired under the Apprentice Act. They are not considered workers and are not included in any wage agreement, social security benefits etc. They are also not absorbed into the workforce after the mandated training period. They are issued a certificate of completion. During the period of training they are eligible for a stipend, paid partly by theMinistry of Skill Development and partly by the company. (back)

3. The term ‘Fordism’ refers to the industrial regime associated with the automobile manufacturer Henry Ford, who in the early 20th century instituted mass production techniques centralised in large factories.Correspondingly, ‘post-Fordism’ here implies the late 20th century practice of outsourcing of many activities earlier centralised in the main factory to dispersed, generally smaller, units. (back)

4. One such is the earlier-mentioned Mazdoor Andolan Sangharsh Abhiyan, which includes 14 unions/organisations – larger federations like Trade Union Centre of India, Indian Federation of Trade Unions, as well as independent unions like Maruti Suzuki workers union, BellSonica Workers Union etc. The aim is to co-ordinate nationwide struggles against the labour law reforms and contractualisation, and to fight for the immediate demands of the workers in the informal sector like the minimum wage. (back)




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