Labour Day 2022: Workers’ participation in management remains a distant dream

labour day 2022 musings
On Labour Day 2022, it would be interesting to revisit the role of workers’ participation in management amid the fragmentation, segmentation and dislocation of the workforce.

The International Labour Day comes every year with a reminder that employees are not supposed to be mere objects of the management’s decisions, but a part of the decision-making process, upholding human dignity and establishing a democratic work space. Such participation is an integral part of labour laws and is as valid today as it was in the formative era of labour legislation.

The Industrial Dispute Act, 1947 has provided for works committees and grievance redressal committees which are the primary forums where labour disputes are taken up for reconciliation. In the newly enacted Industrial Relations Code, 2020, such forums have been incorporated. However, if we look at the trend, particularly during the last two decades, works committees have lost their relevance to a great extent. This is very much connected to the ways in which production structure and labour process are conceptualised.

One of the preconditions of meaningful workers’ participation in management is that there exists an identifiable workplace where employees are working together on the premises of the employer. This is something that has degenerated significantly over the last two decades because of the proliferation of non-standard and precarious employment. There has been a large-scale decentralisation of the production structure and subsequent dispersal and outsourcing of the production process.

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Labour Day and the changing world of work

The impact on the labour process is significant in the sense that most of the workers are not legally tied to their employer. There has been a systematic dismantling of employer-employee relations and a consequent identity crisis of the working class as a whole.

The fragmentation, segmentation and dislocation of the workforce are an increasing trend. Not only does the diversity of interests of the different categories of employees make it difficult to articulate a collective voice in participating but also, perhaps even more, isolation and individualisation prevent collective consciousness. The necessity to work on the employer’s premise is gradually fading away. Outsourcing and digitalisation allow that work to be performed from anywhere.

Vertical structures are being replaced more and more by so-called flat hierarchies. Thereby, existing differences of interests between management and workers do not disappear, but are less obvious and visible. The identity of the working class is significantly diluted. Working-class issues are being perceived as citizen’s issues. Employers’ legal obligations are increasingly becoming redundant in the current context.

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Employment vs self-employment

For quite some time, it has become difficult to distinguish between employment and self-employment. There are an increasing number of people who are apparently seen as self-employed, but in reality are simply employees. Since the employer-employee relation is very hazy or at best, ambiguous in such instances, the application of workers’ participation in management does not arise. Labour laws, except a few, do not apply either. This is a kind of labour process that is conceptualised to avoid implications of existing labour laws and the consequent legal responsibilities.

We need to find ways to include such ‘self-employed’ people within the ambit of labour laws. It is difficult to determine their status with a conventional yardstick. Further, there are genuine self-employed people who earn their livelihoods by doing small economic activities like selling vegetables on the roadside or opening a cycle-repairing shop. They belong to a category of self-employed people who perform the work by themselves in person and who have no wage. The ILO has created a label for them: dependent self-employed.

In the majority of legal ecosystems across the world, there is a ‘binary divide’ between employment and self-employment, with ‘employment’ serving as the basis for labour regulation. However, some employment relationships can be ambiguous when the rights and obligations of the parties concerned are not clear, or when there are ‘grey areas’ in the law. Under dependent self-employment, for instance, the worker performs services for a business under a contract different from a contract of employment but depends on one or a small number of clients for their income and may receive direction regarding how the work is to be done.

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Labour Day thought for gig workers

The rise of the ‘gig’ or ‘on-demand’ economy in recent years, whereby work is mediated through online web platforms or apps, has brought renewed attention to dependent self-employment and disguised employment relationships. Workers in the gig economy are almost invariably classified as independent contractors, despite the fact that their work may be closely supervised and their pay is directed through a specific application or internet platform.

It has become normal for companies to achieve new mobility in the way production and labour process are conceptualised. It makes sense to talk of a ‘volatility’ of legal structures, as virtual corporate networks emerge, areas are outsourced, companies are run without formal group structures and transnational cooperation is becoming a common feature. Dislocating strategies are on the agenda. The enterprise often is turned into a mere virtual entity. The ‘fissured workplace’ has become a sort of catchword for this extremely complex development. Digitalisation and globalisation are further and mutually pushing this trend.

The transformation of the world of work is so fast that legislations are not able to keep up pace with all these technological changes. Legislation can only provide a relatively flexible framework. Solutions balancing the needs of companies and the workers are to be developed at a decentralised level, at the workplace and within companies. This is something which is lacking in the way workers’ participation in management is visualised in the newly enacted Industrial Relations Code 2020. The new code has retained the old structure which has become largely redundant in the present context.

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Dr Kingshuk Sarkar is an associate professor at the Goa Institute of Management. He has worked as a labour administrator with the government of West Bengal. He earlier served as a faculty member at VV Giri National Labour Institute, Noida and NIRD, Hyderabad. Views expressed are personal.

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