Pathway Towards Formalisation of Migrant Labour post-COVID-19

Introduction

The COVID-19-induced lockdown imposed by the government of India has brought to fore some of the country’s harshest realities. The ongoing migrant crisis is perhaps the most prominent illustration of the same, since it uncovers the socio-economic vulnerabilities confronted by a vast segment of India’s workforce and the apathy being displayed by governments in securing their health, well-being and transportation arrangements for the journey back to their homes. 1

Over the course of the lockdown period, lakhs of migrant workers in affluent cities have left – some of them on foot – for their native constituencies after being stripped of their wages and livelihoods amidst an unrelenting battle with hunger and unhygienic living conditions. 2 While none of the adversities faced by the migrant workers are a consequence of the COVID-19 pandemic or the lockdown alone, the magnitude of the crisis must invoke a reassessment with regards to the legislative and administrative framework governing the status of these workers. The focus must shift from ad-hoc and often, poorly implemented welfare policies, towards formalising the labour market and getting migrant workers on the socio-economic map of India.

While Census 2011 pegs the total number of migrants in India at 139 million, the Economic Survey of India 2017 estimates that inter-state migration in India was close to 9 million annually between 2011 and 2016. 3,4 Much of the latter can be attributed to circular or seasonal migration where workers from poor states like Uttar Pradesh, Bihar or Madhya Pradesh migrate to industrialised areas of Maharashtra and Delhi to work as construction and transport workers or even as street vendors and domestic helpers in urban residences. These are temporary workers with no official count or identity and find no place in India’s social security framework.

Their informality can be gaged by the Periodic Labour Force Survey (PLFS) 2018 which estimates that among regular wage/salaried employees in the organised or non-agriculture sector, more than 71 percent had no written job contract and nearly 50 percent were not eligible for any social security benefit. 5 The conditions would be even worse for the estimated 10 million street vendors and 50 million domestic workers in India. 6,7

As stated earlier, the COVID-19 pandemic has reinforced the notion that the migrant workforce is the most neglected strata amongst the Indian electorate. In this context, it is important to evaluate the potential impact of labour law relaxations announced by a bunch of Indian states on the indicated formalisation agenda. Likewise, the proposed labour code reforms by the central government must be scrutinised to assess whether they are comprehensive enough to address the many nuances of labour market formalisation, especially in the aftermath of the COVID-19 crisis.

Finally, it is imperative to locate best practices from selected Indian states where demonstrated success has been achieved with respect to formalisation of migrant workforce across sectors like construction, transportation, inter alia. This would provide useful guidance to follow given that much of the administrative burden in respect of the migrant workers lies with state governments.

Current Issues and Proposed Reforms

The migrant crisis due to COVID-19 poses dual problems for the Indian economy. On one hand, manufacturing establishments in major industrial clusters around the country are facing labour shortages due to the return of migrant workers to their native villages. This state of affairs adds to the economic voes by creating supply bottlenecks in a scenario where aggregate demand conditions have already deteriorated due to the lockdown. 8 Conversely, the native states are not adequately prepared to support the returning migrants given the stressed rural economy and the underwhelming stimulus package announced by the Central government. 9

In consequence, many of the source states of migrant workers, including Uttar Pradesh and Madhya Pradesh, have approved labour law relaxations in order to augment their prospects in attracting fresh investment and with the objective of fiscally supporting the returning workforce.10,11 Meanwhile, many industrial states like Haryana, Rajasthan or Maharashtra have also increased their maximum weekly work hours in factories to limit supply chain disruptions. 12 This is even as corporations have no other option left but to invest on the central government’s labour code reform agenda to provide strong incentives for migrant workers to return to work once the crisis is over.

Labour Law Relaxations Across States

Labour is a subject that falls under the concurrent list of the Indian constitution. This implies that state governments carry the right to amend central legislation, subject to the assent from the President of India. In view of the same and due to the fiscal uncertainty brought about by COVID-19, the states of Uttar Pradesh, Madhya Pradesh and Gujarat have recently sanctioned sweeping moderations to their labour governance frameworks.

The Uttar Pradesh government has approved an ordinance which would exempt all new factories and manufacturing establishments from all labour laws for a period of three years, subject to the fulfillment of a few very basic conditions pertaining to bonded labour and death or disability compensation. 13 Surprisingly, even a leading industrial state like Gujarat has decided to adopt a similarly unsystematic and short-term approach on the issue. 14 In fact, the Madhya Pradesh government has a far more measured outlook with respect to labour law relaxation in the state. While even the latter has relaxed thresholds and requirements on employers with respect to employment conditions and workers welfare, and also amended the Industrial Disputes Act, 1947, it has chosen to retain crucial provisions pertaining to lay-off and retrenchment of workers, as well as closure of establishments. 15

In a scenario where 90 percent of the India’s workforce is employed informally, these changes are deeply problematic in that employers will be freed from even basic obligations with respect to job security, health and social protection of their workers. This will encourage worker exploitation, given that employees will not have access to any grievance redressal mechanisms and also drive down wages sharply, in view of the suspension of the Minimum Wages Act, 1948. 16 It will disincentivise formal employment and is unlikely to spur economic growth, taking into account the excess capacity in the industrial sector and the expected drop in consumer demand due to the imminent suppression of wages.

The state governments could have chosen to extend work hours on the lines of Rajasthan and Maharashtra or partner with the industry in shouldering some of the burden in respect of wage payments or worker welfare. They could have even expedited the central government’s planned agenda on labour law rationalisation, which incorporates meaningful relaxations to India’s labour laws, but in a methodical and well thought-out manner. Instead, they have chosen to adopt what amounts to a huge step backwards with respect to formalisation of the Indian workforce.

The Inter State Migrant Workmen (ISMW) Act, 1979 and the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2019

Currently, there are over 40 central laws and 100 state laws governing various aspects of labour in India. With the objective of reducing compliance costs for industrial establishments and ensuring uniformity for ease of enforcement, the Central government is in the process of streamlining labour laws under four codes. They are (i) industrial relations, (ii) occupational safety, health and working conditions (OSHWC), (iii) wages, and (iv) social security. The code on wages has already been passed by Parliament. The standing committee on labour has also submitted its report on the OSHWC code, which seeks to replace 13 labour laws, including the one governing inter-state migrants i.e. the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. 17

The ISMW Act, 1979, was enacted with the purported objective of preventing exploitation of inter-state migrants by labour contractors and to ensure fair and decent conditions of work in establishments where they have been employed. The law carries strict requirements on contractors to get licenced and report to relevant authorities, in both the source and host state of workers, the details pertaining to wages paid, work hours and essential amenities provided to the migrants. 18 The establishments hiring them are also required to obtain a certificate of registration. There are also strict obligations with regards to paying the migrant workers at par with regular workers, providing suitable residential accommodation and even displacement allowance in case of dislocation from host state. 19

The COVID-19 pandemic and the ensuing migrant crisis has conclusively proven that the ISMW Act is not being implemented in the country. Had contractors been reporting the required details, state governments would have possessed sufficient information regarding the size and distribution of inter-state migrants in their territories and could have potentially taken corrective measures during the lockdown. Had residential accommodation or medical facilities been provided or dislocation allowance paid to migrant workers, some wouldn’t have had to undertake the arduous journeys back to their villages on foot. Further, the contractors and the employers who left the migrant workers to fend for themselves would have faced heavy monetary penalties or even criminal action suits.

However, it needs to be acknowledged that the onerous conditions prescribed in the ISMW Act can be a major disincentive for both contractors and industrial employers to comply with the same. It deters the formalisation of the migrant workforce by making the process of hiring them even more burdensome than regular workers. The OSHWC Code was conceived precisely with the stated objective of reducing the compliance burden on corporations and incentivising formalisation of the workforce by prescribing uniform standards for contract and migrant workers employed in sectors like, inter alia, building and other construction, motor transport and plantations. It does so by necessitating only a single licence for contractors, irrespective of the sector and amalgamating or combining certain special provisions pertaining to inter-state migrant workers and contract labour. 20

The OSHWC Code provides that where inter-state migrant labour is employed by an industrial establishment through an unlicenced contractor, the former would be deemed the principal employer. While this provision does address the gaps left between the existing legislation on contract and inter-state migrant labour, the Code has left out certain provisions from the ISMW act which may be detrimental to the formalisation of the migrant workforce. These include provisions pertaining to furnishing details of migrant workers to the two concerned states and providing the workers a passbook with those details in their language of preference. 21  Further, while it retains the provision of displacement allowance, it removes all statutory obligations with regards to maintaining certain health and safety conditions of employees and delegates the concerned rule-making powers to the state governments

The COVID-19 crisis has revealed that migrant workers enjoy no security on employment or wages and are subject to inhumane treatment by their contractor and employers. Their needs are distinct and demand a separate chapter in the Code. The standing committee on labour in Parliament argues the same. 22 This chapter must include the obligation on contractors or principal employers to maintain a digital register on the particulars of inter-state migrants commissioned under them, which would enable better decision-making by state governments. It must also include a clause which provides these workers with the equivalent of an identity card that would make them eligible for welfare schemes run by various governments. Finally, the chapter should provide for certain minimum health and safety standards which employers must maintain in order to ensure welfare for the migrants.

Best Practices on Formalisation of Migrant Labour in India

With the above discussion, we can infer that central legislation on labour is expected to remain inadequate with respect to formalisation and welfare of the migrant workforce in the country. This is while the indicated agenda continues to be kept on the margins of politico-economic priorities of most state governments in India. In this context, it is important to identify those sectors which serve as the largest source of employment for migrant labour and uncover best practices and case studies from across the country where a measurable level of formalisation has been achieved with respect to the same. This would provide much-needed guidance to governments in India on a collection of policies, “institutional innovations and grass-roots intervention which complement each other and jointly contribute to progressive formalisation” of the migrant workforce in the country. 23

Building and Other Construction Workers

The construction sector attracts a large number of migrant workers due to the labor-intensive nature of the industry and low skill requirement. An estimated 50 million workers are employed in the construction industry. 24 The level of informality is high in that workers are made to work at a daily wage rate and often without formal contracts. Besides, due to the ineffectual implementation of the legislation pertaining to working conditions, the workers are usually made to reside on the construction site itself with inadequate safety measures and no provision of essential amenities. The high prevalence of children and women in construction makes it even more important to address the informality of labour in the industry.

The Building and Other Construction Workers Cess Act, 1996, is one of the principal legislations governing the construction sector. It mandates the registration of workers with state-level construction worker boards as well as the usage of funds – collected as a 1 percent tax on the cost of construction – towards their welfare. The estimates from the labour ministry of the central government show that the registration of workers and use of the funds is improving but remains dismally low.  25

However, the success story in this regard can be found in Gujarat where the Self Employed Women’s Association (SEWA) has established itself as a “legitimate representative voice of informal construction workers” in the state. 26 Not only was it instrumental in setting up the workers welfare board in the state but it also got the Gujarat government to accept certificates, which would guarantee welfare access to the construction workers, issued by SEWA as proof of work. Further, it has supported the establishment of construction cooperatives which undertake independent construction contracts, thereby enabling members to access the market and upgrade to skilled workers from mere labourers.

The above example demonstrates that coordinated efforts by civil society and a responsive state government can bring informal workers into the mainstream. In this respect, every state government must endeavor to have a functioning construction workers welfare board and ensure all informal workers, including migrants, are registered with the same. It is important that funds collected under the law are fully utilised in order to ensure welfare of informal workers, especially during times of crisis. Finally, it is imperative that minimum health and safety conditions for construction projects are updated in the context of COVID-19 to ensure physical distancing and monitored strongly to guarantee compliance. Governments can play a crucial role in this regard, by mandating a compliance requirement for all their infrastructure projects being auctioned to private players.

Informal Transport Workers

Informal transport like auto rickshaws or e-rickshaws are critical instruments for last mile connectivity in urban India. Although this market is characterised by a high degree of informality, it often marks the first point of entry for migrant workers into the labour market. 27 The sector is marked with long working hours, irregular payment and intense competition due to the prevalence of a large number of players. The sector is highly diversified with working conditions are arguably the poorest for those at the bottom of the pyramid, i.e. head loaders, rickshaw pullers or porters on railway stations. They are seldom supported by municipal bodies and, in fact, end up skirting safety regulations prescribed for official transport vehicles.

In this regard, two social enterprises, Ecocabs in Punjab and G-Auto Nirmal Foundation in Gujarat, have been quite successful in addressing the informality of transport workers. 28 In both cases, they were given strong incentives to join an external platform and, on joining, were trained on safety regulations as well as service delivery in order to ensure a standard code of conduct. Both these initiatives have not only helped the transport workers transition towards proper legal recognition but has also facilitated a much-improved quality of life with increased income, access to health services and insurance programmes along with a substantial network of peers.

In both cases, government support was extremely crucial in that the requisite infrastructure was incorporated within the urban design plans of municipal councils. The respective governments also facilitated network support through state telecom companies and financial assistance by offering advertisement contracts on the vehicles concerned. 29 The improved service delivery and customer satisfaction has led to a rapid expansion of the initiatives in their respective states.

This example demonstrates that governments, while being an enabler for private sector ingenuity, can produce mutually beneficial outcomes. In the context of COVID-19, well laid out ‘Code of Conduct’ guidelines are going to be crucial in order to ensure social distancing just as much the framework to track the number and distribution of transport workers in any urban conglomeration. The lessons derived from the above examples can be extremely valuable in this respect.

Street Vendors, Restaurant Workers and Domestic Helpers

Occupations such as street vendors, helpers in restaurants or domestic helpers in urban households are prolific job creators for migrant workers and often an easy point of entry into the labour market. As stated earlier, the number of street vendors in India are estimated to be 10 million, while domestic helpers stand at 50 million. In both cases, the actual numbers may be much higher given the lack of recognition accorded to them under India’s legal and administrative system. All these occupations share a high degree of informality with no written job contracts, long working hours and poor implementation of regulations where they exist.

In this context, Aajeevika Bureau, with its presence in both the ‘source’ and ‘destination states’, has achieved a degree of success in helping migrant workers acquire registration cards, legal protection and even written job contracts. An estimated 60,000 migrant workers have increased their income by 50-80 percent due to the efforts put in by Aajeevika.30

Similarly, a few state governments have accomplished formalisation of domestic helpers through a variety of interventions. For instance, Kerala managed to register 35,000 domestic workers in 2012 due to its decision to delegate that responsibility to the direct stakeholders like trade unions, resident welfare associations and even employers of domestic workers. 31 Jharkhand issued nearly 3,000 smart cards to domestic workers in 2012 due to its decision to include them in the Minimum Wages Act, 1948. 32 Finally, Maharashtra introduced a comprehensive piece of legislation exclusively for domestic workers with a mandated requirement of a welfare board. 33

Due to the highly tactile nature of their work, COVID-19 represents an existential threat to this category of workers. It is essential that some of the best practices mentioned above are calibrated upon by various governments before the migrant workers start pouring back to the cities.

Conclusion

The aftermath of the COVID-19 pandemic has demonstrated that migrant workers are arguably the most vulnerable section in the Indian electorate. They are away from their homes and are made to work in unsafe and unhealthy conditions with low or irregular payment. The contractors through whom they are hired and the establishments that employ them face no repercussion on deserting them in times of crisis, without any cash for essentials or travel. Further, poor implementation of laws leaves them without legal protection and precludes them from availing any government compensation or welfare schemes.

In this context, it is important that formalisation of migrant labour is adopted as a priority policy objective by governments at various levels across the country. Given the same, the relaxation of labour laws announced by state governments is an eminently erroneous decision, bearing in mind the subject of the legislation, i.e. migrant workers, are going through their worst crisis. Further, it is imperative that the Central government recognises the plight of the migrants and introduces an exclusive section for them in the new labour code. Finally, considering that state governments are going to be primarily responsible for administering the migrant workforce, it would be useful that relevant case studies with respect to labour formalisation from within the country are identified and adopted into state policies.

REFERENCES


[1] “In Long Walk Back Home, Migrants Battle Hunger, Scourge of Covid-19,” Hindustan Times, May 16, 2020, https://www.hindustantimes.com/india-news/in-long-walk-back-home-migrants-battle-hunger-scourge-of-disease/story-TizRfUz69osJQ0Uqmm6jZN.html.

[2] Sarah Farooqui, “89% Stranded Migrants Hadn’t Been Paid Wages during Lockdown Period: Report,” Business Standard India, April 17, 2020, https://www.business-standard.com/article/economy-policy/89-stranded-migrants-hadn-t-been-paid-wages-during-lockdown-period-report-120041700786_1.html.

[3] “Census of India Website : Office of the Registrar General & Census Commissioner, India,” accessed May 23, 2020, https://censusindia.gov.in/2011census/migration.html.

[4] “UNION BUDGET & ECONOMIC SURVEY,” accessed May 18, 2020, https://www.indiabudget.gov.in/budget2017-2018/e_survey.asp.

[5] Annual Report, Periodic Labour Force Survey, July 2017 – June 2018

[6] National Policy for Urban Street Vendors

[7] “Domestic Workers – NDWM,” accessed May 23, 2020, http://ndwm.org/domestic-workers/.

[8] “Govt Nod for 12-Hour Shifts in Factories Facing Labour Shortage | India News,The Indian Express,” accessed May 24, 2020, https://indianexpress.com/article/india/govt-nod-for-12-hour-shifts-in-factories-facing-labour-shortage-6397633/.

[9] “Overpopulated, Too Reliant On Agriculture, Rural India Can’t Absorb Reverse Migrants,” accessed May 24, 2020, https://www.indiaspend.com/overpopulated-too-reliant-on-agriculture-rural-india-cant-absorb-reverse-migrants/.

[10] “Relaxation of Labour Laws across States,” accessed May 20, 2020, https://www.prsindia.org/theprsblog/relaxation-labour-laws-across-states.

[11] Gautam Chikermane and Rishi Agrawal, “COVID19: Shivraj Singh Chouhan Initiates Reforms 2.0 in Madhya Pradesh,” ORF, accessed June 9, 2020, https://www.orfonline.org/expert-speak/covid19-shivraj-singh-chouhan-initiates-reforms-2-madhya-pradesh-65867/.

[12] “Relaxation of Labour Laws across States,” accessed May 20, 2020, https://www.prsindia.org/theprsblog/relaxation-labour-laws-across-states.

[13] Ibid

[14] Prashant K. Nanda, “Gujarat Offers 1,200-Day Labour Law Exemptions for New Industrial Investments,” Livemint, May 8, 2020, https://www.livemint.com/news/india/gujarat-offers-1-200-day-labour-law-exemptions-for-new-industrial-investments-11588959474848.html.

[15] “Relaxation of Labour Laws across States,” accessed May 20, 2020, https://www.prsindia.org/theprsblog/relaxation-labour-laws-across-states.

[16] “Explained: What Labour Law Changes by States Mean,” The Indian Express (blog), May 16, 2020, https://indianexpress.com/article/explained/what-labour-law-changes-mean-coronavirus-6403611/.

[17] “The Occupational Safety, Health and Working Conditions Code, 2019,” PRSIndia, July 23, 2019, https://www.prsindia.org/billtrack/occupational-safety-health-and-working-conditions-code-2019.

[18] “INTER-STATE MIGRANT WORKMEN | Chief Labour Commissioner,” accessed May 22, 2020, https://clc.gov.in/clc/acts-rules/inter-state-migrant-workmen.

[19] Ibid

[20] Brief Note on The OSH Code 2019 – 5 March 2020 – Swaniti Initiative

[21] Ibid

[22] “Chapter At A Glance,” PRSIndia, accessed May 25, 2020, https://www.prsindia.org/node/844922/chapters-at-a-glance.

[23] Sandra; Kring Rothboeck, “Promoting Transition towards Formalization: Selected Good Practices in Four Sectors,” Report, December 15, 2014, http://www.ilo.org/newdelhi/whatwedo/publications/WCMS_344607/lang–en/index.htm.

[24] “Report of the Working Group on Migration | Smartnet,” accessed May 23, 2020, https://smartnet.niua.org/content/b4f11a35-aa13-4f28-bd71-733ca66fd055.

[25] Ibid

[26] Sandra; Kring Rothboeck, “Promoting Transition towards Formalization: Selected Good Practices in Four Sectors,” Report, December 15, 2014, http://www.ilo.org/newdelhi/whatwedo/publications/WCMS_344607/lang–en/index.htm.

[27] Ibid

[28] Ibid

[29] Ibid

[30] Ibid

[31] Ibid

[32] Ibid

[33] Ibid

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