Analyzing the Position of Indian Trade Unions in the Era of Globalization
The answer to the subject matter of your question is worthy of a thesis, I think. Anyway, let me try to present the maiden answer to your thread based on my observations as a common man of the economic events unfolding ever since 1991, which laid the foundation for the New Economic Policy of the Government of India and opened the floodgates of globalization. Apart from that, my work experience as a conciliation officer in an industrially concentrated area for some time when the effects started to appear gave me, inter alia, a good interaction with both Trade Unions and Managements involved in the struggle for adjustments.
Basically, globalization is the expansion of trade and commerce across the world, transcending international borders. Essentially, therefore, it is market-driven. The existence of global trade can be traced back to the civilizations of Egypt, Mesopotamia, Indus Valley, Phoenicia, and China from 4000 B.C. to 1000 B.C. The formation of nation-states in Western Europe in the 15th and 16th centuries and the successful efforts of colonization by Spain, Portugal, Great Britain, and France in the succeeding periods marked by rapid expansion of global trade by means of reciprocal import and export of raw materials and finished goods between the conquerors and the colonies necessitated the expansion of capital on a hitherto unknown scale and the conferment of chartered rights for exclusive trade in exchange for certain obligations to the State. All these culminated in the advent of the joint-stock system of ownership of business enterprises and the emergence of modern corporations. The following Industrial Revolution in the 18th century, which gave rise to mass production, also necessitated aggressive and innovative worldwide marketing techniques. The notable early multinational companies are Unilever of Holland and England, Anglo Swiss Condensed Milk Company of Switzerland, Philips Lamps of the Netherlands, and Standard Oil of the USA. In the aftermath of the new industrial policy of the Government of India, the scale of preference gradually tilted towards privatization, foreign direct investment, deregulation of exports and imports in tune with the terms of international trade agreements, etc., resulting in private-public joint ventures, foreign-domestic collaborative ventures, big Indian business houses like the Tatas, Birlas, and TVS becoming transnational, multinational corporations like Ford, Hyundai, GM, Nokia, Suzuki, Volvo, etc., establishing their production hubs in India and competing substantially in the domestic market in addition to sizeable exports, large-scale employment opportunities abroad, creation of a level-playing field for the private sector in the nationalized fields of banking, insurance, telecommunications, etc., increased flow of revenue to the State through direct and indirect taxes, and so on. Of course, the dismal side is also there. Slow and steady phasing out of small and medium-scale industries catering to the local and domestic markets, replacement of large-scale manual labor in production and construction activities with increased use of mammoth machines, mechanization, automation, etc., migration of manual labor force from rural areas to urban centers of production leaving agriculture in the lurch, increasing unplanned urbanization, power and water scarcity, painful adjustment of domestic consumption needs and unpredictable inflationary trends according to global market supply and demand, unabated outsourcing resulting in sporadic indirect engagement of labor, and so on. In short, globalization is a mixed blessing to India. The plus points are: ample employment opportunities became available to the relatively younger population with good professional and technical skills, thereby raising the standard of living of the middle classes, the rich became richer thereby branching out their business ventures abroad, availability of the best products of consumer durables in the markets at competitive prices, flexible and easy credit facilities by banks and other financial institutions, easy transfer of technical know-how from abroad, and development of transport and communication facilities. The minus points are: the gradual decimation of conventional manufacturing and rural industries, deprivation of regular employment to semi-skilled and unskilled labor force, perceptible increase in the tendency of conspicuous consumption and adoption of faulty export policy in respect of certain commodities thereby keeping the inflationary trend unabated, drastic cut in budgetary allocations to education, public health, etc., leaving them to the private sector thereby making them highly expensive and beyond the reach of the poor and downtrodden, and many more like these.
Trade union movement in India dates back to 1890 with the formation of the Bombay Millhands Association, which in fact was more a welfare association than a trade union. Therefore, the first unions formed were the Madras Labour Union (1918) and the Textile Labour Association, Ahmedabad (1920). The All India Trade Union Congress (AITUC), the first trade union federation, was formed in 1920. The political differences cropped up ever since its inception among the three groups, viz., the nationalists led by Gandhiji and Jawaharlal Nehru, communists led by Dange and M.N. Roy, and the moderate socialists led by V.V. Giri and N.M. Joshi paved the way for the formation of rival unions based on political ideologies, and the first grand split saw the formation of the Indian National Trade Union Congress (INTUC) from AITUC in 1947, followed by further splits with the formation of Hind Mazdoor Sabha (HMS), United Trade Union Congress (UTUC), and finally the formation of the Center of Indian Trade Unions (CITU) in 1970. The political differences played a vital role in the formation of further federations such as Bharathiya Mazdoor Sabha (BMS) and other regional-level federations by the regional parties. As of now, almost every political party has its labor wing in the form of its own federation. Still, there are some other federations without any political link. One can very well understand the importance of a trade union from the inalienable right to association in Art. 19(1)(g) of the Constitution of India. Trade unions stand as a parallel institution to management in matters of industrial relations such as collective bargaining, participative management, conflict resolution, etc.
Before analyzing the positivity or negativity of the position of Indian Trade Unions in the wake of globalization in particular, we shall see the state of trade unions across the globe in general. Since 1980, a serious decline in union membership has been noticed worldwide in industrialized countries like ours, except Sweden, Denmark, Norway, and Germany, where the trade union density is at the top at 91% in Sweden and the least at 40% in Germany but steadily at the same least rate over the long past. Density is the percentage of union members in relation to total employment. Unfortunately, I don’t have the recent statistics of our country at hand. But, presumably, it will be far less with the decline in the number of conventional manufacturing like textile, foundry, mines, and quarrying, etc., and the growth of the service sector where unionization is not possible because of the scattered labor force. Even in manufacturing, a perceptible change is noticed from mass-production centers to small, small satellite units of production based on the specialty of the components to be made. It is a well-known fact that unionization in small units is very difficult. Thus, the decline in membership has rendered the Indian trade unions vulnerable and ineffective other than in public sector undertakings where, though unionization stands presently at 90%, the role of unions is restricted to that of bargaining agents in wage negotiations only.
Next comes the changing character of the workforce. What Peter F. Drucker thought to be a new workforce and styled as “Knowledge workers” anticipating in his book “Managing in Turbulent Times” in the mid-80s have come to stay in every employment, replacing the unskilled and semi-skilled white-collar workers. These well-educated knowledge workers are highly ‘individualistic’ and do not care for anything other than fat pay-pockets, and therefore it is very difficult to bring them within the fold and hold of trade unions. I have not heard of trade unions in any I.T. and ITES company. Even occasional mass retrenchment at times in such an undertaking due to declining business prospects does not deter them as their employability is very high.
Constant technological advancements affect everyone, as borne out in the following quote:
“Robots in the factory, word processors in the office, scanners at the checkout counter, push-button banking, computers in the home, and satellites in the sky remind the nation of the pervasive impact of advancing technology.”
Thus, technology renders people redundant and effects replacement wherever possible.
The Human Resource Management, distinct from old management styles, lays stress on the importance of teamwork, flat structures of hierarchy, continuous improvement, decentralized decision-making, novel methods of reward structures, human capital formation, etc., and ensures a ‘one-to-one contact’ and a ‘face-to-face approach’ between the management and the people, thus eliminating the third party viz. the trade union.
If one analyzes the industrial relations scenario obtaining in India for the last 50/60 years, one can easily notice that earlier the trade unions have been militant and arm-twisting the employers by resorting to sudden strikes for even petty causes based on the mere strength of numbers. Now, there is a topsy-turvy change that the employers have become militant and the unions have to fight for minimum statutory rights of workmen.
The political environment is also not supportive of the growth of trade unions for what is considered appropriate in an industrially developing pace is ‘High employment’ instead of ‘Full employment’ because a certain level of unemployment is always unavoidable in any country.
Therefore, I would personally conclude that the position of the Indian Trade Unions in the era of globalization is on the whole not so positive, and to remedy this, they should understand not only the implications of change but also non-change and non-adaptation. The role played by the Indian Trade Unions during the pre and post-independence periods cannot be undermined. Their constant efforts made the Government of India ratify a number of conventions of the International Labour Organization and were instrumental in the passing of many post-independence labor laws. Their indomitable spirit of litigation brought about many landmark judgments by the Apex Court of the nation. To address the human problems associated with globalization, they have to revamp their armory with new weapons. They should not refuse to understand that the commitments of an industry are not only limited to that of security of employment and fair wages to workmen and fat dividends to shareholders. Another stakeholder, viz. society, is still at large. It needs better quality of goods and services at cheaper prices, keeping the ecological balance intact and the uninterrupted transfer of social wealth and technological know-how to posterity. Therefore, Indian Trade Unions, along with other social partners, should recognize the need for the transition and transformation of our economy to be fully integrated into the global economy as a major and competitive player where its citizens, including the labor force, can enjoy an enhanced quality of life.
Regards,
M. Umakanthan
Additional Commissioner of Labour (Rtd.)
Salem - 636008.
Tamilnadu.