Reality check: IRBI report makes the case against relaxing labour laws

A collaborative effort by Oxfam India, Corporate Responsibility Watch, Praxis and Partners in Change has compiled the second edition of India Responsible Business Index. The first IRBI edition was produced in 2015.

The index shows that several companies have improved on various indices from 2015. The list ranks the top 100 companies listed on the BSE on five parameters:

• Whether the company endorses non-discriminatory employment practices and promotes diversity at the workplace.

• Whether the business recognises its responsibility towards creating an enabling environment for workers and prohibits any form of forced labour or child labour.

• Whether the business recognises its role in fostering community development by addressing local priorities and respecting local concerns and knowledge.

• Whether the business recognises its role in creating an environment in which the rights of workers throughout the supply chain (subsidiary or collaborative partners) are respected.

• Whether the business recognises vulnerable communities as stakeholders and is responsible and transparent about the impact of its processes on these communities

The index was prepared using publicly available information about the 100 firms, each of whose policies were measured against the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.

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While the data shows overall improvement on the above-mentioned criteria, less than half of the companies promise an environment where the rights of workers throughout the supply chain are respected.

There are some good findings in there, though. Only nine companies surveyed in 2015 had held public hearings with the local communities regarding the impact of their projects, but that number went up to 13 in 2016. Similarly, the number of companies with a provision for impact assessment in 2015 was 27, and that went up to 31 in 2016.

Over the past year, the central government has focused on ensuring labour market flexibility to increase investment and job creation. There have been legislative changes as well, most significantly the introduction of the Draft Labour Code on Industrial Relations Bill. The government has brought in provisions that allow for easier retrenchment, lay-off and closure norms, and tougher rules for forming unions. There have also been amendments to the Industrial Code and the Small Factories Bill with the intention of creating an encouraging ecosystem for small businesses.

Most of the amendments are anti-labour. With the data showing that a only small number of firms take responsibility for the welfare of those employed in the business supply chain, it is imperative to review the proposed changes.

The new amendments seek to exempt small businesses employing fewer than 40 workers from filing compliance on 14 different labour laws, including the Employees Provident Funds and Miscellaneous Provisions Act and Employees State Insurance Act.

There was also the controversial amendment made to the Child Labour (Prohibition and Regulation) Amendment Act, 2016, which while prohibiting the employment of children under 14 in all occupations has one caveat: a child can now be employed in businesses run by his or her family after school hours and during vacations.

The IRBI data shows only a marginal increase in the number of companies that provide for people displaced by their projects, take consent before land acquisition and employ local people. This hard data questions the wisdom of relaxing labour norms and allowing companies to dictate policies.

Also Read: Why Rajasthan's labour laws are a peek into India's bleak future