Evolution of Labour Legislation in Asia

title l contents l contributors l foreword l introduction l

chapter 1 l 2 l 3 l 4 l 5 l 6 l 7 l 8 l 9 l conclusion l

 

INTRODUCTION

J.P. CUNANAN & B. WEERAKOON

 

 

General Trends in the Evolution of Labour Law in South and South-East Asia

   The pre-war history of labour legislation in Asia generally is characterised by a protective interest in respect of workers. Stringent statutes there were, but these were more the exception than the rule. Legislation that was meant to supervise trade unions were also in a larger sense promotive of the organisational needs of workers, and in no mean measure enlarged the legal scope of the right of association and of collective bargaining. Minimal wages and standards were a blessing to workers who were unorganised, and even to those who though organised were unable or unwilling to exert sufficient pressure at a bargaining table. Maternity benefits as well as legislation which protected women and

    children from being pushed into certain kinds of employment, and which made imperative the observance of certain norms in their employment, benefitted yet another sector that remained unorganised.

    These were years in which in the major portion of this region there was direct colonial rule. The working class in these colonies were constituted of people who were thinly spread over the ventures of commercial agriculture and extractive industry in which there was metropolitan investment. In most of these colonies a working class had to be created from the marginal sections of a peasant mass within which proletarianisation had as yet to take place. This thin layer of the working class had a potency for mobilisation in the movements in the colonies for increasing degrees of political freedom. Therefore the attention of the native bourgeoisie in regard to the various segments of this working class was not found wanting. At the same time political liberalism, evangelical stirrings, and plain humanitarian feelings that were current in the metropolitan or mother countries had their own impact.

 During this period it was only the Indian bourgeoisie that was impelled through a class need to pit itself against the more industrial sections of the working class in that country. Its spiritual heritage and Gandhian ideals did not withhold the Indian National Congress from sponsoring the Bombay Industrial Disputes Act (1938) with its provision for the prohibition of strikes.

The legislation was a characteristically capitalist response to possible in­dustrial unrest. It was not argued at that time, as it is being done now, that for Asia there was a different model of capitalism in which the governing class and the proletariat were required to behave in a manner different from how they did in the more advanced capitalist countries. In fact it can be said that despite the rhetoric in the Five Year Plans and in Ministerial handouts, Indian labour policy has shown a remarkable degree of consistency coming down from the British times. The Trade Union Amendment Act of 1947 gave to trade unions the right to organise and to be recognised. It however left sufficient room for evasion of recognition through a clever utilisation of administrative and judicial procedures. The Industrial Employment (Standing Orders) Act of 1946, and the Industrial Disputes Act of 1947 provided for State intervention in labour relations through compulsory adjudication. These however were not seen as new policies but as more modern methods for handling old problems. De­velopmental rhetoric however was not lacking. The First Five Year Plan defined the wished-for pattern thus: “Industrial relations should be so developed that the worker’s fitness to understand and carry out his responsibility grows and he is equipped to take an increasing share in the working of industry. There should be the closest collaboration through consultative committees at all levels between employers and employees for the purpose of increasing production, improving quality, reducing costs and eliminating waste. The worker’s right of association, organisation and collective bargaining is to be accepted without reservation as the fundamental basis of mutual relationship. The attitude to trade unions should not be just a matter of collaboration. They should be welcomed and helped as part and parcel of the industrial system.” This was the reformist ethos of the time present both in Europe and Asia. It was a fresh approach to labour and its problems; and might even be interpreted as a plea for a more meaningful collaboration with labour. Disputes there were bound to be but for this too the needed machinery was provided. In justification of State intervention in labour relations the Plan referred to the need for industrial peace for the realisation of its avowed objects, planned production and distribution in the interests of social justice, and said:

India is moving in this direction. It is also at present passing through a period of economic and political emergency. Taking the period of the next few years the regulation of industrial relations in the country has to be based on these two con­siderations and it is incumbant on the State to arm itself with legal power to refer disputes for settlement by arbitration and adjudication, on failure of efforts to reach agreement by other means.

 Though economic and political imperatives were thus taken into consideration there was seen no need to dismantle the existing system of industrial rela­tions machinery. The new measures only supplemented the existing legal pro­visions in the field of labour and labour relations.

 In the period between 1947 and 1951, in which year the First Five Year Plan commenced, the basic machinery referred to in the Indian plan had ensured a relative decline in the number of disputes, the percentage of workers involved and man days lost, whilst industrial profits had increased within a range of 191.6 per cent in 1947 to 310.5 per cent in 1951 (with base 1931 = 100). These trends continued in the period of the subsequent Plans too. Direct foreign investment rose from Rs 2,176 million in 1948 to Rs 9,126 million in.1972. Despite this investment political and economic power remained in the hands of the national bourgeoisie. Reception of foreign capital and the quantum of such capital that was permitted to enter depended solely on the needs of the indigenous in­dustrialist class.

It was in South East Asia that a different set of relations had emerged. In the Philippines, which is one of the countries in the region that re-emerged to independence after the war, American direct investment tripled in the period 1945 to 1965, and in the last ten years of that period these investments remitted $386.2 million in profits back to the United States, exclusive of reinvestment or of resident savings. At the end of 1965 the Philippine external debt, mainly to American banks totalled $487 million, Thailand $99 million, and Malaysia $100 million. The main investors were the United States and Japan.

Something of what was happening in this region began to surface in I.L.O. literature too. As a common feature it listed a receptiveness in these countries to the inflow of foreign capital together with a readiness to change the existing labour laws in order to facilitate this inflow. What it failed to note however is that this is indicative of a deep-going change that has affected political in­stitutions as well. What is decisive with the TNC investor is political stability. Hence the movement away from democratic forms of government.

There is another and secondary trend in the labour legislation in these countries. This is the legislation that aims at creating the necessary set of con­ditions for the exploitation of cheap labour by the industries of developed countries. These are the Free Trade Zone or Export Processing Zone patterns of labour. Unless this is clearly understood as a secondary trend it is likely that the primary and dominant trend will be overlooked. Singapore is so far the best example of this secondary trend. But Singapore’s situation is not typical for Asia. It is a little island with an area of about 209.6 sq. miles, and a population of about two and a half million, of which 75% are Chinese, and the rest Malays, Indian and others. It is physically and ethnically cut off from Malaysia to which it is very close and is insulated from political currents endemic to largely popu­lated Asian countries. It inherited certain labour laws from its colonial period as a sensitive naval base of the British. The supervision of trade unions was introduced by the colonial government through the Trade Union Ordinance No. 3 of 1940. The Industrial Court Ordinance No. 4 of 1940 and the Trade Union Disputes Ordinance No. 49 helped the governors to restrict the use of the strike weapon. The post-colonial government used this body of legislation to break the back of a militant trade union movement and to ensconce in its place welfare business associations in the name of trade unions. The Employ­ment Act of 1968 has virtually banned all strikes, and the Wages Council has been made the device for regulating wages in keeping with Singapore’s reputa­tion for comparatively cheap labour.

Repression of trade unions and the denial or withdrawal of working class rights are not limited to the South-Eastern half of the region. In the 1970s India was governed in terms of an external state of emergency declared in 1971. The ferocity with which the Railwaymen’s strike (1974) was crushed through the use of emergency powers shows that the working class had to bear the brunt of a repression that had become part of its political system. Nearly 20,000 strikers were arrested, and 16,500 railwaymen were initially dismissed. It was under cover of Emergency Regulations that wage restraints were imposed, and the denial of existing rights, such as bonus payments, were effected. Despite the defeat of the Congress government the situation as regards labour did not change in any meaningful manner. Striking workers at the Bailadilla iron ore mines were lath charged and shot at by the police. Tamil Nadu’s state employees had in March of the same year to face official repression. Employers as in Haryana felt free to employ thugs, under the guise of security guards, to crush trade unions. Whilst the State-governments put their entire machinery at the disposal of employers, the Central Government proposed legislation that it said was to alter for the better the conditions of struggle. “While the law will recognise the right to strike and of lock-out”, said the Ministerial note issued on the subject, “the provision of effective machinery would make the exercise of such right redund­ant and unnecessary”. In accordance with that legislation, in the services sector (health, education, etc.) and in industries declared essential services, either party or the appropriate State government has the right to refer the dispute to arbitra­tion or adjudication, and any strike in an establishment in that sector will be illegal. Strikes in the non-essential industries and establishments were also not legal unless they are preceded by a period of 60 days each for negotiation, and conciliation. They also had to have a 60 per cent pro-strike ballot and a 14 day strike notice in order to be legal. These were provisions which were intended to make all direct actions by the working class impossible within the law. Govern­mental changes do not seem to effect labour policy, and the present Congress Government is not backward in proving this. The National Security Ordinance (NSO) for detention without trial and Essential Services Maintenance Ordinance for banning strikes in selected industries and services were promulgated and have later been put on the statute book as regular Acts. There is also proposed legis­lation for more rapid control over strikes and trade unions.

We thus see in the situation of the region three distinct sources of labour legislation in the present day. One is the direct product of neo-imperialism as in the Philippines. The other is a patterning deliberately designed to accommodate neo-imperialism a “swim with it rather than drown” kind of policy as is seen in the case of Singapore.

   The third, exemplified by India, is also related to neo-imperialism though in a manner different from the other two. It is development under the shadow of neo-imperialism. The nature of present day labour law and policy in this region can therefore be best understood from an examination of the nature of capital­ism in this region. It is where this examination is avoided that the tendency is to veil the on-going process with an Asian mystique. The studies in this volume seek therefore to examine the evolution of labour laws in these countries within the relevant socio-political contexts.

 

 

title l contents l contributors l foreword l introduction l

chapter 1 l 2 l 3 l 4 l 5 l 6 l 7 l 8 l 9 l conclusion l