Clipped from: https://www.thehindubusinessline.com/opinion/editorial/increasing-working-hours-to-attract-investment-is-a-bad-idea/article66781763.ece
Employing the optimum number of workers and skilling them by investing in technology is a better way of raising productivity
After receiving considerable flak, the Tamil Nadu government has ‘put on hold’ an unfortunate amendment to the Factories Act — passed by the Assembly on April 21 — that allows for a 12-hour working day. Political parties across the ideological spectrum as well as trade unions, have opposed the new law, and rightly so too. The idea of having flexible working hours in factories, with workers being ‘free to choose’ between working for eight or 12 hours in a day, would have actually worked to the disadvantage of workers, particularly women. The ‘choice’ could turn into compulsion. Unlike in the case of Karnataka, which passed a similar law in February, the weekly working hours have not been capped in the Tamil Nadu law (it is 48 hours in Karnataka).
There can be no humanitarian or economic case for pushing a worker beyond his or her physical or mental limits, which is the rationale for having an eight-hour day of work or a 48-hour working week. Such changes in laws governing workers’ rights are justified in the belief that it would make India competitive with China, Taiwan and Vietnam — as stated, for example, by the Karnataka government. This is a ‘race to the bottom’ approach to attracting investment. There are better ways to lift productivity and long-term output. Labour productivity is best raised by employing the optimum number of workers and skilling them by investing in technology. India’s workforce is meant to be a demographic advantage; and hence employment and training should be incentivised through schemes such as PLI, which are more oriented towards rewarding investment in physical capital.
Inimical working conditions are more a recipe for industrial unrest than for raising productivity. This is borne out by the violence that erupted at the Wistron facility in Kolar district in December 2020, the protests by Foxconn’s women workers near Chennai in December 2021, and the militant Maruti workers’ strike at Manesar in mid-2012. The triggers were dissimilar in each case, but the root cause was probably the same — pent-up resentment arising from poor conditions of work. The situation has been made worse by the absence of legitimate unions in workplaces these days, especially in the electronics industry, to amicably resolve differences. Repeated changes to the Trade Union Act, 1926, have reduced the space for legitimate representation and protest. From the pre-reform days of disruptive unionism in some States, there has been a pendulum swing to the other extreme, where unions are disallowed. Industry and government need to do a course correction, in the interest of economic output and industrial peace.
Labour reforms, broadly speaking, are a step in the right direction. This includes the Centre’s move to encapsulate 29 earlier labour laws into four codes — for wages, industrial relations, occupational health and safety, and social security — in an effort to ease compliance and doing business. But allowing sweatshop labour merely to attract investment is unjustified. A broader climate of robust institutions is what really counts.