Unionization & Collective Bargaining in the Unorganized Sector

By Sen, Ratna | Indian Journal of Industrial Relations, April 2012 | Go to article overview

Unionization & Collective Bargaining in the Unorganized Sector


Sen, Ratna, Indian Journal of Industrial Relations


Introduction

Globalisation and the breaking down of trade barriers have been almost invariably associated in every country with:

* Higher levels and faster rates of economic growth.

* Critical levels of competition which compel organizations and countries to pare down costs through outsourcing, casualization and innovations.

* Employment growth, primarily in the unorganized or informal sector. The evidence from many countries indicates that formal or organized employment has either stagnated or actually shrunk and non-regular or nonstandard work has grown.

While the first two consequences have helped economies and consumers, the growing army of the informal sector workforce has created a new consciousness about their working conditions and the growing inequalities between worker groups in many countries. For instance, working hours in this sector are about 1214 hours a day (NCEUS 2009: para 6.64). This is part of the new consciousness about inclusive growth and whether unionization among them and negotiated settlements can ameliorate their plight. The International Labour Organisation, which is observing the decade of Decent Work in Asia comments: "another frontier for collective bargaining lies in the complex challenges associated with improving the working conditions of nonregular and/or migrant workers.... A number of examples from India illustrate how the social partners are using collective bargaining to address the needs of these workers" (ILO 2009: 15).

The National Commission on Enterprises in the Unorganised Sector (NCEUS 2009: Table 2.7) estimates that in 2008-09, informal sector in India employed, in agriculture 219 million, in industry 66 million, and in services 101 million, totalling 386 million out of a workforce of 450 million. Between 1993-94 and 2004-05 the net growth of employment had been largely of an informal kind, implying that these workers were vulnerable in significant ways. This is true of both formal and informal sectors and significantly greater in manufacturing. The NCEUS Report (Table 2.4) uses both NSSO and DGET data to indicate that informal employment in the formal sector (private and public) constituted more than 20 million in 1993-94, growing to 25 million by 1999-00. Hence this manpower would add to the 386 million estimated. Before this can be analysed it is necessary to identify the unorganised sector, to quantify it and to spell out the large variety of work and employment relationships within this broad category.

Defining the Unorganised /Informal Sector

According to the NCEUS the Informal Sector "consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers". Unorganized workers are, 'a home based worker, self-employed worker, or a wage worker in the unorganized sector.... or those working in the unorganized sector or households, excluding regular workers with social security benefits provided by the employers, and the workers in the formal sector without any employment and social security benefits provided by the employers'(NCEUS 2009: Sec 2.m). The informal economy consists of the informal sector and its workers plus the informal workers in the formal sector. This definition enlarges the scope of the unorganized sector considerably and hence proves more comprehensive than the NSSO definition of the 'Unorganised' as all those not being in public sector or government units, and not covered by the Annual Survey of Industries. However, by restricting the coverage to enterprises employing less than 10, the NCEUS excludes many industries which are in the unorganized sector, such as brick kilns not using power in the manufacturing process. The number of persons employed in these, even if it be for only a portion of the year, will be well above 9 (South Asia Citizens' Web). …

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