Trade Unions & Effectiveness of Collective Action: Lessons from Minimum Wage Revision in Delhi.

AuthorVarkkey, Biju


Understanding and analyzing collective actions by trade unions (TUs) have been a recurring theme in industrial relations (IR) research (Gahun & Pekarak, 2013). Collective action broadly refers to the "natural tendency of people with shared interests to act together in pursuit of those interests" (Oslon, 1971). Since late 2000s, most research on TU behavior has defined collective action as an ad hoc defensive behavior that TUs organize to protect themselves from hostile government behavior and policies (Kohler, 2021; Reshef & Rastin, 2000; Reshef, 2004). Historically, TUs have pursued collective actions for higher wages and improved working conditions (Booth, 1978) and in the process retained influence in the workplace and resonated with workers (Frege & Kelly, 2004).

This study builds on relevant literature, starting from Reshef's (2004) pioneering research on collective union action, to more re cent studies by Balasubramanian and Sarkar (2015), Willman, Bryson and Forth (2016), and Finayson and Palmvang (2016) on union revitalization and decline. Our research focuses on adding a new dimension to this debate which has limited documentation in the extant literature, i.e., barriers that inhibit TUs from engaging in collective action, failing TUs to contribute to public policymaking and implementation.

Drawing insights from the analytical framework proposed by McAdam's (1982) Political Process Model (PPM) and using a qualitative approach, the study identifies three significant internal barriers, namely a) Inadequacy of enforcement institutions (government inaction), b) TU ineffectiveness (organization weakness) and c) lack of cognitive liberation of TU members, along with externally induced limitations like unremittingly anti-worker labor reforms by governments. Using data from in-depth interviews conducted with office bearers of 9 Indian central trade union organizations (CTUO) (1), the study highlights an inherent paradox between the member's expectation from TUs to play a vital role and promote its members' interests by engaging in collective action and reality where TUs remain just another interest group trying to preserve the special status and benefit they enjoy.

The study makes an important contribution to the existing literature on the trade union process and collective action by presenting the case involving a ruling political party, which heads the state government, and the TU leadership working at cross-purposes to achieve a public policy goal, leading to the sub-optimum outcome for TUs. As a result, the ability of TUs to mobilize members for collective action in future is limited. The state government, backed by its political will to enforce pro-worker reforms, unilaterally decides on fixing the MW rates without consulting the TUs, who were also fighting for the same cause. The activism overshadowed the efforts of TUs, with the government machinery and political party taking credit for the change, leaving no other option for TUs than to offer support to the state government. Our findings suggest that such behavior from the government/ruling party side certainly undermines TU's capacities, and limits their growth as an independent institution and erodes workers' faith in TUs.

Background & Context

Ensuring decent work conditions through effective compliance with the minimum wage (MW) system is a widely accepted public policy mandate. Many countries (i.e., about 159) have already ratified the International Labor Organization (ILO) MW Conventions (ILO, 2016, Nos. 26 & 131). The primary responsibility of the 'State' is to ensure compliance and enforcement of the MW policy, which includes determining the right levels and rate of wage rates in consultation with social partners (Benassi, 2011; ILO, 2014; Varkkey, 2015).

Apart from articulating labor's collective voice for the right MW, TUs role also includes empowerment of individual workers through legal advice and representation (Ewing, 2005) and reaching out to workers who are not necessarily aware of their rights and entitlements or are not willing to assert their rights due to the fear of employer retaliation (Arup & Sutherland, 2009). TUs not only influence the process of wage determination through collective action but also contribute to determining how to enforce the agreements (Ewing, 2005; Weil, 2003).

India follows a dual MW system, with a central MW encompassing the labor force in central government enterprises and state-level MW declared by individual states. This duality, in turn, has created a complex system, and it often becomes difficult to administer and enforce compliance (Varkkey, 2015). Lately, central TUs joined together to persuade the Indian government to increase MWs for all workers nationally (Sharma, 2019).

In August 2015, India's ten Central TUs (CTUOs) submitted a 12-point charter to the Government of India (GOI), in which one of the principal demands was to increase MW for unskilled workers (Gupta, 2016). After many rounds of inconclusive discussions spread over a year and the government's inaction on the list of demands, a nationwide joint strike call was given by CTUOs (Sharma, 2016). This unity was a rare event in Indian TU history.

In consonance with the demands of TUs, the Aam Aadmi Party (AAP) (2) led Delhi government in August 2016 announced a 50 per cent hike in MWs for all workers in Delhi based on the 13-member MW fixation committee's recommendations, and the party urged the GOI to do the same across the country (Goswami, 2017). However, the Lieutenant Governor (LG) (3) of Delhi declared the AAP government's decision as null and void, terming the constitution of MW fixation committee's as 'illegal' since the AAP government did not seek prior approval from the LG (First Post, 2017). Subsequently, in June 2017, the Delhi government reprocessed the proposal and issued fresh notification that awarded a 37 per cent hike in MWs based on the recommendations of a newly constituted 15member MW fixation committee (4) that had representatives from TUs and approved by LG (PTI, 2017). However, 44 employers' associations jointly opposed the government notification and demanded rollback by filing a petition in the High Court of Delhi. The High Court subsequently quashed the government notification wide judgement dated 4th August 2018, terming it a 'hurried' decision taken without hearing the employers who would be affected by the MW revision (Banka, 2018). The AAP led government, in October 2018, moved to the Supreme Court of India, challenging the High Court decision. In October 2019, the Government won a favorable ruling against the employers' associations from the SC of India, and the revision of MW became effective in Delhi state. Post decision, the monthly MWs in Delhi for unskilled worker increased from INR. 9,724 to INR. 13,350. Wages for Semiskilled workers rose from INR. 10,764 to Rs. 14,698, while those for skilled workers rose from INR. 11,830 to INR. 16,182 per month (Indian Express, 2017).

In the above context, it is crucial to note that the AAP government's political leadership and in particular the labor ministry and minister took credit for getting a favorable judgement and used it to politically propagate AAP. In reality, the decision of revising MWs in Delhi owes a lot to the Central TUs, who came together initially for collective action for a common cause. However, in this case, their voice, regardless of presence in the MW fixation committee constituted by the Government, was not heard. The role of TUs was relegated to just membership in the committee, which is a significant setback for acknowledging TU's contribution in the public policy backdrop. We use this case and examine the capacity of TUs to engage in collective action and contribution (or the lack of it) to public policy and enhance workers' welfare.

Role of Trade Unions in MW Policy

In India, the journey of TUs can be traced back to the end of World War I (Dessler & Varkkey, 2018; Kumar & Varkkey, 2017). Historically, TUs have played a crucial role in protecting workers' interests by working in tandem with the government to enforce and comply with a few fundamental labor standards/ethos. Therefore, the Trade Union Act of 1926, which allows the right to form a TU within the Indian republic, was implemented (Sheroff & Bhargav, 2019). Postindependence, India adopted a centralized planning approach for economic development through five-year plans, which allowed TUs to contribute to shaping labor and economic policies (Varkkey, 2015).

Since the 1990s, India has adopted a neoliberal economic approach, and its effects have impacted the labor policies and legal framework. Analyzing labor law reforms in India, Nanda (2019) observed that current reforms are a direct attack on union density and union coverage since it detracts the negotiating rights by rigidifying membership and composition criteria of TUs in any establishment. Sundar (2014) also had echoed similar thoughts and offered a critical account of the mismanagement of labor law reforms in protecting workers' interest. The author contended, lack of clear and sensitive strategy from the government and its associated think tanks while introducing labor law reforms contributed to 'wholesale damning of the inspection system', which effectively weakened labor protection, including enforcement of MW policy. It is also argued that Indian TUs tend to have little or no direct influence over non-compliance of labor standards, including MW. Our literature review indicates that the extant research about the role and impact of TUs on MW enforcement and compliance is limited. Meanwhile, Arora (2017) observed that TUs in India, unfortunately, confined themselves only to 'job protection' in stead of pursuing the real agenda, i.e., 'job creation'. Hence, Indian TUs, to protect the workers' interests, need to rethink their approach and embrace labor law reforms by closely working with both the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT