Karnataka ranked second in the country in attracting foreign direct investments from October 2019 up until the first quarter of FY21, trailing only behind Maharashtra. Karnataka attracted ₹41,000 crore during the period, or 18.5 per cent of the total FDI that came into the country.
But in September, Gujarat surged ahead and Karnataka fell to the third place with just 15 per cent of the total FDI at ₹58,204 crore. Gujarat and Maharashtra attracted ₹1,38,530 crore and ₹79,216 crore, respectively, according to data from the Ministry of Commerce and Industry.
Amid the COVID-19 stress on industries and investments and the state losing out to others, Chief Minister B S Yediyurappa pitched hard to project Karnataka as a favoured destination for FDIs. He reiterated that his government was committed to set a benchmark in this regard.
In August, referring to the NITI Aayog 2019 Innovation Index that placed Karnataka at the top, the Chief Minister said it was possible because of the sheer availability of talent, reputed educational institutions and thrust on research and development in the industrial sphere.
Two months later, he claimed that his government had further simplified labour laws to attract investments and boasted that the state was home to 400 of the Fortune 500 companies in the world.
Amid the pandemic, the government sensed an opportunity to quickly ram through legislations or bring ordinances that weakened the labour laws.
On the lines of the Centre’s decision, the Karnataka government in July promulgated an ordinance to dilute the major labour laws, including the Factories Act, 1948, to improve the ease of doing business in the state. It essentially exempted industrial establishments employing between 100 and 299 people from seeking government’s approval for lay-offs, retrenchment or closure of establishments.
It also repealed the standard eight-hour working day rule, allowed a 12-hour shift and increased the overtime limit per quarter from 75 hours to 125 hours. The labour law amendments were, however, defeated in the legislative council, as the government did not have a majority. But the BJP government is now banking on the support of the JD(S) to get the controversial bills cleared.
Even as the government aims to bring in pro-industries legislation, labour unrest, particularly in the wake of job losses caused by the COVID-19 crisis, and labour exploitation have only increased. The violence that erupted on December 12 at the Taiwan-headquartered Wistron Infocomm’s Kolar plant was a result of prolonged labour exploitation that went unaddressed. The plant, about 45 km from Bangalore, manufactures iPhones for Apple.
Wistron, which initially pegged its losses at ₹437 crore, revised the figure to ₹47 crore. The state deployed its resources to work with the management in resolving the dispute as quickly as possible. But the employees now fear that their jobs are at stake.
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Even as internal reports and employees’ testimonies revealed gross mismanagement in salaries paid and treatment of workers, the government brushed off the unrest as a stray incident and assured that the investor ecosystem in the state will not be affected.
This, however, is not a one-off incident as the government claims. The employees of Toyota Kirloskar have bee involved in a stand-off with the management and their protest complete 50 days next week.
The management locked out the car manufacturing facility at Bidadi, on the outskirts of Bangalore, ever since about 3,000 workers went on a strike in November seeking better work conditions. The management met the Chief Minister and the labour minister to seek help in resolving the dispute. Despite promises, the state hasn’t been able to end the dispute.
Former Chief Minister H D Kumaraswamy, who has a hold in the region, tried to intervene and also asked the state to act swiftly to resolve the dispute. He took a dig at the government in a series of tweets highlighting the labour issues and called for action in the interest of the state’s industrial development.
“The company (Toyota Kirloskar) has pushed its 3,000 workers into the street either by supporting the stand of the middle-managers or acting on flimsy allegations against the staff. It is not proper on the part of the companies that thrive by utilising our land, water, air and infrastructure to behave in such a cruel manner with our own people. The heads of the company should keep aside their prestige and act in a humane way,” Kumaraswamy had tweeted.
The solution does not appear to be in sight though the strike by the employees of Toyota Kirloskar’s Bidadi plant is completing two months. The differences between the workers and management, issues related to middle managers and the government’s apathy may also be the reasons..
— H D Kumaraswamy (@hd_kumaraswamy) December 20, 2020
He said the Toyota management should introspect in the wake of the stand taken by Apple and Wistron acknowledging their mistakes and resolving the dispute fast.
Much before these two incidents, soon after the lockdown, garment factory workers in the unorganised sector had battled similar crises. In May and June, nearly 1,300 workers from a production unit in Mandya went on a 50-day sit-in protest against the management’s decision to suddenly lay off people citing lack of orders due to the crisis caused by COVID.
While the district administration was involved in resolving the dispute, employees alleged that the company forced many to resign and withdrew its complaint to the labour department. Similar was the case with Arvind Mills (Arvind Fashions) workers. The company closed the 12-year-old plant all of a sudden making workers struggle for their livelihood.
Even Congress leader and former Chief Minister Siddaramaiah blamed the newly introduced labour laws as the root cause of workers’ unrest in the state. He said the companies were using the new labour laws as a shield to increase work hours and were trying to employ more workers under the contract system.
In a letter to the Chief Minister, Congress leaders said that Prime Minister Modi, who called on the Chief Minister to express his concern about the Wistron incident, had failed to express concern over workers rights being trampled upon.
ಖಾಸಗಿ ಕಂಪೆನಿಗಳ ಆಡಳಿತ ಮಂಡಳಿಗಳು ಮತ್ತು ಕಾರ್ಮಿಕರ ನಡುವೆ ಉಂಟಾಗಿರುವ ಬಿಕ್ಕಟ್ಟನ್ನು ಸರ್ಕಾರದ ಮಧ್ಯಸ್ಥಿಕೆ ಮೂಲಕ ಸೌಹಾರ್ದಯುತವಾಗಿ ಇತ್ಯರ್ಥಪಡಿಸಬೇಕು ಹಾಗೂ ಈಗಾಗಲೇ ಜಾರಿಗೆ ತಂದಿರುವ ಎಲ್ಲ ಜನವಿರೋಧಿ ಕಾಯ್ದೆಗಳನ್ನು ರದ್ದು ಮಾಡಬೇಕೆಂದು @CMofKarnataka ಅವರನ್ನು ಆಗ್ರಹಿಸುತ್ತೇನೆ. 1/5 pic.twitter.com/g6ptpwvRW0
— Siddaramaiah (@siddaramaiah) December 20, 2020
Alternative Law Forum, a lawyers’ collective working on social issues, brought out a detailed 60-page report on workers laid off during the pandemic and noted that sudden closure of factories, illegal lay-offs, reduction in overtime hours, pressure to resign or be transferred, led many into a debt trap. The report said women workers across the state faced hardship with many expressing suicidal thoughts.
In a series of recommendations to the state, ALF demanded the government to increase its resources in the labour department to inspect, investigate and resolve labour disputes and uphold the rights of workers in the state.