What does the labour minister, Soodesh Callichurn, really believe? It’s a good question given that barely six months after bringing a pro-worker law, he seems to be intent on knocking the legs out from under that same class.
The Covid bill is nothing short of a massacre in terms of workers’ rights, the most important provisions being firing a worker by paying him just a month’s salary, reducing him to atypical work by foisting working from home or allowing employers to simply put workers on unpaid leave and then re-hiring them at lower pay and worse conditions.
The ideology behind it is to get the economy rolling again by allowing employers to more easily fire their workforce and cut their costs to stimulate investment and prevent more businesses from shutting down. The government can point to the economic crisis sparked by Covid to excuse itself for this ultra-liberalisation of the labour market.
Well, the question now becomes what happened the last time capitalism crashed in 2008 and in response, the labour market was liberalised under the Employment Rights Act? Did enterprise closures slow down? Manufacturing is the most labour-intensive sector in the country so it stands to reason that it would have been one of the biggest beneficiaries of liberalising the labour market. Did fewer manufacturing firms close after 2008? As it turns out, closures of manufacturing firms actually speeded up after the passing of the Employment Rights Act. In 2008, 35 firms closed down. In 2010, it was 48 and so it continued until 2019 when the Workers’ Rights Act was passed. OK, so did it lead to more private investment? As it turns out, private investments after 2008 actually shrunk, rather than grew. Until 2010, there was no growth in private investments and each year after that, private investments made up a shrinking proportion of GDP with each passing year: 18.5% in 2011, 17.5% in 2012, 16.2% in 2013 and so on until it shrunk down to 14.4% in 2019 – the year the Workers’ Rights Act was passed. Does taking a sledgehammer to workers’ rights improve the economy and investment? The facts suggest no. After all, had an open-season on labour laws transported us into the land of milk and honey, there would be no need for a Workers’ Rights Act. So what did a ‘flexible’ labour market accomplish? Well, Callichurn himself let the cat out of the bag on 9 August 2019 when he told parliament that all it did was allow businesses to benefit “from incentives of lower firing and overtime costs”.
But don’t take my word for it. Here’s Callichurn once again: “The reform of the labour law was based on the assumption that the liberalisation of termination of employment and hours of work would create optimal conditions for investment and generate new productive jobs. A decade after its enactment, there is no evidence of any trickle-down effect. The liberalisation of the conditions of employment has not produced the expected results, neither in terms of job creation nor in terms of an increase in the inflow of FDI. The promise of flexi-security has also not been realised.” He goes on to add that all labour market liberalisation accomplished the last time round was a massive increase in unemployment and non-payment of wages. He knows as he cited the numbers himself in the National Assembly. So why, after being a fierce critic of the Employment Rights Act and its liberalisation of the labour market from 2008 onwards is Callichurn now adopting exactly the same measures for this latest crisis?
What does Callichurn really believe? Most likely what he has been told to believe.