Manpower ‘contagion’ and flexibilization of labour market
July 27, 2015, 7:32 pm
Last weekend I attended two meetings—the first is organized by the Free Trade Zone workers, the second by the office-bearers of branch unions of the CMU. The principal focus of the both meetings was manpower agencies and the labour market. The second meeting was more focused as its organisers had adopted as the theme for their event: "Is it the end of permanent employment?" In fact, I borrowed General Secretary of the CMU, Comrade Sylvester Jayakody’s apt phrase, "manpower contagion" as part of the title of this article.
I have no idea when the manpower agencies entered the Sri Lankan labour market. When the Mahaweli Development Project was underway, private agencies entered as intermediaries in bridging the demand for and supply of labour for various project sites. Individual intermediaries also facilitated the finding domestic helpers. Foreign employment agencies have proliferated since the beginning of the outflow of labour first to the countries of West Asia and later to other emerging economies. As far as I know, only very limited studies were done on the subject of the role of these intermediaries. According to the data I possess, these agencies usually charge from the organization requires labour a once-and-for-all payment. When the workers were transferred to said employer, the role of the intermediaries usually comes to an end. The responsibility of the employee would be shifted to the new employer. The manpower agencies are different as they leave the employee rather ‘undefined’, an issue to which I will turn shortly.
There is another novel element. In the past, this service of intermediaries was used only by the private sector. Today, many government and semi-government agencies also use manpower agencies in meeting labour requirements. Lake House, Sri Lanka Telecom etc have been dependent on manpower agencies to ‘recruit’ workers. National Savings Bank once hired about 500 people through manpower agencies.
Manpower agencies have been very much present in the Free Trade Zones and also in many private sector companies. Comrade Jayakody used the word ‘contagion’ primarily because of the increasing presence of the manpower agencies in the Sri Lankan labor market. The degree of extensity and velocity of the presence of manpower agencies appear to be phenomenal.
The way in which manpower agencies operate is quite simple. When a company needs additional labour, like in good old days it does not advertise calling for applications. It contacts manpower agencies some of them were set up by people with political connections. The manpower agency concerned sends a list of names to the employer company which selects some of them. These employees are neither the employee of the company nor the employee of the manpower agency. Company pays a daily wage which may be a little higher than the wages of its regular employees. In many FTZ situations, if the daily wage of the regular employee is Rs 750, manpower worker gets about 1200- 1300 and out of which about 1,000 is paid to the worker and the balance goes to the manpower agency. For the calculation of ETF and EPF, the only payment made to the worker is taken into account. These workers do not enjoy even limited rights of the regular workers. For example, they are entitled to only half a day of leave per month!
Is the manpower agency modality of labour demand and supply popular among workers? Well, ironically it is and this preference shows the fetishistic character of the commodity ‘labour’. This system provides a new kind of freedom to workers. They can work when they wish to do so; and when they prefer leisure, they can keep away. Similarly, the employers get responsibility-free labour which comes to them without any strings unlike in the past. Recruiting and sacking can be done through SMS although the ‘hire and fire’ cannot be applied in this context with rigorous meaning those words have embodied historically. Another interesting development is that some regular workers find additional employment in their ‘free time’ at different companies. Hence, we are entering into a freer labour market condition.
This is what neoliberalism and the international financial institutions have been calling for since the early 1990s. Recently, European Institutions (troika) that includes European Union, European Central bank and the International Monetary Fund demanded the left wing Syriza government take measures to liberalise the labour market, meaning hiring and firing should be made easier. This has been one of measures prescribed by the right wing economists in Sri Lanka. Their argument is that would make the labour market more rational and efficient. While the bourgeois economics called for supply-determined price in the goods market, they call for demand–determined price at the labour market. We have witnessed everywhere and everywhen, this so-called liberalization or flexibilization has led to increasing income inequalities, weakening worker organisations and poor working conditions.
The extent to which these developments have affected the human living condition is shown in a recent IMF document. Even IMF has been compelled to accept and propose that one of the solutions to increasing income and wealth inequalities is the unionisation of the workers!
I read the election manifesto of the United National Front of Good Governance (UNFGG) that proposes to promote moribund idea of social market economy. The countries that adopted SME have now abandoned it. The clearest example is Germany, which has not only abandoned social market economy, but also played a leading role in forcing Greece to adopt a policy package that runs counter to social market economy. Under social market economy, Germany adopted job and employment security making firing more difficult. However, I did not see any suggestion in the UNFGG to face this increasing manpower contagion.
It was a welcome move on the part of the trade unions and worker friendly organisations to flag this issue in the context that none of the main political parties wish to encounter it and to find a justifiable solution to it. If this issue is put on the backburner, we will find a class of ‘slaves’ in modern factories. Capitalists will not hesitate to revive archaic forms of exploitation if it helps enhance their profits.
The writer is the co-coordinator of the Marx School.
e-mail: sumane_l@yahoo.com
