The ULCCSAn 80YearOld Construction Labour Cooperative

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2005 1: 263International Journal of Rural ManagementRajinder Chaudhary

The ULCCS : An 80-Year-Old Construction Labour Cooperative

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The ULCCS: An 80-Year-Old Construction Labour Cooperative 263

THE ULCCS: AN 80-YEAR-OLD CONSTRUCTION

LABOUR COOPERATIVE

Rajinder Chaudhary

Cooperatives are one of the alternatives to privatization or governmentcontrol of enterprises. Textbooks on neither economic theory nor publicdebate between privatization and its critiques have explored the role of co-operatives as an alternate form of enterprise management. In public image,cooperatives are largely either government-run or are private enterprisesmasquerading as cooperatives. Hence, macro-data on cooperatives is suspect.This study of an 80-year-old construction labour cooperative is part of anendeavour to see if there are other cooperatives, in addition to a few well-known ones, that do not fit this image. Besides checking on its cooperativeand self-reliant character, an attempt has also been made to document itsstructure and processes in sufficient detail to provide initial input for itsreplication. This process has led to a more critical reading too.

When policy debate is confined to ways of privatization and its critique, to expandits scope, it is important to document existing alternate forms of ownership andmanagement. Cooperatives are one such alternative, but neither textbooks oneconomic theory nor public debate has a space for cooperatives. This is particularlysurprising because it is reported that in 2002–3 there were 0.55 million coopera-tives in India with 229.51 million members (NCUI 2004). The National LabourCooperatives Federation of India claims to be ‘representing 146 District, 14 StateLevel Federations of the country and 34,744 Labour Contract/Construction &Forest Labour Cooperatives, having a membership of approximately 24 lakhs …[which] are executing the works [of] more than 1100 crores per year.’1 Anothersource reports that there were more than 3,500 labour cooperatives in Haryanaalone and about 29,000 all over India (Prasad 2001). In spite of these figures,absence of cooperatives from the public discourse on public policy is on accountof the fact that this word has either come to be associated with IFFCO, KRIBHCO,

International Journal of Rural Management, 1(2), 2005

Sage Publications l New Delhi/Thousand Oaks/LondonDOI: 10.1177/097306800500100207



264 RAJINDER CHAUDHARY

Hafed, Markfed, etc., which are looked upon as government-run cooperatives,or with private enterprises masquerading as cooperatives. It is anybody’s guessas to how many of the aforementioned 0.55 million cooperatives are real co-operatives. Consequently, macro-data on cooperatives is not viewed to be reliableand cooperatives have not emerged as an alternative form of organization inpublic debate. This study is part of an endeavour to see if there are other coopera-tives, in addition to few well known ones like sugar cooperatives of Maharashtra,which do not fit this image.2 Such documentation, it is hoped, will enrich thedebate about forms of economic organizations.

The Uralungal Labour Contract Cooperative Society (ULCCS)3 of Kozhikodedistrict, Kerala, celebrated its 80th anniversary in February 2005.4 In 2003–4, itdistributed Rs. 41.2 million as wages and other benefits to members, non-memberworkers and employees. At the end of December 2004 it had works worthRs. 335.4 million in hand. But this cooperative is not known in academic circles.5

This author heard about it from a senior Kerala Shashtra Sahitya Parishad (KSSP)leader, but it took many e-mails and phone calls over a month and a half to manyKSSP leaders to get to know its location because many of them either did notknow about it at all or had only vaguely heard about it.6 This happened eventhough the KSSP has a state-wide presence and is also ideologically sympatheticto cooperatives. Such is the level of ignorance about it.

Besides checking on the ULCCS’ cooperative and self-reliant character, anattempt has also been made to document its structure and processes in sufficientdetail so as to provide initial input to those who may be interested in its replication.This process has led to a more critical reading of the ULCCS.

DATABASE

Basic information about the ULCCS was collected by talking to its English-speaking members and employees over two visits of a week each in 2004–5, andfrom its reports and a few project reports done by local students for their post-graduate degrees. The ULCCS also has a web page (http://www.ulccs.net), butthis site provides very limited information. Data thus collected has been sup-plemented by interviews with a number of stakeholders of various categories.Besides, a questionnaire was also administered to 40 non-members.7 Non-members get less benefit, and have no participation in the management. In away they constitute the lowest rung within the ULCCS. As a full-scale surveyof all stakeholders was not possible, the questionnaire was restricted to the non-members to get at the ‘worst case scenario’.8 The author selected respondentsrandomly on visits to three different work sites.9

The fact that the author could neither understand the local language, Malayalam,nor had full-time and independent interpreters, did limit cross-verification ofinformation and did not allow a deeper probe. However, within these limitations,




the author did try to speak to as many persons as possible and with as manydifferent interpreters. It is hoped that this study will encourage a more detailedinvestigation of the ULCCS.

HISTORICAL ORIGINS AND PROGRESS

The ULCCS has its roots in the reformist movement led by Guru Vagbhadananda,a nationalist social reformer and contemporary of another well-known reformerof Kerala, Narayana Guru. He was against rigid caste barriers that prevailed inthe early twentieth century.10 As a result of their opposition to caste discrimination,the then elite stopped employing followers of Guru Vagbhadananda from Thiyacommunity, considered to be ritually low. To overcome this denial of job oppor-tunities, a society named the Uralungal Coolie Velakkarude Paraspara SahayaSangham (Uralungal Wage Labour’s Mutual Aid and Cooperative Society)11 wasformed with 14 members and formally registered in 1925.12 When till 1926 itdid not get any work, official agencies proposed to deregister it, but the matterdragged on. It got its first contract only in January 1928, about three years afterit was first registered. It has survived and prospered. Many of the landmarkbuildings of Vatakara town, like the hospital, college and rest house were con-structed by it. It was re-registered in 1967 with its present name and shifted toits own building in 1969.

Up to 1985 its yearly turnover had been slowly increasing, when it was aboutRs. 6.0 million (Government of Kerala 1999).13 Turnover declined thereafterand it was less than Rs. 2.0 million in 1990.14 After that it recoverd, and in 2003–4its turnover was Rs. 263.8 million. This indicates that its rapid progress is a veryrecent phenomenon. The decline after 1985 was explained on account of thedeath of its president in 1984. There was uncertainty about the society’s survival.Many people withdrew their money, resulting in a shortage of working capital.This shortage was compounded by delay in payments by government agencies.Many members too left, as due to financial crisis wages could not be paid regularly.At this point membership is said to have declined by about 20 per cent. Recoveryafter 1990 was partly facilitated by a minister, who during his tenure ensuredthat government departments released payments promptly, thus reducingworking capital cost.

Table 1 gives the tenure of its presidents. It shows that the ULCCS has hadfairly long-lasting presidents, including a grandfather–father–son trio. Long tenureof a few presidents, with three of them from the same family, would make anyonesuspicious about it being a genuine cooperative. We will come back to this issuelater. For the present it may be mentioned that sons did not directly succeedtheir fathers, and the incumbent president joined the organization only after thedeath of his father. During the lifetime of his father, none from the family wasallowed to join the society even though they were technically qualified as well as




unemployed. The incumbent president, a civil engineering diploma holder, wason his way to the Middle East when his father died while travelling on work. Atthis point he joined as an employee, and stayed so from 1984 to 1995. Then hebecame a member and took over as president.

Table 1Tenure of Presidents of the ULCCS

Name of the President Tenure

Chapplayil Kunhekkannan Gurikkal 1925–31Paleri Chandaman (grandfather of the current president) 1931–49Kunhappa Master 1949–52Vaprath Cheuuman 1952Paleri Kanaran Master (father of the current president) 1952–84Kattil Damu 1984–92Administrator∗ 1992–93P.K. Balakrishnan 1993–95P. Rameshan 1995 onwards

Source: ULCCS records.Note: ∗The administrator was appointed when term of the board of directors for all

cooperatives in Kerala was reduced to three years from five. This was not specificto the ULCCS.

STRUCTURE

Three categories of people work at the ULCCS: members, non-member workersand employees. In February 2005 there were 411 members and about 1,900 non-member workers on its rolls. Among these were 47 women members and about300 non-member women workers. Some of these members or workers mighthave been dormant. Moreover, the number of workers employed at any point oftime could be still less. It is estimated that in 2003–4 the number of active workers,members and non-members was about 1,125.15 Membership is restricted by theby-laws of the ULCCS to persons living in a narrow region surrounding Vatakaratown. Except for a maximum of seven sympathizers, only actual constructionworkers can be members of the ULCCS.16 Table 2 has data about the profile ofmembers. Among workers, there are both members as well as non-members.Obviously, members are considered senior and have the first claim in em-ployment. Presently members get work almost daily. Non-members do not haveregular employment. Their employment depends on the quantum of work inhand.17 During the monsoon, when labour requirement is reduced, non-members are divided into different blocks, with each block being employed fora week or so in rotation. This way the possibility of playing favourites is ruledout. Non-members can work for private individuals but not for other contractors.




A new person seeking work is directed to come to the office on Sunday whenbasic planning for the next week is done. If work is available, then the person isput on it and after observing his/her work for a few days, a non-member card isissued.18

Table 2Profile of ULCCS Members∗∗∗∗∗

Variable Categories Percentage

Age distribution Below 20 0.020–30 20.030–40 26.040–50 26.050–60 19.0Above 60 9.0

Sex distribution Male 68.0Female 32.0

Educational level Below 10th 68.0Failed 10th 27.0Passed 10th 2.5Pre-degree failed 2.0Technical qualification 0.5

Shareholding (number ofshares held by a member)∗∗ 1 20.0

2–10 2.010–25 2.025–50 3.050–100 11.0100–500 20.0500–800 42.0

Source: Government of Kerala (1999).Notes: Discussion of survey results in the text also has some additional information

about the profile of non-members.∗ This pertains to 1998–99. The total number of members at that time was243.∗∗ Share price is Rs. 25 and the maximum number of shares that an individualcan hold is 800.

Members of the ULCCS have a monthly general body meeting on a Sundayor a holiday. All members are expected to take an active part in these deliberations.Members repeatedly absent from these monthly meetings can even be penalizedby being deprived of wages for May Day, a paid holiday for members otherwise.19

The Uralungal Labour Society Members Cultural Centre functions as a culturalwing and has been periodically undertaking activities like running night classes,a library and organizing children’s activities.




Members elect a board of directors (BOD) for a term of five years. There arenine directors inclusive of the president. All directors and the president need tohave worked as construction workers and are paid daily wages like workers ratherthan salaries like employees. All directors are full-time. The BOD meets everyday and collectively runs the show. All its decisions are unanimous as each directorhas veto power.20 The BOD also has a paid secretary who is appointed with theapproval of the State Cooperative Department and acts as head of the office. InFebruary 2005 there were 15 office employees and another 28 were employed astechnical staff.

Each director is in charge of certain number of divisions or work sites. Eachwork site/division has a site leader who is responsible for the work there. Thenumber of site leaders varies between 20 and 25. Besides undertaking constructionwork, the ULCCS also operates mines and quarries spread over 50 acres, a wood-work section, a stone crusher unit, a hollow brick unit and a quality control labof its own. However, all these divisions (except for the hollow brick unit andcrusher unit) basically meet the organization’s own needs and their productsand services are not sold or hired out.21

At the end of 2002–3 it had a total share capital of Rs. 6.72 million, out ofwhich Rs. 2.7 million was contributed by the government and rest by members.Besides share capital and bank loans, working capital is also mobilized by takingdeposits from members and the general public. At the end of 2003–4 it hadmobilized deposits worth Rs. 262.6 million (Table 3). It has a huge amount ofmodern construction machinery. It had assets worth Rs. 248.8 million on itsbalance sheet at the end of the fiscal year 2002–3.

Overall, the ULCCS is governed by the provisions of the Kerala StateCooperative Law, whereby, amongst other things, all regular appointments haveto be through formal channels against sanctioned posts and with the approval ofthe department.22 Service rules of employees are in place. The CooperativeDepartment also conducts audit and stock verification once a year. All majorpurchases and investments have to be approved by it.

FUNCTIONING

In terms of its by-laws, the area of activity of the ULCCS was earlier confined tocertain districts surrounding its headquarters, but now it extends to the wholeof Kerala. The BOD, which, as already mentioned, meets daily, scrutinizes thework that is advertised and files tenders. While technical estimates are preparedwith the help of the technical wing, BOD members have over time developedan expertise to make final financial bids.23 After work is allotted to the ULCCS,the BoD does backward planning as it is very particular about meeting the timeschedule. It draws up a work schedule, appoints a director to be in charge of theproject, and allocates required machinery and workers.24 Every quarter or so at MAHARSHI DAYANAND UNIV on March 1, 2012irm.sagepub.comDownloaded from



Table 3Certain Key Data for the ULCCS (Rs. million)

Share Turnover/Jobs DepositsYear Members† Capital Undertaken∗ Mobilized Net Profits

1997–98 233∗∗ 4.94 53.8 14.92∗∗ 0.031998–99 243∗∗ 5.24 58.0 32.83∗∗ 0.041999–2000 238∗∗ 5.49 83.6 52.30∗∗ 0.122000–2001 275∗∗ 5.84 106.6 109.39 0.162001–2 293∗∗ 6.40 153.3 157.73 0.162002–3 307 6.70 174.2 200.45 0.362003–4 316 7.20 263.8 262.60 0.30

Source: Based on ULCCS reports and publications, Government of Kerala (1999)and Kuniyil (2003).

Notes: †As there is no retirement age for members, some may not be active. As perGovernment of Kerala (1999), of 243 members about 200 were active, that is,about 82 per cent of listed members were active. Data for 2003–4 also showsthat a similar proportion of registered members was active.∗Turnover or value of jobs undertaken indicates the total contracted value ofall those projects whose financial account is closed in the current year, that is,the total value of all the projects for which final payments have been receivedor made in a particular year. This is irrespective of when the project was phys-ically completed. In that sense, turnover is not indicative of annual performance.∗∗ Kuniyil (2003: 33).

the BOD has a full-day meeting for major planning. The board also has a monthlymeeting with engineering cell employees.

At the end of every workday site leaders collect at the central office and givetheir requirements of additional men and material for the next day and submitbills for the day.25 All directors are also at hand to discuss and dispose of thesematters. The office is open till around 10 P.M.26 Work starts early in the morningat 6.30 A.M. and site leaders or their nominees/senior members collect machineryand material, and any additional hands that they may require for the day. Otherworkers living in the neighbourhood also come here to get a ride to the worksite.

Sunday is a weekly off. This is really unusual as manual workers seldom havethis luxury. However, senior/more active members do come to the office evenon Sundays for general sharing and planning for the next week. But except incase of an emergency, no construction work is undertaken on Sundays. Workinghours for workers are from 8 A.M. to 5 P.M., inclusive of various breaks. Disciplineis maintained by putting concerned workers on tasks requiring hard labour likequarrying, where ordinarily new non-member workers are used, or by suspend-ing workers from work for few days. Any financial bungling attracts strict actionand drinking on the job is just not tolerated. ULCCS workers are also expectedto adhere to certain norms of social behaviour. For example, if they are staying at at MAHARSHI DAYANAND UNIV on March 1, 2012irm.sagepub.comDownloaded from



the work site, it is expected that they do not create any problem for local residentsand are in their rooms by 9 P.M. One found that even in the early morning hours,when there are not many people around to observe or object, smokers threwaway cigarettes before entering the office.

From its early days, bulk of the work that the ULCCS undertakes is govern-ment work, but it also undertakes private institutional work. Private individualsseek to give contracts, but the ULCCS does not undertake such jobs for it findsthese to be too small. Even members get their houses constructed through privatecontractors rather than through the ULCCS. It does not indulge in subcontract-ing on any significant scale.27 While it claims to not indulge in subcontracting atall, actually certain small jobs considered to be too ‘specialized’ or too hard orfor which local labour is not available are given out on piece rate basis to smallartisans.28

In 2003–4 the total worth of purchases made was Rs. 112.5 million. The maininputs used by the ULCCS are steel, cement and gravel. For cement and steel, itenters into direct contract with manufacturers through public tenders, and forgravel and sand it has its own leased mines. Site leaders are authorized to makepetty purchases through members or technical staff and two or three membersverify the bills. The ULCCS has its own workshop for machinery and vehiclerepairs. Drivers can get minor/emergency repairs of vehicles/machinery done attheir level. In case of major repairs, the ULCCS operates through a few work-shops with which it has over time developed a stable relationship. It has a specialistand old reliable member to coordinate it.29 In case of particularly major/specialrepairs, quotations are called. A director is in charge of all vehicles and machinery,and their repairs.

Members working in mines and quarries keep an eye on the movement ofmaterial and all movement of material has to be verified by two to three members.In fact, in all aspects there is great reliance on vigil of members, and on an openand democratic atmosphere, which facilitates free flow of information.

REMUNERATION

‘Equal pay for equal work’ does not work in Kerala, and differential wage ratesfor men and women are common. This has the backing of the government.30 Sois the case in the ULCCS.31 While the regular daily wage rate for males, includingfood allowance,32 is Rs. 180, for females it is Rs. 110. Those doing relatively hardwork like working with tar get Rs. 10 to 20 extra. Site leaders are paid Rs. 230and directors are paid Rs 250 per day.33 Till a few years ago even the presidentwas paid this amount.34 Of late the president gets a daily wage of Rs.500. It maybe mentioned that the incumbent president is a civil diploma engineer. Non-member workers are paid less. For females it varies between Rs. 90 and 120 andfor male non-members it varies between Rs. 120 and 150. The BOD decides




the wage rate for individual non-members. As leaders and office workers haveto work longer hours, they used to get an additional allowance of Rs. 40 to 50 perday, but now they get fixed monthly amount. For the president it is Rs. 2,500,for directors it is Rs. 1,000 and for leaders it is Rs. 500. Similarly, different amountshave been fixed for office employees.

It is admitted that these wage rates are less than the market rates for constructionof individual houses, which for skilled male labour can go up to Rs. 200, butthey are better than what contractors pay. Working with the ULCCS is preferredon account of regularity of work and other benefits.

Wages are paid weekly on Saturdays, though part of wages can be paid daily.35

Ten per cent of wages due to members are put in a thrift fund and at the end ofthe year members are issued equivalent shares on account of this. This way sharecapital is built up, but an individual can own share capital only up to Rs. 20,000.Besides daily wages, members get bonuses twice a year at festival time, whichpresently is 20 per cent of wages earned. Non-members are paid bonus at therate of 10 per cent. Members also get following benefits: provident fund contri-bution of the employer @ 12 per cent of wages, medical allowance @ 2.5 per centof wages, gratuity payment, matching labour welfare fund contribution, partcontribution towards premium of LIC policy taken by members, holiday wagesfor 12 paid holidays a year, and educational and marriage allowance for theirchildren and/or themselves.36 In addition, by paying Rs. 20 per month, memberscan get benefits of the Construction Workers’ Welfare Fund, to which the ULCCSis required to contribute 1 per cent of its revenue. In case of accident on duty, allmedical expenses, for members as well as non-members, are paid and duringthe period of recuperation half the wages are also paid.37 In case of the work sitebeing out of town, arrangements for stay and transportation are made, and workersget a special allowance. For the labour welfare fund, maintained at the state level,members contribute Rs.4 twice a year and ULCCS makes a matching contri-bution of Rs. 8. Non-member workers do not get all these benefits. Besides wages,non-member workers only get bonus of 10 per cent, all medical expenses andhalf wages during recuperation in case of accident while on duty, marriage al-lowance and medical insurance coverage.38 Other benefits mentioned are formembers alone.

Employees get salary as well as other dues as per the norms of the Kerala Co-operative Department. Regular posts have to be sanctioned by the departmentand filled through advertisement. However, the BOD can fill temporary postson its own. In January 2005 temporary employees were getting at least Rs. 3,000,regular employees at least Rs. 5,273 and maximum salary was Rs. 9,117.

As per the by-laws of the ULCCS, a maximum of 10 per cent of net profitscan be distributed as dividend. One finds that net profit itself is very small, sodividend is not much (Table 3). There is a provision for payment of specialbonus to members of the BOD, but they return this special bonus to the




organization and it is counted as miscellaneous income. This implies that mostof the surplus generated is paid out as wages and benefits.

This data shows that overall wage and salary spread amongst workers as wellas among employees is quite narrow. It is particularly noteworthy that while amale member gets at least Rs. 180, a site in charge gets just Rs. 230 and directoronly Rs. 250, which is less than 40 per cent more, This narrow wage spread hasalso been observed in some of the other cooperatives (Chaudhary 2005b).

EXTERNAL HELP

To see if one can treat the ULCCS to be self-reliant, let us look at the extent of ex-ternal funding/subsidy that it gets. Prior to 1954, labour cooperatives in Keraladid not get any special benefits, but thereafter started getting some preferentialtreatment, starting with the waiving of security/earnest money deposits. Now,amongst other benefits, all labour cooperatives that have tendered for a particularwork are offered the work at a 10 per cent higher price than the lowest bid of aprivate enterprise.39 But this preferential treatment is only for state governmentcontracts. For central government contracts no such preferential treatment isavailable. In addition to this, the government of Kerala has extended other bene-fits, like giving preference to the bills of cooperatives in payment and paymentof some advance money to all labour cooperatives.40

As a part of the People’s Planning Programme, the ULCCS has been gettinglot of work from panchayati raj institutions. The Kerala government has issuedorders that for work of panchayati raj institutions, the ULCCS is to be treated asa ‘beneficiary committee’ as it is a cooperative of workers. As a result, work canbe allotted to it at government-approved rates without calling tenders. But giventhe fact that government rates are not regularly revised, getting this kind of workat these rates is said to be not so profitable for the cooperative and is mainlytaken up in the spirit of community obligation.

Depending on their track record, labour cooperatives are classified into variouscategories and an upper limit on the size of work that can be allotted to them isimposed. However, in case of the ULCCS, since 1999 an exception has beenmade and the upper ceiling has been raised to Rs. 50 million, while limit forother A category cooperatives is Rs. 1 million. Besides these general benefits avail-able to all labour cooperatives, in 1995–96 the Kerala government under theLeft Democratic Front (LDF) provided 50 per cent finances for a Rs.15 millionproject of putting up a hollow brick unit and a stone crusher. It was in the formof Rs. 3 million as share capital, an equal amount as loan and Rs. 1.5 million assubsidy. A part of loan and share capital has been returned. As of 31 March 2003,the state government held shares worth Rs. 2.7 million and another Rs. 2.4 mil-lion was due to the government on account of loan. Besides this, a grant ofRs. 0.2 million was received from HUDCO for providing training for the hollow




brick unit project. This is all the special external financial help that this cooperativehas received. It receives no regular subsidy. It has to pay the usual taxes and 1 percent of the billed amount has to be deposited towards the state ConstructionWorkers’ Welfare Fund. So, essentially it can be viewed to be a self-reliantcooperative.

When quizzed if they were getting special treatment at the hands of Left Frontgovernments and harassed by Congress-led governments, everyone denied it. LeftFront governments may have been a bit more sympathetic, but they do not faceany problem even with the Congress-led governments. Under the Left Front ithas been in the red too, and its recovery after 1990 was partly facilitated by aminister in a Congress-led government by ensuring prompt payment by thePublic Works Department. As regards handling corruption in dealing with thegovernment machinery, it was pointed out that this was not a serious matter.Except for asking for the cooperative’s vehicles for their personal use once in awhile, the government machinery did not expect any favours from the ULCCS.Such is the reputation of the organization.

PERFORMANCE

Table 3 gives some key data for the ULCCS. Surprisingly, data on person-daysof work created, and wages and other benefits paid to members and non-membersis not readily available. Annual reports made available only give profit and loss ac-counts from which it is not possible to get other information. So the discussionin this section is quite sketchy.41

Though one of its brochure claims that on ‘an average more than 1,500 workers,being 311 members and about 1,200 non-members, are daily engaged by thesociety’, the actual average number of workers employed is perhaps less (ULCCS,no date). The wages register for members for first six months of 2003–4 listed240 or 238 members and for the following six months 253 members. But closerscrutiny of the wage bill register for January and March 2004 showed that only232 and 229 members respectively out of 253 had worked in these months. So,for 2003–4, the average number of active members can be taken to be 246, withan estimated 224 actually working in any particular month. For the month ofJanuary 2004 total days of work put in by members was 5,407.25, with an averageof 23.31 days.42 Similarly, in January and March 2004, 790 and 868 non-memberswere listed in the wages register, but 689 and 758 respectively were actuallyworking.43 On this basis, the average number of non-members for 2003–4 canbe taken to be 829, with about 724 working in any given month. Hence, it isestimated that in 2003–4, the number of active workers, as different from regis-tered workers, members as well as non-members, can be taken to be around1,125 with 900 to 1,000 being employed in months of peak workload. For therainy season, this number would be lower.




Average daily wages for members came to Rs. 189.27 in January 2004.44 Basedon this average wage rate and total wages paid to members in 2003–4, the totalnumber of workdays put in by members is estimated to be 56,400. This comesto about 229 days per active member. Information about number of workdayscontributed by non-members was not available. However, a sample surveyshowed that non-workers were getting an average wage of Rs. 132.11 in February2005. Based on this estimate and data on total wages paid to non-members in2003–4, the number of workdays contributed by non-members comes to 169,126,with the average number of workdays per non-member being 204. This meansthat the total number of workdays put up by the labour in 2003–4 was 225,526.However, the wage rate in 2003–4 would have been less than in February 2005;consequently, the estimate of workdays is likely to be an underestimate and totalworkdays created in 2003–4 could be taken to be about 0.25 million, with anaverage of 204 workdays for non-members and 230 for members.45

Though its present size is of recent vintage and up to the 1980s it was muchsmaller, its survival for 80 years as a cooperative itself is highly commendable.Though it has had fairly long-lasting presidents, with three of them from a family,yet its structures and functioning leave no room for doubt about its ‘cooperative’character. Many of its features, like Sunday being observed as a holiday not onlyfor employees but for workers too, are seldom observed in the constructionindustry. Monthly meetings of all the members and daily meetings of directorsare indicative of its participatory character.46 Its member-controlled character isreflected in many other things too. When construction sites are full of open-airor shanty roadside accommodation for workers, the ULCCS hires buildings foreven cooking meals on work sites. For outstation jobs, buildings are hired by thecooperative and members provided weekly to and fro travel allowances, besidesspecial allowances. It neither uses labour contractors nor acts as one. Duringfield visits, it was observed that some members who could not do much work dueto old age and infirmity were still on the job. It was informed that old membersare allowed to work as long as they can come to the work site. Eventually an old/infirm member stops coming to the work site, but nobody asks her to withdraw.This was on account of deference to the long years put in by them as well asbecause even when they are not able to do much work, with their deep commit-ment and expertise, they prove to be an asset. All this is indicative of cooperativecharacter of the ULCCS.

Generally its functioning has been harmonious and elections have been unani-mous. But there have been instances of contested elections as well as expulsions.But last expulsion at senior level was way back in the mid-1970s, when twodirectors were expelled. The last expulsion of ordinary members took place in1972 for financial bungling. Now, rather than taking the extreme action of ex-pulsion, recalcitrant members are suspended for long durations. They eithermend ways or leave the organization on their own.47 It is pertinent to mention




that the board of directors has the power to just suspend a member. Only thegeneral body can remove a member.48 The last contested election was in 1999,when two extra nominations were received. However, it did not generate bitter-ness and in the next election, when the size of the BOD was increased, the twowho had lost the last election were taken on board. Surprisingly, presently, oneformer president is working as director, and of five former directors, one isworking as an ordinary worker and four are functioning as site leaders. All thesethings are indicative of an organization that has participatory management andquite an equitable distribution.

Is it really a cooperative or a party-controlled organization? That the Left/CPI(M) has a significant presence in Kerala is well known. Moreover, it is said thatthis area is more ‘red’ or ‘more’ CPI (M) than even the rest of Kerala. But it wassimultaneously also said that the ULCCS is not a CPI (M) outfit. If it were, theCPI (M) would have certainly liked to replicate it at least all over Kerala. Itwould have set up similar units elsewhere too. A majority of the workers doappear to be under the influence of communist ideology/CPI (M), but it wasrepeatedly pointed out that ‘we leave our politics outside’. Many CPI (M) activistsalso said that though under the influence of the party, by Kerala standards theULCCS is an independent cooperative. In Kerala many other cooperatives, par-ticularly cooperative hospitals, are said to have memberships up to more than10,000 and the concerned party, be it the CPI (M) or any other, effectively nom-inates the management. This, it was emphasized by many, is not the case here.Management of the ULCCS is independent. This, it was pointed out, is itsmain strength.

SURVEY RESULTS

The survey methodology has been explained earlier. It may be recalled that thissurvey of non-members was conducted in February 2005. Total non-memberworkers surveyed were 40. Of respondents, 81.08 per cent were male and18.92 per cent female. Workers had, on the average, 8.44 years of educationand the average period for which they had been working for the ULCCS was2.56 years.49 The average wage rate for women was Rs. 111.7; for men it wasRs. 136.4. The average for the whole surveyed group was Rs. 132.1. It may berecalled that the average wage for members in 2003–4 was Rs. 189.27. Whilesome reported that with a private contractor they would be getting less thanwhat they were getting here, the average wage that they expected to get from theprivate contractors was higher at Rs. 145.50 For women, the expected wage ratewas marginally less than what they were getting at the ULCCS. Reasons forworking for the ULCCS, even though it pays less, are given in Table 4. Regularityof work was the main reason.51 Better work atmosphere as well as its ownership




Table 4Reasons for Working for the ULCCS

Reason Number of Responses % of Responses

Regular work 29 58Better wages 2 4Less hours of work 2 4Better work atmosphere 5 10Owned by workers 5 10No response 7 14Total 50∗ 100

Source: Survey of non-members.Note: ∗Respondents were asked to choose as many reasons as valid. Hence,

the total is more than 40.

by workers were other important reasons cited. Wage rates and hours of workwere not often cited in this context.

A major aspect that was investigated concerned decision-making structure(Table 5). It emerged that site leaders and directors are the main decision-makingauthorities for operational decisions regarding deployment of workers. However,for important decisions like award of membership, it is the board of directorsthat wields authority. What is significant is that the president is seldom pointedout as the decision-making authority in the context of specific operations. How-ever, in response to a general question about who wields real authority, responseswere equally divided between president and the board of directors. What is equallysignificant is zero entries in the last column of Table 5. Office employees andtechnical staff are not listed by anyone to wield real power, as one would expectmore literate, technically qualified persons to.

As regards non-members’ self-image, only five (12.5 per cent) respondentssaw themselves involved in decision making. Twenty-six (65 per cent) respond-ents thought of themselves as just workers. The rest did not respond or their re-sponse was not clear. In fact, only 10 admitted to giving suggestions. This indicatesthat non-member workers are mere workers here. This is also evident from ourearlier discussion of processes and structures. When asked if the ULCCSundertook any other social activity, only 30 per cent said yes. Fifty per cent didnot respond to this question and rest said no.52 This indicates that the ULCCS isjust a job provider, albeit a good one. The leadership also repeatedly emphasizedthat they kept their politics out and once in the ULCCS, they focus on workalone. Issues like what workers do with their earnings and how male workersrelate to their female family members were not taken up. The cooperative wasconfined to cooperation in work alone.53

As regards facilities and benefits available, only two respondents said that theyhad to either partly or fully meet expenses in case of accidents at the work site.



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Table 5Decision-making Authority in the ULCCS

Who Decides Whether to Who Decides Place ofEmploy a Worker Work of the Worker Who Maintains Who Awards Who Wields

for the Day?∗ for the Day?∗ Discipline? Membership?∗ Real Power?

Site leader 13 (32.50) 17 (42.50) 19 (41.30) 0 (0) 1 (2.50)Director 11 (27.50) 18 (45.00) 12 (26.09) 7 (17.50) 0 (0)President 1 (2.50) 0 (0) ∗∗ 0 (0) 15 (37.50)Board of directors 5 (12.50) 2 (5.00) ∗∗ 16 (40.00) 15 (37.50)Employees – – ∗∗ – 0 (0)Technical staff – – ∗∗ – 0 (0)Members – – 2 (4.35) – 0 (0)Workers – – ∗∗ – 0 (0)Everyone – – 11(23.91) – ∗∗

No/unclear response 10 (25.00) 3 (7.50) 2 (4.35) 17 (42.50) 9 (22.50)Total 40 40 46∗∗∗(100.00) 40 (100.00) 40 (100.00)

Source: Survey of non-members.Notes: Figures in parenthesis indicate percentages.

∗ Open-ended questions.∗∗ For the corresponding question, this option was not listed.∗∗∗ Some respondents chose multiple options. Hence, total is more than 40.

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Similarly, except for six persons (15 per cent), who did not respond to this ques-tion, others rated the food provided on the work site to be very good or good.None viewed it to be costly. As regards wage differentiation between membersand non-members, of the 30 who replied to this question, only 13 per centthought that it was not justified. The rest said that it was justified on account ofskill and responsibility. Eighty-five per cent respondents felt that there was noneed for a trade union. This is quite surprising as in Kerala unionization is quitewidespread. Table 6 gives information about action taken in case of indiscipline.Suspension from work for a few days is the main form of disciplinary action.

Table 6Remedial Action in Case of Indiscipline in the ULCCS

Number of RespondentsAction (% )

No action 8 (20.00)Suspension for a few days 10 (25.00)Put to quarry work 5 (12.50)Put to other hard labour 1 (2.50)Wage differentiation 4 (10.00)Other action 0 (0)No/unclear response 12 (30.00)Total 40 (100.00)

Source: Survey of non-members.

As regards issuance of non-members’ cards that regularizes ‘non-memberworker’ status, on the average this was done after 1.05 weeks of beginning work.But as regards when they expect to become members, 80 per cent either did notrespond or said that they had no idea.54 This implies that there are no set pro-cedures for granting membership. However, of the 10 who responded to thequestion regarding the basis on which membership is granted, only one saidthat it was on the basis of ‘contacts’. Others said it was on the basis of work ef-ficiency or the like.

Only two respondents said that there is corruption in the organization andtwo others did not respond to this question. The rest (90 per cent) said there wasno corruption. Table 7 gives non-members’ responses about who gets the profits.A majority believe that the profits are being used for workers or are being re-invested. None held the view that the president, other authorities or individualsare pocketing profits.55

The survey of non-members confirmed the picture of the ULCCS thatemerged from its reports and discussion with the leadership that it is a ‘coopera-tive’ and not a private enterprise masquerading as a cooperative.




Table 7Who Gets the Profits that the ULCCS Makes

Number of Respondents(% of Respondents)

Workers 19 (47.50)Next generation 6 (15.00)Members 2 (5.00)No idea 4 (10.00)No/unclear response 9 (22.50)Total 40 (100.00)

Source: Survey of non-members.

SOME WEAK SPOTS

As pointed out, the ULCCS’ functioning is quite participatory. But participationis limited to members alone, who constitute 20 to 25 per cent of active workforce.Non-members get many benefits that may not be available with other contractors,but they do not participate in the management. Membership, the leadership says,is granted to those who are not only skilled enough to undertake all kind ofworks—construction of roads, bridges and buildings—but also have leadershipskills and are socially acceptable. However, there is no formal criterion for grantingmembership to non-members, say after a certain time or on reaching a verifiablebenchmark. Granting of membership can be quite arbitrary and restricted.56

Second, from the perspective of decentralized and small-scale development, itsexpansion rather than replication is worrisome.

Also disconcerting are its future plans. It plans to construct ‘dream homes’—rather than economical or ecologically sound homes—all over Kerala. This iselitist and promotes consumerism. But it is disconcerting not only because ofthat, but also for more mundane reasons. Till now it has been constructing roads,bridges and school buildings. In all these cases there is not much variety inmaterial used or construction quality, but the construction of ‘dream homes’will change that, and with greater variety in purchases and construction quality,it becomes difficult to keep a check and chances of corruption increase. This isparticularly worrisome because it is already being felt that one of the challengesthat the ULCCS is facing is ‘orienting new workers to its work culture’. 57

CONCLUSION

However, these weak spots should not cloud its impressive track record. TheULCCS is fairly big and successful. It is creating 0.25 million person-days of




employment for about 1,125 persons and they are earning Rs. 41.2 million in ayear for themselves. This study has affirmed its member-controlled characterand worker-friendly measures include fairly narrow spread in wages, bonus,food and accommodation at the work site, payment of all expenses in case ofaccidents along with half wages during the period of recuperation, daily partpayment of wages and a weekly off. All this has been achieved without any regular/special subsidy. Moreover, it has survived and progressed over 80 years and acrossthree to four generations. So, it is not a flash in the pan. This indicates that in ascenario where data on cooperatives in general and labour cooperatives in par-ticular is suspect and one does not know how many of the 29,000 labour co-operatives in India (Prasad 2001) are really cooperatives, the ULCCS does indicatethat many more are possible than are there already.

Rajinder Chaudhary is Reader, Department of Economics, M.D. University, Rohtak,Haryana 124 001. E-mail: [email protected].

Notes

1. See http://www.labcofed.com/about.htm, accessed on 7 January 2005.2. The present study is part of a larger one to document self-reliant and member-

controlled cooperatives of long standing. One of the organizations studied was LijjatPapad. Though it is not registered as a cooperative, it claims to be ‘a unique organ-ization of the woman, by the woman, for the woman’. However, Chaudhary (2005a)shows that this claim is not borne out by facts and it is not really a cooperative enter-prise. Other cooperatives studied include an unprocessed (without packaging orpasteurization) milk cooperative from Wardha, Maharashtra, and Apna Bazar, a con-sumer cooperative from Mumbai (Chaudhary 2005b, 2005c). Other organizationsproposed to be covered include a fishing cooperative of displaced tribals from MadhyaPardesh.

3. Its headquarter is at Madappally, Vatakara, Kozhikode.4. This author had the opportunity to witness its 80th anniversary celebrations and

interact with persons from diverse background. There was participation from allshades of political opinion. It appeared to be a joint celebration of the village/arearather than just an organizational function. It was organized on a big scale over twodays and feast had been arranged for about 6,000 people. This was the first time thatan anniversary was being celebrated by the organization. So modest has been itspublic profile.

5. Rajagopalan (1996), in a three-volume study on cooperatives, has no mention of thiscooperative. Similarly, the ISID online database of about 100 Indian social sciencejournals also has no material on it. Cf. http://www.isid.org.in accessed on 8 February2005.

6. The KSSP is a people’s science organization of very long standing.




7. The questionnaire was framed in English and then translated to Malayalam, whichin turn was vetted by an economist. Questionnaires were processed with the help oftranslators. The survey was conducted in February 2005.

8. The language barrier did not allow a larger survey. As the study was not funded andwas managed on personal resources, one could not hire professional interpreters/translators.

9. Some of the respondents were assisted by their fellow workers/members inresponding to the questionnaire. This may have brought on some peer pressure.

10. It started athmavaidya sanghams, which emphasized the need to ‘know thyself ’ as ‘allsouls are equal’. Thus, it was against caste hierarchy. For details of this movement,see Kurup (1988).

11. Uralungal was the name of this area at that time.12. The other two initiatives were the starting of a bank and a school. All three organ-

izations have survived in various forms, but the ULCCS is the most successful andclosest to the original spirit.

13. The turnover measures the total contracted value of all those projects whose financialaccount is closed in the current year, that is, it indicates total value of all the projectsfor which final payment has been made or received in a particular year. This is ir-respective of when the project was physically completed. In that sense, turnover isnot indicative of annual performance. Turnover is also called value of jobs undertakenin the ULCCS documents.

14. Bijeesh (2003) gives profit figures for 1955–56 to 2001–2. It shows that up to 1968–69profits were less than Rs. 10,000 per annum. Thereafter they went up, but continuedto be less than Rs.15,000. From 1988–89 to 1995–96, there were losses, which peakedin 1993–94, when the ULCCS incurred loss of more than Rs. 1.2 million. After1995–96 it has been making profit again. It may be mentioned that there is somediscrepancy between graphs given in government of Kerala (1999) and detailed datain Bijeesh (2003).

15. Details of estimation are given in the section Performance.16. Now even technical staff are being enrolled as members because the ULCCS is free

to enrol members but to engage regular employees it has to get permission and ap-proval of the State Cooperative Department, which can be quite cumbersome.

17. However, the survey of non-members showed that in February 2005 all non-members were also being employed daily.

18. Application form for non-members has a column for particulars of the person recom-mending the case. So, obviously, not everyone volunteering is taken.

19. Meeting of all workers, inclusive of non-members, is called only once in a whileand has no statutory backing.

20. Formal provisions are different. In terms of formal provisions only two meetings amonth and decisions by majority are required. In actual practice, as mentioned earlier,it is claimed to be much more participatory.

21. These two units have a ready market and marketing of their produce is not a problem.22. Comparing the working of two cooperatives in Maharashtra and Kerala each, it ap-

pears that the Kerala government exercises greater control over operational matters.23. This is usually in terms of certain percentage points above or below the estimates of

cost made by the body floating the tender.




24. It claims to have no specific set of external advisers, but taps outside technical expertsas and when required.

25. Besides leaders, those workers who did not go for work on that day without priorinformation also come to the office in the evening to enquire about next day’s workschedule.

26. Certain office employees, directors and site leaders who have to put in extra even-ing hours are paid an allowance for this. We will come back to it when we discussremuneration.

27. Even though by-laws provide for subcontacting to a group of members, this is notdone.

28. On visit to a site one found that the plastering of a drain was being done by ‘Tamillabour’ on contract. Similar arrangement had been made for breaking of stones.

29. Both these aspects—putting reliable old hands on key tasks and operating throughlong-lasting relationships—appear to be a common business practice. Apna Bazarand Go-rus Bhandar, Wardha, too make purchases through few big traders of thetown and the relationship has continued for years (Chaudhary 2005b, 2005c).

30. Schedule of rates notified by the Public Works Department, Government of Kerala,w.e.f. 1 December 2004 has two distinct categories, ‘Man Mazdoor’ and ‘WomanMazdoor’, who respectively get Rs. 110 and Rs. 90.

31. In addition to wage discrimination, during site visits it was found that the traditionalwork division along gender lines is also practised. Women were carrying head loadsand men were manning the machines or pouring materials into buckets, etc.

32. This practice of having a food allowance is a carry-over from its early days whengetting enough food was the main consideration for workers. Moreover, at thattime there were periods when wages could not be disbursed regularly, so at leastfood was provided. While workers today are not so poor as to be starving, yet thepractice of food allowance continues. In fact, cooked food—morning snack, tea,lunch and afternoon snack—is provided on the work site. For this, the organizationprovides cooks and other infrastructure, but running expenses are shared amongstworkers out of their food allowance. These expenses come to Rs. 5 to 7 per day.

33. It may be mentioned that directors get wages only for actual days of work put in.34. Initially workers and directors were paid the same wages. Travel allowance was intro-

duced only in 1951. Prior to that only actual travel costs were paid.35. A daily wage bill is prepared, which facilitates such daily payment.36. For marriage of males the allowance is Rs. 1,000 and in case of females it is 8 grams

of gold.37. Additionally, for members, in case of major illness like cancer or heart trouble, the

ULCCS makes some contribution towards their treatment.38. By this medical insurance, actually the ULCCS reduces its own risk, as it is com-

mitted to provide medical aid for on-site accidents.39. Cf. GO (MS) 135/97/Co-op dated 13 November 1997 of Cooperation Department,

Govern-ment of Kerala. Some of these benefits date from 1965 and many of thesebenefits are as per the recommendations of the National Advisory Council of LabourCoopera-tives. The states of Haryana, Punjab, Maharashtra and Himachal Pradeshalso provide some of these benefits (Prasad 2001).

40. However, government policy in this regard keeps changing. Earlier, even if the quotedprice of the cooperative was higher by more than 10 per cent over lowest bidder, at MAHARSHI DAYANAND UNIV on March 1, 2012irm.sagepub.comDownloaded from



cooperatives were to be asked if they were willing to do it at a 10 per cent higher price.Thereafter, the provision was changed and cooperatives were to be given work iftheir quoted price was up to 10 per cent higher. The ULCCS has challenged thisamendment in court.

41. In spite of repeated requests, one could not get required aggregate information.This is perhaps on account of the fact that only one person in the office, who other-wise too is quite overworked, can confidently communicate in English. Others,even if they understood English, were not comfortable with it. Another reason couldbe that their accounting is ‘project’ focused. Emphasis is on keeping separate accountsof each job/project rather than on aggregate accounts. Yet another possibility couldbe that the ULCCS has something to hide and hence is not giving this information.But there appears to be no plausible reason for hiding this information.

42. In calculating this average, only those who worked in a particular month have beentaken into account and not all listed members. Moreover, it may be mentioned thatthe figures are inclusive of overtime payment for work on Sundays and holidays forwhich payment is double the normal rate. Hence, there is likely to be an element ofoverestimation.

43. Data for actual number of workdays put in by non-member workers during thesemonths could not be figured out.

44. It may be mentioned that payments to the president, directors as well as overtimepayments are included in this list.

45. However, the ULCCS reports put it at 0.3 million workdays. Making allowancesfor some overestimation by the organization, our estimates do not appear to be offthe mark.

46. One is aware of the fact that these meetings could also act as just rubber-stampingforums, but the language barrier did not allow a closer investigation.

47. It should be useful to meet such people and hear their side of the story.48. As against this, in the case of Lijjat Papad, the executive committee can straightaway

remove a member or even the president (Chaudhary 2005a).49. Table 2 gives a brief profile of members.50. Only 18 people responded to this question.51. All reported getting work for all six days, with Sunday off.52. As the questionnaire could not be pre-tested, the questions could not be fine-tuned.53. This was also the general refrain in some of the other cooperatives studied

(Chaudhary 2005a, 2005b, 2005c).54. The other eight people expected to become members on the average in 2.5 years.55. Surprisingly, even though the ULCCS had mobilized deposits worth Rs. 262.6 mil-

lion in 2003–4, none of the surveyed workers had any deposits with it. Does itindicate that these non-member workers have a hand-to-mouth existence and donot have significant savings? This needs further investigation.

56. In fact, it was pointed out that in 1974, for A-class classification, a labour cooperativewas required to have at least 200 members, but the ULCCS at that time had only82 members. To meet this requirement, membership was expanded. The case of afresh milk cooperative in Wardha was similar, where membership expansion tookplace to meet statutory requirements and not as a normal expansion (Chaudhary2005b). This indicates that grant of membership can be quite arbitrary and restricted.




57. Amongst other problems faced are delayed government payments and non-revisionof PWD rates over long period. As a result of this non-tendered works of panchayatiraj bodies are not profitable.

References

Bijeesh, M. 2003. ‘Uralungal Labour Contract Co-operative Society: A Historical Study’,project report for MA. Kozhikode, Kerala: University of Calicut.

Chaudhary, Rajinder. 2005a. ‘Lijjat and Women’s Empowerment: Beyond the Obvious’,Economic and Political Weekly, Vol. XL, no. 6, 5 February.

———. 2005b. ‘Milk Cooperative with a Difference’, mimeograph. Rohtak: Departmentof Economics, MD University.

———. 2005c. ‘From a PDS Outlet to a Retail Chain: Apna Bazar Cooperative’, mimeo-graph. Rohtak: Department of Economics, MD University.

Government of Kerala. 1999. State Seminar on Labour Contract Societies (in Malayalam).Kozhikode Kerala: Panchayathi Raj Department.

Kuniyil, Lisy Vannathy Vayal. 2003. ‘Labour Contract Co-operative Societies—Problemsand Prospects: A Case Study of Uralungal Labour Contract Society’, project reportfor MA in econometrics. Mahe: Pondicherry University.

Kurup, K.K.N. 1988. Modern Kerala: Studies in Social and Agrarian Relations. Delhi: MittalPublications.

National Cooperative Union of India (NCUI). 2004. Indian Cooperative Movement:A Profile, 2004. New Delhi: NCUI.

Prasad, Bhagwati. 2001. ‘Labour Contracting Cooperatives and Employment Generation’,Cooperator, 38 (7).

Rajagopalan, R. 1996. Rediscovering Co-operation (in three volumes). Anand: Institute ofRural Management Anand.

ULCCS. no date. A Co-operative Success Story. Vatakra, Kozhikode, Kerala: ULCCS.



The ULCCSAn 80YearOld Construction Labour Cooperative

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