“This mad rush for wealth must cease and the labourer must be assured not only of a living wage but also a daily task that is not mere drudgery.” – Mahatma Gandhi
Labour is the keystone for production; in fact, we cannot think of production or industries without labour. Even Mahatma Gandhi valued the labourers and asserted their dues. Yet, we see that they are one of the most vulnerable groups prone to poverty especially in emergencies like the Covid-19 pandemic. The pandemic made the plight of the workers discernible. A cover of social security & formalisation of the workforce now seems something which cannot be put on hold for long if India wants to achieve its ambitious developmental goals. It is not that nothing has been done for their security and welfare, rather ‘Labour’ being a subject under Concurrent list, around 44 Labour laws under the purview of central government and above 100 laws under the state governments existed till 1st April 2021 (Before the enforcement of the three codes). The hitherto existing Labour codes led to fragmentation and complications, which defeated the very purpose of these laws. On the other hand, the industries and firms (which usually try to employ labour cost-cutting measures to maximize their profit) have also not been in a good condition in the recent past. Hence, striking a correct balance between these two driving forces of the economy is important. Amidst these circumstances, the New Labour codes have brought new hope.
In September 2020, the parliament passed three labour codes subsuming 29 labour codes. The Industrial Relations Code, Code on Occupational Safety, Health & Working Conditions and Social Security Code along with the Codes on Wages passed in 2019 propose to simplify the country’s archaic labour laws and give impetus to economic activity without compromising with the workers' benefits at the same time. These labour codes can have a revolutionary impact on labour relations in India. Along with the Codes on Wages Act 2019, these can significantly ease the conduct of business by amalgamating several Central and State laws on labour. While responding to the debates on these codes in Parliament, Minister of State for Labour & Employment (Independent Charge), Shri Santosh Gangwar stated that the three Codes will prove to be a game-changer in the labour welfare reforms covering more than 50 crores organised and unorganized workers in the country. This also includes gig workers and also opens up the doors for social security to those in the self-employment sector. The minister also hailed the slogan “Shrameva Jayate”. But before we arrive at a particular conclusion, there is a need to analyse these laws thoroughly.
What do these laws really offer?
The Industrial Relations Code, among its important provisions, makes it easier for companies to hire and fire workers. Companies employing up to 300 workers will not be required to make rules of conduct for workmen employed in industrial establishments. In the current scenario, firms must employ up to 100 workers. The code also says that workers in factories will have to give notice at least 14 days before employers go on strike. Presently, only workers in public utility services are required to give the notice to hold strikes. Besides, every industrial establishment employing 20 or more workers will have one or more Grievance Redressal Committee for resolution of disputes arising out of employees’ grievances. Most importantly the code also proposes setting up a reskilling fund to help skill retrenched workers to regain the lost skills or evolving new skills with time.
Occupational Safety, Health and Working Conditions Code spells out the duties of employers and employees and incorporates safety standards for different sectors, focusing on the health and working conditions of workers, hours of work, leaves etc. This code also gives recognition to the rights of contractual workers. It provides employees with the flexibility to employ workers on a fixed term based on requirement and without restriction in any sector. More importantly, it also provides for statutory benefits like Social Security and wages to fixed-term employees at par with their permanent counterparts. It restricts the number of working hours in any establishment to not more than 8 hours a day or more than six days a week. In the case of overtime, the employees should be paid twice the rate of his/her wage. It will apply to even small establishments, which have up to 10 workers. The code also seems to emphasize gender equality and empowerment of the woman workforce. Women will be eligible to be employed in all establishments for all types of work and with consent can work before 6:00 AM and beyond 7:00 PM subject to such conditions relating to safety holidays and working hours. For the first time, the Labour Code also recognises the rights of the trans genders. It makes it mandatory for industrial establishments to provide washrooms, bathing places and locker rooms for male, female and transgender employees.
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| Source- Unsplash By- Safal Karki |
The code on security replaces 9 Social Security laws, including the maternity benefit act, employees provident fund act, employees’ pension scheme, employees’ compensation act etc. The code universalizes Social Security coverage to those working in the unorganised sector such as migrant workers, gig workers and platform workers. For the first time, provisions of Social Security will also be extended to agricultural workers. The code also reduces the time limit for receiving gratuity payment by changing it from the continuous service of five years to one year for all kinds of employees, including fixed-term employees, contract labour, daily and monthly wage workers.
These codes are no doubt beneficial in many ways. They will consolidate and simplify the Labour laws and will increase ease of doing business or it will reduce multiplicity of definition and multiplicity of authority for business. Besides, the codes provide for a single licensing mechanism. It will give respite to industries by ushering in substantive reforms in the licensing mechanism as earlier, industries had to apply for their license under different laws. The codes also simplified archaic laws dealing with industrial disputes and reform the adjudication process, which will pave the way for the early resolution of disputes. According to the industry and some economists, such reform shall boost investment and increase the competence of India in the global market. It drastically reduces complexity and internal contradictions, increases flexibility and modernises regulations on safety /working conditions. Most importantly these codes are inclusive given the new opportunities for women and transgender people. The three codes will encourage fixed-term employment, reduce the influence of trade unions and expand the Social Security net for informal sector workers.
But these Labour codes are not free from concerns and questions. The major problems have been observed in the first two codes. The provision giving the liberty to industrial establishments to hire and fire their employees at will is considered to be against the interests of employees. This move might give free hand to the companies to introduce arbitrary service conditions for workers. The provision that workers in factories will have to give notice at least 14 days in advance if they want to go on a strike (despite the recommendations of the Standing committee on Labour against the expansion of the required notice for a strike beyond the public utility services like water, electricity, natural gas, telephone and other essential services) has also led to raised brows of trade unions and labour representatives. Furthermore, Bhartiya Mazdoor Sangh has also opposed the code describing it as a clear attempt to diminish the role of trade unions.
Despite the pathetic condition of Labour and industries in the Covid-19 situation, the new laws can, for sure, pave a way out of uncertainty, create incentives for workforce formalisation, simplify compliance, increase ease of doing business and absorb out the migration of labour from agriculture. But the questions raised by labour representatives and trade unions need to be addressed too.
Moreover, the biggest question that looms large every time on every scheme and policy is of ‘implementation’. The government, in addition to these codes, needs to create a mechanism to ensure its effective implementation, particularly in the infant stage. The first step in the direction of effective implementation will be to create awareness regarding these laws amongst the stakeholders and target groups as it is crucial for them to know about their rights and laws to assert these, as and when needed. This way, India will be able to not only capitalize on its inherent labour and skill cost and have a fast economic recovery but also ensure social security of the most vulnerable groups which emerged during the pandemic.
BY SHASHI KUNDU
Sources:
www.pib.gov.in
TheHindustanTimes:https://www.hindustantimes.com/india-news/understanding-the-new-labour-codes/story-llI015EZK8EYtDHmP9SXVP.html
The Big Picture: https://youtu.be/bBdQLloDm5Q
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