Centre Begins Efforts To Implement Labour Codes

The Union Labour Ministry has started efforts to implement the four Labour Codes, which were passed by the Parliament in 2019 and 2020. 

• The implementation of the four Labour Codes could improve the “ease of doing business” scenario in the country.

Background

• “Labour” is listed in Concurrent List: “Labour” as a subject is listed in the Concurrent List of the Constitution of India.
  • Therefore, both Parliament and state legislatures can make laws regulating labour.  
• Enactment of Labour Codes: The Government has enacted the four Labour Codes, namely, the Code on Wages, 2019; the Industrial Relations Code, 2020 (IR Code); the Code on Social Security, 2020 (SS Code) and the Occupational Safety, Heath and Working Conditions Code, 2020 (OSH Code).
• Consultation with various stakeholders: The Central Government has pre-published the draft Rules for the four Labour Codes and has invited comments from all stakeholders.

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Status of Labour Codes Implementation

• Pending Operationalisation
  • Codes have passed in both Houses but are not yet operational.
  • Delay attributed to objections from trade unions.
• State-Level Rule Framing
  • Centre claims some States are yet to frame the rules.
  • The Centre had said it was helping those States which could not draft the rules to complete the process.
• Trade Union Opposition: Central Trade Unions (CTUs) oppose the implementation of the codes by citing concerns of potential curtailment of trade union rights and reduction in social security measures for workers.

Benefits of Labour Codes Implementation

• Flexibility in Hiring
  • Companies can hire workers on fixed-term contracts.
  • Allows greater flexibility in adjusting workforce according to business needs.
  • Record-Keeping Requirements
• Simplifies the process for companies to maintain detailed records of workers.
  • Includes records of wages, working hours, and other benefits.
• Standardised Definitions
  • Many definitions across the new codes are standardised.
  • Reduces ambiguity in interpretation and application of the codes.
• Greater protection to Workers: The new codes will provide greater protection and benefits for workers, including provisions for minimum wages, social security benefits, and grievance redressal mechanisms. 
  • The codes will also provide for a new social security net for workers, including insurance and pension benefits.
• Impact on HR technology: Companies will need to adopt new HR technologies to manage their workforce and comply with the new labour codes.
  • The new labour codes may also lead to the development of new HR technologies that can help companies manage their workforce more effectively.

Reasons For The Opposition From The Trade Union

• Curtailment of Rights: Concerns cited include potential curtailment of trade union rights and reduction in social security measures for workers.
• Concerns Over Specific Codes: 
  • Industrial Relations Code and Occupational Safety and Health (OSH) Code contain many anti-worker provisions that need to be changed.
  • The OSH Code advances safety and health concerns for workers, but the threshold limits prescribed restrict the benefits.
• Social Security Concerns: State policies and laws on social security lack specific provisions for migrant and unorganised workers.
  • Current social security legislation fails to adequately protect these workers.
  • Migrant workers crossing State borders and those employed outside India face similar deprivation of protection under social security laws and schemes.
• Fears of worsening of living standards: Implementation of the four Labour Codes is expected to worsen the living standards of workers.

Suggestions

• Convening the Indian Labour Conference (ILC): Several trade union leaders are urging the Centre to convene the Indian Labour Conference immediately instead of meeting Central Trade Unions (CTUs) individually.
  • The ILC, a tripartite forum of workers, government, and employers, has been held just once in the last 10 years.

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