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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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).
The Code on Wages, 2019
- About: It regulates the wages and bonus payments in all employment areas where any industry, trade, business, or manufacturing is being carried out.
- Subsumes different labour laws: The bill subsumes the following four labour laws:
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
- Key Provisions:
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- Universal Minimum Wages: Ensures minimum wages and timely payment for all employees, regardless of sector or wage ceiling.
- Right to Sustenance: Aims to guarantee the “Right to Sustenance” for every worker.
- Legislative Protection: Intends to enhance legislative protection of minimum wages.
The Industrial Relations Code 2020
- About: The Industrial Relations Code 2020 provides a broader framework to protect the rights of workers to make unions, reduce the friction between employers, and workers and provide regulations for the settlement of industrial disputes.
- Subsumed different laws: The Code has been introduced in order to amalgamate, simplify and subsume the following 3 central labour acts under one Code:
- The Trade Unions Act, 1926
- The Industrial Employment (Standing Orders) Act, 1946
- The Industrial Disputes Act, 1947
- Key Provisions:
- Definition for “Fixed Term Employment”: The IR Code introduces a new provision for “fixed term employment” which means and refers to the engagement of a worker on the basis of a written contract of employment for a fixed period.
- Worker Re-skilling Fund: The IR Code introduces provisions for re-skilling of workers for the first time for those workers who have been laid-off so that they are able to secure employment again.
- Constitution of Work Committee: An Industrial Establishment having or employed 100 or more workers during 12 months, may be required to constitute a Work Committee to promote protective measures for securing and preserving sensible relations between the employer and workers.
- Grievance Redressal Committee: An Industrial Establishment having 20 or more workers shall constitute one or more Grievance Redressal Committees with a maximum of 10 members for resolution of disputes arising out of individual grievances
The Code on Social Security, 2020
- Proposed National Social Security Board: A proposed National Social Security Board will recommend suitable schemes for various sections of unorganised workers, gig workers, and platform workers to the central government.
- Aggregator Contributions for Gig Workers: Aggregators employing gig workers will have to contribute 1-2% of their annual turnover for social security, with the total contribution not exceeding 5% of the amount payable by the aggregator to gig and platform workers.
The Occupational Safety Health and working Conditions Code, 2020
- About: The Occupational Safety, Health And Working Conditions Code, 2020 is a code to consolidate and amend the laws regulating the Occupational safety and health and working conditions of the persons employed in an establishment. The Act replaces 13 old central labour laws.
- Defined Inter-State Migrant Workers: It has defined inter-state migrant workers as the worker who has come on their own from one state and obtained employment in another state, earning up to Rs. 18,000 a month.
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July 12, 2024