QUESTION : Discuss the significance of labour laws in the Industrial growth of India.
Topic- CODE DEBATE
- New Version of Labour Codes
WHY IN NEWS ?
- The three codes aimed at consolidating diverse labour laws and ushering in reforms fall in this category. The codes were passed in both Houses after a limited debate and in the absence of the Opposition.
IMPORTANT PROPOSALS IN THE 3 LABOUR CODES :
1) Industrial Relations Code Bill 2020
- The code, among its important provisions, makes it easier for companies to hire and fire workers.
- Companies employing upto 300 workers will not be required to frame rules of conduct for workmen employed in industrial establishments. Presently, it is compulsory for firms employing upto 100 workers.
- It proposes that workers in factories will have to give a notice at least 14 days in advance to employers if they want to go on strike.
- Besides, every industrial establishment employing 20 or more workers will have one or more Grievance Redressal Committees for resolution of disputes arising out of employees’ grievances.
- The code also proposes setting up of a reskilling fund to help skill retrenched workers.
2) Occupational Safety, Health and Working Conditions Code Bill, 2020
- It spells out duties of employers and employees, and envisages safety standards for different sectors, focusing on the health and working condition of workers, hours of work, leaves, etc.
- The code also recognises the right of contractual workers.
- The code provides employers the flexibility to employ workers on a fixed-term basis, on the basis of requirement and without restriction in any sector.
- It also mandates that no worker will be allowed to work in any establishment for more than 8 hours a day or more than 6 days in a week.
- In case of an overtime, an employee should be paid twice the rate of his/her wage. It will be applicable to even small establishments, which have upto 10 workers.
- The code also brings in gender equality and empowers the women workforce. Women will be entitled to be employed in all establishments for all types of work and, with consent can work before 6 am and beyond 7 pm subject to such conditions relating to safety, holidays and working hours.
- For the first time, the labour code also recognises the rights of transgenders. It makes it mandatory for industrial establishments to provide washrooms, bathing places and locker rooms for male, female and transgender employees.
3) Code on Social Security Bill, 2020
- This will replace nine social security laws, including Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme, Employees’ Compensation Act, among others.
- 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 also.
- The code also reduces the time limit for receiving gratuity payment 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.
BENEFITS OF LABOUR CODES :
Consolidation and simplification of the Complex laws:
- The three Codes simplify labour laws by subsuming 25 central labour laws that have been on the table for at least 17 years.
- It will provide a big boost to industry & employment and will reduce multiplicity of definition and multiplicity of authority for businesses.
Single Licensing Mechanism:
- The codes provide for a single licensing mechanism. It will give fillip to industries by ushering in substantive reform in the licensing mechanism. Currently, industries have to apply for their licence under different laws.
Easier Dispute resolution:
- The codes also simplify archaic laws dealing with industrial disputes and revamp the adjudication process, which will pave the way for early resolution of disputes.
Ease of Doing Business:
- According to the industryand some economists such reform shall boost investment and improve ease of doing business. It drastically reduces complexity and internal contradictions, increases flexibility & modernizes regulations on safety/working conditions.
- Other benefits for Labour: The three codes will promote fixed term employment, reduce influence of trade unions and expand the social security net for informal sector workers.
CONCERNS RAISED OVER THE NEW LABOUR CODES :
- Dilutes rights of Workers:
- Workers in small establishments (with up to 300 workers) will have their rights watered down with no protection of trade unions, labour laws.
- Workers safety safeguards diluted:
- The new rules will enable companies to introduce arbitrary service conditions for workers.
- Corporate Friendly:
- The new rules provides more flexibility to employers for hiring and firing workers without government permission.
- Restricts Freedom of Speech:
- Restrictions on strikes and demonstrations is akin to assault on the freedom of industrial actions.
- Ambiguity about reskilling Fund:
- The Code lacks clarity on the substantive and procedural aspects of reskilling Fund which will fizzle out like the National Renewal Fund in the 1990s
- Women’s Safety:
- Allowing women to work during night time inspite of various safeguards imposed may increase their vulnerability to sexual abuse.
EXISTING LABOUR CODES :
- The social security code replaces nine laws on social security, including the Employees’ Provident Fund Act, 1952, and the Maternity Benefit Act, 1961.
- Industrial Relations Code subsumes the Industrial Disputes Act, 1974, the Trade Unions Act, 1926; and Industrial Employment (Standing Orders) Act, 1946.
- The Occupational Safety, Health and Working Conditions Code replaces 13 labour laws.
- In the changed economic scenario post COVID-19 pandemic, the government has to balance the rights of workers and economic recovery. Favouring one over the other will impact the Country’s prospects in long run.