New Version of Labour Codes

RIGHTS / GOVERNANCE

Topic: General Studies 2:

• Fundamental Rights
• Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

New Version of Labour Codes

Context: The government has introduced new versions of three labour codes in Lok Sabha which are

1. Industrial Relations Code Bill, 2020
2. Code on Social Security Bill, 2020 
3. Occupational Safety, Health and Working Conditions Code Bill, 2020

Do You Know?

• These three bills have been re-introduced after incorporating 174 out of 233 recommendations given by Standing Committees
• These three bills are part of four labour code envisaged incorporating 29 labour laws. First code on wages has already been enacted.

What are the key proposals?

In the Industrial Relations Code Bill, 2020, the government has proposed to 

• New conditions for legal strike – no person employed in an industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal and sixty days after the conclusion of such proceedings. Earlier such restrictions applied only to public utility services.
• Raised the threshold for requirement of a standing order — rules of conduct for workmen employed in industrial establishments — from the existing 100 to 300 workers
• Reskilling Fund – To set up a re-skilling fund for training of retrenched workers with contribution of the employer of an amount equal to 15 days last drawn by the worker.

The Social Security Code has following provisions 

• National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers
• No more ambiguities: The bill has defined various terms like “career centre”, “aggregator”, “gig worker”, “platform worker”, “wage ceiling” , etc.
• Social security for gig workers: Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security of workers

The Occupational Safety, Health and Working Conditions Code has the following objectives

• To employ women in all establishments for all types of work. They can also work at night, that is, beyond 7 PM and before 6 AM subject to the conditions relating to safety, holiday, working hours and their consent
• To Promote Formalisation: Issuing of appointment letter mandatorily by the employer of an establishment to promote formalisation in employment
• Inclusion of inter-state migrant workers in the definition of worker: Inter-state migrant workers are defined as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month. 
• The proposed definition makes a distinction from the present definition of only contractual employment.
• Portability Benefits: An Inter-State Migrant Worker has been provided with the portability to avail benefits in the destination State in respect of ration and availing benefits of building and other construction worker cess
• However, the Code has dropped the earlier provision for temporary accommodation for workers near worksites. 
• It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment

What are the 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.

Conclusion

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.

Connecting the dots:

• Land Reforms
• Reforms required in Judiciary