Decoding the labour Codes

ECONOMY/ GOVERNANCE/ RIGHTS

Topic: General Studies 2,3:

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

Decoding the labour Codes

Context: Government coming up with new version of three labour codes

Three guiding principles that has primarily driven Labour Policymaking journey—

1. Creation of formal jobs needs formal employers
2. We do not have a jobs problem but a wage problem
3. We need labour laws, but fewer laws, which are pro-labour and pro-employer.

Do You Know?

• Before the four labour Codes got the final nod, India had 463 Acts, 32,542 compliances and 3,048 filings. 
• Post the Parliament assent, 463 Acts have been reduced to 434 Acts, as 29 of the 44 Central Labour Laws have been subsumed in the four Codes.

The broad benefits of the four Codes for employers and candidates/employees.

Employers can find relief in the following: 

• Eases Procedures: The Codes are for simplification, and rationalisation. Provision of one licence/one registration and one return will save time, resources and efforts of the establishment.
• Reduction in cost of compliance: Web-based electronic labour inspectors/facilitators shall, before initiation of prosecution proceedings, give an opportunity to the employer to comply with the provisions of the Codes. 
• Legitimisation of fixed-term employment enables transparency: Clear role definitions in contract labour, clear criteria of eligibility of contractors, national licensing of contractors help create a win-win tripartite employment relationship.
• Benefits for incumbent job seekers: Some of the overarching benefits include the attempt to encompass a large cross-section of workforce, beyond those in the organised sector, and provide them with protection under the labour laws through outreach schemes, specifically for the informal and unorganised sectors.
• Benefits for Gig workers: Acknowledgement of gig work and gig platforms and the provisions to safeguard those who pick up gig assignments shall encourage many workers and aspirants to consider it as an alternate option for livelihood given the uncertainty around us. 
• Safeguards Contractual Job: The change in the provision of contract labour where contract labourers need to be paid on a par with anyone doing the same job in a regular role makes it a win-win proposition for anyone opting for a contractual job.
• Boosts Investor Sentiment: All these simplification of rules facilitates improvement in the ease of doing business, which further helps in attracting foreign investment

Way Ahead

We have to shift our focus now towards

• State-specific labour reforms
• Fine-tuning further the existing codes which give us the impression of on-paper subsumption of existing acts with little change from the past
• Rulemaking, which is the actual litmus test of rationalisation of the codes
• Complete digitisation of compliances
• Democratising employment and labour data