This article is a brief analysis of the recent labour reform legislations. If the consolidation of previous legislations and modernizing them is a novel idea then why there is so much opposition to these laws?
The very controversial Labour Code Bills were passed by the Parliament of India in September 2020. These bills consolidated previous 29 legislations. One of the four bills is the Wages Act, which was passed in 2019. The other three bills were sent to the standing committee for consideration. This year the three Labour Reform Bills were presented by the Labour Minister Santosh Gangwar. Throwing light on the main contention behind bringing these reform bills on the parliamentary floor, he said, “The purpose of labour reforms is to provide a transparent system to suit the changing business environment.” These legislations seem to be a very progressive step in the direction of labour reforms when viewed from the top. There were about 40 Central legislations and 100 State legislations on this subject. In this view, the consolidation of about 29 of these legislations into 3 bills is an achievement. The availability of a number of legislations had made labour laws a complex structure. But along with the consolidation process, it is also important to modernize our laws according to the changing needs. The Bill was passed amid the protests over Farm Bills due to which the opposition leaders did not participate in the passing of these bills. These three instrumental Bills for Labour Reforms were passed in just two hours. The legislation provides us with the path to development, and it makes it important to discuss and scrutinize these bills before passing them in the house. The question of political biases remains in the spotlight in lieu of this legislation and the previous works of the government.
The Bill is being criticized by labour unions as they claim it gives arbitrary powers to the employers and cuts the rights of the workers. The Bills which were passed in a couple of hours account for the rights of about 90% of the workforce of our country and to compromise on the rights of these many people for the benefit of a few is in gross violation of our democratic principles. It is alleged that the tripartite meetings that took place for the formulation of policies were biased towards the employers and therefore the Bill was tagged as an anti-labour Bill. This Bill has made it easier for employers to hire and fire their employees. Further, only some of the recommendations by the standing committee were taken into consideration. While the party in power is talking about the Bill being a major milestone achieved in securing the rights of fixed-term workers, the workers are at unease after the passing of this Act.
The three major Bills on labour reforms are ‘The Industrial Relation Code’, ‘The Code on Social Security’ and ‘The Occupational Safety, Health and Working Conditions Code’. These Bills were passed as Money Bills. They are an attempt to not only make the legislation concise but to modernize it. One of the most commendable aspects of these legislations is the use of the gender-neutral term ‘worker’ instead of workmen. The decision to make an attempt at making compact legislations on labour laws has opened the gates for making reforms in other sectors too. This will help in better implementation of the laws.
The first Bill is ‘The Industrial Relations Code’. It consolidates 3 previous legislations on this subject. The 2020 Bill has extended the lower-limit from 100 to 300 employees for the purposes of applicability of standing orders. Thereby, industrial establishments with more than 300 workers or more will have to comply with the rules stated in the schedule of the Act. Further, government permission for the purposes of closure, lay-off and retrenchment is mandated only in the establishments with more than 300 workers. The Bill has brought provisions to decrease the threshold to 51% for gaining the recognition as the sole negotiating union. The Bill specifically establishes the disputes relating to any termination of an individual worker as industrial disputes which will have their discourse in the industrial tribunal. This Bill has in façade of a Labour Reform Bill curtailed the workers’ right to strike. It has extended the provisions of giving notice at least before 14 days for going on a strike to all the industries which was previously restricted only to the public utility service industries. It has further included the time of 60 days for arbitration. After the notice is given, conciliation proceedings will start with immediate effect, and if the proceedings fail the issue will be moved for arbitration. This Bill has used certain vague terms which make it vulnerable to misuse and one of such is the mention of other funds in the provisions for the re-skilling fund in cases of lay-offs. This Bill has put more weight on the employers’ side and this will lead to deep insecurity among the workers.
The Second Bill is ‘The Code on Social Security’. This Bill has consolidated 9 previous legislations on this subject. This Bill has made it compulsory to form a social security fund for the establishments as notified by the Central Government. Another commendable aspect of this Bill has taken into consideration the changing trends in employment by including gig workers and platform workers for the purposes of framing of rules. The Central Government and State Governments are required to form the social security fund for all the workers in unorganized sectors. The National Social Security Board will protect the interests of gig workers and platform workers by recommending and reviewing the schemes. It further clarifies that contributions can be made by aggregators for funding schemes for the welfare of gig workers and platform workers. This Bill has removed previous provisions which enabled the review of previously taken decisions in cases of disputes. It has reduced the penalties for offences like obstruction of justice and unlawful deduction of wages. It has increased the representation of government officials in the board for unorganized workers.
The third Bill is ‘The Occupational Safety, Health and Working Conditions’. This Bill consolidates 13 previous legislations on the related subjects. The Bill has conferred power on the government to exclude any new establishments in order to encourage economic activities. It has increased the threshold for defining an establishment as a factory and for the establishments engaging contract workers. But it has included all the establishments irrespective of any number of workers engaged in the case of establishments dealing with hazardous works. The employment of contract workers is prohibited in the core sectors under the provisions of this Bill and the authority of appropriate government will prevail to decide which establishments come under the establishments carrying out the core activities. Another commendable aspect is the fixing of daily work hour limit to eight hours and not leave it on the onus of any government to fix the hours. Although this legislation has included women in all kinds of establishments, it has failed to provide more specific provision for the safety of these women workers. It has defined the inter-state workers for the purpose of availing advantages provided under this Bill. A portal will be maintained to record the necessary details of these migrant workers.
The Industrial Relation Bill confers powers on the Central Government to continue its jurisdiction upon the Public Sector Undertakings even when the government’s stake is less than 50%. In all the three Bills, instead of delegating the functions, the government retains the powers to increase the thresholds, power to exempt the establishments or any entitlements as mentioned in the Acts. The main bone of contention remains the exclusion of industries with the number of workers below the thresholds. This is an unfair practice as irrespective of the number of workers working in an establishment, every worker should be ensured the Fundamental Rights. It has left out many workers at the expense of their employers. The most arbitrary provision is the power given to the government to modify or reject any award which is awarded by the tribunal in which the government is a party to the dispute. The legislations have been limited to benefit a few when they could have been used to bring major reforms.
The legislations could have been formulated to ensure maximum workers are provided with the Fundamental Rights instead of focusing more on benefitting the establishments to flourish our economy. In the pandemic, these workers faced severe backlashes because of lack of any strict regulations to ensure their Fundamental Rights are not violated. The legislation is a powerful tool in the hands of government and it should be used judiciously. Many provisions of these Acts are biased against the workers but some provisions have been exemplary. The Bill was passed in questionable situations. It is being welcomed by some and criticized by some. As the Bill has been passed now, the government should acknowledge the criticism and amend those provisions which provide an unfair leverage to the employers. Further, the timely review of the policies should be done without any biases and thereby, the changes should be incorporated in the legislation. This legal reform can lead to a much needed larger social reform if the government takes the necessary steps in this direction.