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Centre’s Push for Labour Codes

Context:

With the rollout of the labour codes getting delayed due to the pandemic, renewed deliberations are underway at the highest levels of government on a fresh implementation schedule, amid divergent views on whether to push through all four codes simultaneously or opt for the more practical option of staggering them.

Relevance:

GS-II: Social Justice and Governance (Government Interventions and Policies, Issues arising out of the design and implementation of Government Policies), GS-III: Indian Economy (Human Resource)

Dimensions of the Article:

  1. Labour Codes
  2. Code on Wages Act, 2019
  3. Industrial Relations Code Bill 2020
  4. Occupational Safety, Health and Working Conditions Code Bill, 2020
  5. Code on Social Security Bill, 2020
  6. Concerns regarding the implementation of the codes (labour law reforms)

Labour Codes:

It includes 4 versions: 

  1. Code of Wages Act 2019,
  2. Industrial Relations Code Bill, 2020,
  3. Social Security Code Bill, 2020,
  4. Occupational Safety, Health and Working Conditions Code Bill, 2020

Code on Wages Act, 2019

  • The new wage code removes the multiplicity of wage definitions, which can significantly reduce litigation as well as compliance cost for employers.
  • It links minimum wage across the country to the skills of the employee and the place of employment.
  • It seeks to universalise the provisions of minimum wages and their timely payment to all employees irrespective of the sector and wage ceiling.
  • It seeks to ensure Right to Sustenance for every
  •  and intends to increase the legislative protection of minimum wage.
  • A National Floor Level Minimum Wage will be set by the Centre and will be revised every five years, while states will fix minimum wages for their regions, which cannot be lower than the floor wage.
  • It subsumes the following four labour laws:
    • Payment of Wages Act, 1936
    • Minimum Wages Act, 1948
    • Payment of Bonus Act, 1965
    • Equal Remuneration Act, 1976

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.
  • Presently, only workers in public utility services are required to give notices to hold strikes.
  • 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.

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.
  • More importantly, it also provides for statutory benefits like social security and wages to fixed-term employees at par with their permanent counterparts.
  • 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.

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.

Concerns regarding the implementation of the codes (labour law reforms)

  • The Government announced its intentions of implementing the Codes from April 2021 even as State governments were completely unprepared with the rules. Further, the major political parties reallocated their energies to regional elections rather than the implementation of codes.
  • The central government has deferred the possible date of implementation to October 2021, while the Supreme Court of India has exerted pressure on both the central and the State governments to implement a ‘one nation, one ration card’ (ONOR) scheme (which is essential alongside the implementation of the labour law reforms) and register all the unorganised workers under the National Database for Unorganized Workers (NDUW), which was to have been done by July 2021. Hence, Government agencies are rushing to comply with both the directives.

 – Source: Indian Express


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