Executive Secretary- Indian Cutting Tool Manufacturers’ Associoation
During 2019-20 , as part of the Labour Law Reforms, to facilitate ease of doing business and advance workers rights, Parliament consolidated as many as 29 labour laws into four codes-
- Code on Wages
- Code on Social Security
- Occupational Safety Health and Working Conditions Code
- Industrial Relations Code
Among other things, for the first time Gig & Platform Workers were defined. The Codes also aimed at undertaking reforms in wages, overtime work, social security benefits and occupational safety.
However, these codes are still awaiting implementation due to stiff opposition from various groups including workers’ groups despite the far-reaching reforms these codes profess to bring in due to misplaced perceptions.
Echoing Industry sentiments, Suchitra Dutta, executive Director, Indian Staffing Federation (ISF) , explained that the labour codes represent a significant reform aimed at promoting industrial and job growth as they offered simplified compliance, greater workforce flexibility, and alignment with global standards, fostering an environment conducive to investment and productivity.
“By aligning with these codes, industry can achieve a balance between operational efficiency and worker protections, contributing to job creation and global competitiveness in Indian Firms” she added.
Rishi Agrawal, co-founder, Team Lease Regtech, said the protracted delay in implementation of these new codes is a matter of concern as Industry is deprived of their benefits. The Government should expedite their enforcement , Agrawal stressed.
Nudging States to Reform
Meanwhile, the Central Government has found a workaround to implement the labour codes. In the absence of a clear time line for notifying the four new labour codes, the Centre has signaled a change in its strategy. It has asked all states and union territories (UTs) to make “necessary” amendments to their labour laws to align them with the “spirit and provisions” of the new code.
Several States have since amended their labour laws to align with industry demands as a part of broader strategy to position themselves as investment friendly destinations.
At least 20 states and union territories have increased the threshold for retrenchment without Government approval from 100 to 300 workers- a long stand demand of Industry. Similarly, 19 states and union territories have doubled the threshold under the Factories Act to 20 workers(for units with power) and 40(those without power). An equal number of jurisdictions have raised the threshold for the applicability of the Contract Labour Act to 50 workers, up from 20 at present.
Among other changes, 31 states and union territories have allowed women to work night shifts , while all states and union territories have notified reforms related to compliance notices before prosecution.
The Pitfalls
However, experts believe that asking states to take the mantle of labour reforms has only limited potential in terms of ease of doing business, streamlining regulations, improving working conditions and supporting industry growth. Bringing states in would create fragmented jurisdictions and complicate the implementation, thus making the Centre’s labour reform exercise redundant.
Labour Lawyer B.C. Prabhakar said a large number of establishments have their operations in multiple states , making it cumbersome for them to comply with numerous rules and regulations. Also, the establishments working in the central sphere have to keep following the Centre’s old laws, thereby putting them at a disadvantage with regards to other establishments in the state, till the time the new codes come into effect.
“The new labour codes were passed with the intent of creating some sort of uniformity in labour jurisprudence , States going ahead and making changes in their own laws will end up complicating the whole implementation apparatus” he added.
Way Out
It is very clear that nudging States to bring in reforms to implement the new labour code will serve very limited purpose since each state will form new set of rules contrary to the one envisaged by the Centre to bring about uniformity across the Country in implementing the new codes which are reformist in all aspects aimed at ‘ease of doing business’