It was announced by the finance minister, in her maiden Budget speech, on July 5, 2019, that the government has proposed streamlining multiple labour laws into a set of four labour codes to bring standardisation in the process of registration and filing of returns.
The Centre proposed to amalgamate 44 labour laws into four broad codes—on wages, social security, industrial safety and welfare, and industrial relations to reduce disputes and encourage entrepreneurs to set up their business in India.
In its previous tenure, the Modi government sought to bring labour reforms, but those proposals were opposed by trade unions. However, this time the government claims broad consensus among major labour unions as the proposed bill is likely to include national minimum wage for all kinds of employment, which could vary from state to state. The draft law also states that the minimum wage would be revised every five years.
Critical Analysis
The codes disempower workers
The proposed codes, appear to disempower workers and to be in opposition to the very idea of statutory protection of labour and dignified standard of living for workers. The original labour laws, ratified after decades of struggle, were meant to ensure certain dignity to the labour class. The proposal of the Ministry of Labour to set the national minimum floor wage at ` 178 seems to be without any standard criteria or method of estimation and sets a bad precedent for states. It is to be noted that the Ministry’s own committee recommended ` 375 as the minimum. Another area of concern is that these four codes fail to include over 95 per cent of the vulnerable working-class people in informal units and small enterprises, who are in dire need of legal safeguards.
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Ambiguity on wording
The wording and definitions in the new codes lack clarity. It is not clearly stated as to who constitutes an ‘employer’, an ‘employee’, or an ‘enterprise’, thereby giving the owner an upper hand in interpreting the provisions and placing the worker in an unadvantageous position.
Similarly, in order to minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees, even though they work as contractual as well as permanent employees. The code also includes provision on ‘employees below fifteen years of age’, which can be interpreted as legalisation of child labour. Further, in case of malpractices on the part of contractors, the code on wages protects the principal employer by legitimising and promoting further contractualisation of labour, instead of eliminating it.
Slavery-like provision
The wage code also brings back the oppressive and tyrannical provision of ‘recoverable advances’, a system that even the Supreme Court recognised as forced and bonded labour, wherein distressed and vulnerable migrant labourers could be bonded to work through advance payments.
The code also abolishes the eight-hour workday shift and has added provisions related to increased overtime. The code also gives enough scope to employers to evade bonus payments.
Moreover, non-payment of wages will now not be considered as a criminal offence; hence, it would be an uphill task for wronged and defrauded labourers to seek justice against their employers. Also, penalties in case of non-compliance have been reduced. This implies that it tends to provide a ‘facilitative’ rather than a regulatory and punitive environment for the owners, with ‘facilitators-cum-inspectors’ replacing the ‘inspectors’ who used to ensure implementation of various labour laws to aid employees.
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Finally, the code on industrial relations has a lot many restrictions—on forming or registering unions, calling a strike (only with prior permissions and notices), and seeking legal redressal for workers.
Ironically, the proposed laws resemble more ‘employer codes’ rather than ‘labour laws’.
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