Home >News >India >Labour reform gets a leg up, Lok Sabha passes three labour codes
Parliamentarians in Lok Sabha during the ongoing Monsoon Session  (PTI)
Parliamentarians in Lok Sabha during the ongoing Monsoon Session (PTI)

Labour reform gets a leg up, Lok Sabha passes three labour codes

  • The three codes will allow states to roll on labour reforms and empower them to exempt any company or companies from complying with one or more labour laws
  • Opposition parties including Congress had walked out of the lower House and did not participate in the discussion

New Delhi: The Lok Sabha Tuesday passed three important labour codes that shall cheer industries and allow them flexibility in hiring and retrenchment, make industrial strikes difficult besides, facilitate ease of doing business and help expand social security net for informal workers.

Labour Minister Santosh Gangwar said the changes in the labour Codes have been made keeping in mind the transformation India has undergone in past decades in terms of technology, work methodologies, work-sphere facilities and the nature of works. He said changes in labour laws have been envisaged by recognizing the changes global scenario and for meeting future work requirements.

While initiating discussing on the three bills - Code on Industrial Relation, Social Security, and Occupational Safety and Health (OSH), labour minister said industries and workers are two sides of the same coin and the three bills have tried to balance their rights.

“The labour codes have been brought with a view to balance the interests, rights and obligations of employees and the employers in the country," Gangwar said adding that the multiple licensing, paper works hassles of companies will come down significantly.

Opposition political parties including Congress, which had opposed the bills last week when it was introduced, had walked out of the lower House and did not participate in the discussion.

In the Industrial Relation Code, government has allowed companies having up to 300 workers to fire people or close units without prior approval of the government. And companies having more than 300 workers need to apply for approval, but if authorities do not respond to their request then it will be deemed approved.

Besides, the IR Code introduces more conditions restricting the rights of workers to strike. As per the code, 60 days strike notice and during the pendency of proceedings before a Tribunal or National Industrial Tribunal, 60 days after the conclusion of such proceedings workers can-not go on a legal strike. Strike condition has been applied to all industries. Currently it’s between two weeks and six weeks. It also discourages flash strikes.

The three codes will also allow states to roll on labour reforms and empower them to exempt any company or companies from complying with one or more labour laws. A move that industries believe will boost investment.

“The labour codes aim to boost new industrial investment, including foreign investments, and provide a competitive advantage to India in the global economy. The three codes have taken into consideration the interests of migrant workers, gig economy workers and unorganized sector workers and have also ensured operational freedom to manufacturers. The reduction in compliance burden would facilitate the expansion of establishments, helping to create jobs on a large scale across sectors," argued Chandrajit Banerjee, Director General, Confederation of Indian Industry.

But some experts and labor economists said the blanket exemptions to industries through various provisions will lead social and economic unrest and take away both job security and wage security.

“The codes provides exemplary flexibility to industries. Put together it will take away job and wage security and promote fixed term employment unhindered. Their right to strike and bargain has been curtailed and now they will be at the mercy of employers and if their over expectations of their employers are not met, their job loss will be quicker," said K.R. Shyam Sundar, a labour economist, adding that fixed term employment as defined in the codes will make cotractualisation of work a normal activities.

Gangwar, however, said that fixed term workers and regular workers will enjoy equal benefits. He said in the Social security Code talks about universalizing social security by bringing informal workers, gig and platform workers under its ambit. He said companies having less than 20 workers can voluntarily join EPFO to get social security benefits and internal workers will be free to voluntarily join employee state insurance scheme for getting healthcare benefits. The code also talks about platform companies employing gig and making provision of one to two percent of their profits for social security need of their workers.

Gangwar reiterated that all employees will now have an offer letter and the states and both the centre and the state will create database on migrant workers and offer them several benefits including the portability of public distribution system and construction cess benefits. Arguing in favour of too many clauses of the codes being left to the rule making process, the labour ministry said it will help in changing the finer nuances of labour laws as per the requirement of time.

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