Active Stocks
Fri Sep 22 2023 15:58:38
  1. Tata Steel share price
  2. 126.7 -0.86%
  1. HDFC Bank share price
  2. 1,529.2 -1.57%
  1. State Bank Of India share price
  2. 598.1 1.67%
  1. Power Grid Corporation Of India share price
  2. 199.1 -1.34%
  1. Tata Motors share price
  2. 621.1 -0.93%
Business News/ Opinion / Views/  Labour regulations need both clarity and uniformity

Workers are often rightly identified as the lifeblood of any organization or industry. In parallel, a well protected, nurtured and skilled workforce attracts investment to a country, since this makes it easier to do business. These realities must have provided an impetus for last year’s regulatory reforms that merged 44 Indian labour laws into four labour codes. While the step drew both cheers and criticism, most parties may agree that these reforms were long overdue. Labour regulations in India are as sensitive a subject as they are complex and cumbersome.

The complexity stems from labour rules being part of the concurrent list of the Constitution’s Seventh Schedule, delegating policy powers to both the central and state governments. The cumbersomeness came with regulations spelt out across 44 different laws. Their reduction to four codes is therefore a good initial move in the right direction.

India today is not what it used to be when its initial set of labour laws was crafted. The country, which once relied heavily on manufacturing, is now largely a service-led economy. It is a rising information communication technologies (ICT) power that’s also one the world’s biggest startup hubs. India houses flourishing new industries, such as cab-hailing, food-delivery and e-commerce. As these neo-industries take shape and help expand India’s economy, labour regulations must cater to their workers’ needs and be cognizant of emerging businesses and organizational models. This calls for consistency and the elimination of all vagueness in existing labour norms and rules.

Take the case of working hours, for example. Under pre-existing regulations, organizations in India cannot ask an employee to work for more than 48 hours a week. If an employee works for 6 days a week, this amounts to 8 hours per day. There are additional caps on how many hours an employee can work in a day. The regulations create complications for organizations that have not only moved from six to five working days per week, but also for those looking to experiment with three- or four-day work-weeks as an efficiency test. The number of work hours, aside from fairly-remunerated overtime hours, should be capped at 48 hours per week with a per day maximum of 12 hours and appropriate breaks and rest. This will also allow companies to try out shorter work- weeks, and would likely improve the work-life balance of employees.

Recently, India took steps to formally recognize gig-workers, but it is equally important to legally recognize part-time workers. Gig and part-time workers are not the same. The latter are somewhere between full-time employees and self-employed gig-workers. They’re often college students, freelancers, or women working from home to earn an income alongside their other obligations, but they presently lack legal recognition. While some states have done this under their Shops and Establishments Acts, the lack of central legislation has resulted in uneven regulation and varied interpretations of the rights of part-time workers by different state governments.

Lack of uniformity and varied regulations at the state level have had an impact on other aspects of employment as well. For example, in the case of overtime work, the Union government has provided a cap of 125 hours in a particular quarter; but even with these directions, this rule varies across states, with some allowing more or less overtime. These variations are disruptive to organizations with operations across various states, and may result in workload disparity.

Countries like the US and UK don’t set overtime caps. They leave it to the discretion of employers and employees. Overtime is an instrument that workers have at their disposal to earn additional income. In the interest of employees as well as employers, the government should look at either doing away with overtime caps or providing a uniform limit of 150 hours.

In addition, certain labour-related compliance requirements are out of sync with a service-led economic model and the operational structures of many firms. Take ‘standing orders’, for example. These rules of conduct were created to define employment conditions in a bid to protect the rights of factory workers. Further, the law on standing orders adopted a very wide definition of ‘industrial establishments’ that is now being applied to service sectors, including Information Technology and IT-enabled service enterprises, where workers have different work arrangements. Many of them work remotely, for instance, unlike factory workers. The relevance of standing orders was strong and remains pertinent in the context of factories and industrial set-ups, but are not always relevant to new models of work. Moreover, many non-industrial Indian companies are emulating global best practices for employee welfare by putting in place ‘town hall’ forums, human-resource redressal mechanisms and highly approachable corporate structures that reduce the need for standing orders.

The government, having embarked on bold labour reforms, has taken its first big swing at simplifying labour regulations in the country. Rules for the Code on Wages have been issued. As we await the notification of rules for other labour codes by the government, one hopes that the country leverages this opportunity to create regulations that would not only support the current trajectory of India’s economy powered by its high-potential neo-industries, but also cater to the requirements of tomorrow’s workforce.

Sabina Dewan is president and executive director, JustJobs Network

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 16 Mar 2021, 10:27 PM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App