Thursday 22 April 2021
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EconomyLabour laws to turn lenient to businesses as well as workers

Labour laws to turn lenient to businesses as well as workers

While the industry as much as the MoS for labour count benefits of the labour reforms, unions are concerned they can't hold businesses to ransom

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The Rajya Sabha today passed three of the four labour code bills, which constitute the government’s flagship labour reforms. But opposition protests raged outside parliament. The government is thus setting examples of efficient floor management, with one reform measure after another passing the muster of both houses of the parliament since the beginning of Modi 2.0. The labour-related bills follow the successful turning of farmer-related bills into laws.

The opposition, which has been boycotting both houses since yesterday, had written to Rajya Sabha chairman Venkaiah Naidu, asking him to not let the ‘contentious’ bills be passed “unilaterally”. “It will be a blot on democracy,” the opposition wrote. It has been on the warpath since the Deputy Chairman of Rajya Sabha Harivansh Singh did not allow physical voting for the contentious farm bills on 20 September.

Soon after passing the bills, Rajya Sabha was adjourned indefinitely in view of the coronavirus infection, which has affected more than 25 MPs till now.

The Lok Sabha had passed the Occupational Safety, Health and Working Conditions Code, 2020, the Industrial Relations Code 2020 and the Code on Social Security, 2020, yesterday. They now only need President Ram Nath Kovind’s signed consent.

Introducing the laws in the upper house, junior Labour Minister (of State) Santosh Gangwar said they would provide a “safe environment” for workers. “Social security benefits have also been added. This will be in sync with Prime Minister Narendra Modi’s resolve for universal social security,” he added.

Parliamentarians of the Indian National Congress (INC) and like-minded parties held a march from the Gandhi statue to the Ambedkar statue in the parliament premises today.  They are protesting against the “anti-farmers, anti-workers bills that have been rubberstamped in Parliament in the most undemocratic manner by the Modi government,” tweeted Congress’s Jairam Ramesh.

Pros of the proposed labour laws

The government says that the labour-related bills will bring in reforms to ensure easier compliance with labour standards worldwide. This, in turn, will help bring in foreign investment.

Sixteen states have already increased the threshold for closure, lay off and retrenchment in firms with up to 300 workers without government permission, the minister said.

Lok Sabha passes three labour code bills, Rajya Sabha to take them up today
MoS for Labour Santosh Gangwar making his case in favour of the amended labour laws in the Rajya Sabha on 23 September

Replying to the debate on the three labour reforms bills in the house, the MoS for labour said, “The purpose of labour reforms is to provide a transparent system to suit the changing business environment.”

The minister informed the house that as many as 16 states had already increased the threshold for closure, lay off and retrenchment in firms with up to 300 workers without government permission.

“States have been given flexibility to tweak labour laws as per their need,” Gangwar said. He said these bills would safeguard the interest of workers and provide universal social security to workers by expanding the ambit of Employees’ Provident Fund Organisation and Employees’ State Corporation of India.

The minister said further that there would be a social security fund to cover around 40 crore unorganised sector workers. Commenting on the Social Security Code, the minister said, Employee Provident Fund Organisation benefits can now be availed by all firms with 20 or more employees as the existing Schedule defining establishments has been done away with.

“Besides, employees with firms less than 20 workers will be able to join EPF while the government will also extend the benefits of EPFO to self-employed,” Gangwar said.

The minister sought to allay the apprehension that workers’ right to strike had been withdrawn under the new Code. “The provision of 14 days’ notice prior to strike is intended to enable employees and employers reconcile during this period,” he said.

The industry has welcomed the codes. “The comprehensive reforms promise to reset the entire regulatory framework to benefit millions of workers and provide enterprises with flexibility, transparency and clarity,” Chandrajit Banerjee, director general of the Confederation of Indian Industry said.

According to the Indian Staffing Federation, the larger impact of these legislations will be easier, faster and compliant management of the workforce in India in the coming years. “The direct advantage to ease of doing business will make India even a bigger magnet to overseas investment in the goods and transport sector, logistics, agri- and agro-industries, manufacturing and supply chains besides increasing formalisation of the workforce,” Lohit Bhatia, president of the Indian Staffing Federation said.

Cons of the proposed labour laws

The opposition and labour unions contend that the bills make it easier to lay off workers and put restrictions on their right to protest. The Industrial Relations Code Bill allows companies with up to 300 workers to lay off people without the state government’s approval.

Labour laws to turn lenient
Opposition politicians protesting outside the parliament

So far only companies employing up to 100 people were allowed to do this.

The Code on Social Security Bill extends social security funds only to workers for app-based firms like Uber, Ola, Swiggy and Zomato. But labour unions claim more is needed as these workers continue to remain in a legal grey zone. They are often treated as independent partners who are not covered under most labour regulations.

The proposed bill on health and occupational safety helps only those working in factories, mines and docks and are not universal in nature, contend the labour unions, which have joined hands with the farmers in their protest against the farm sector bills that were passed on Sunday.

Neither positive nor negative

Under the same law, no industrial worker is allowed to go on strike without a 60-day notice. So far such rules were applicable on only those involved in public utility services like water, electricity, natural gas, telephone and other essential services.

Workers in essential services are required to give a six-week notice before any strike.

This may not be a positive or negative aspect per se. “It will bring stability to the business environment in the country,” said Animesh Singh, a lawyer with expertise in labour laws, adding, “Having the option to fire employees does not mean the businessman would fire them at will. If he does, he is a lousy businessman in the first place who is shaking the foundations of his own business.”

Why BMS is protesting

Labour organisation Bhartiya Mazdoor Sangh, which is affiliated to the BJP’s ideological mentor Rashtriya Swayamsevak Sangh but was established by a former communist trade union leader Dattopant Thengadi, has expectedly opposed the labour code bills. The organisation, which has issued a series of demands, contended that the laws were passed in a hurry.

In June last year, the government decided to condense 44 existing labour laws into four codes. The move was expected to help foreign companies do business in India. This process was crucial in view of the economic downturn.

The codes involved social security, occupational safety, health and working conditions and industrial relations. The parliament had passed one of the codes, the Code on Wages Bill, 2019, last year.

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