Three New Labour Codes Introduced by Labour Ministry Amidst Strong Opposition

The Code on Social Security, although being touted as a welcome change to improve the conditions of gig workers, will relax penal provisions for employers who violate labour laws.

three new labour codes
Rupak De Chowdhuri/Reuters

The Labour Ministry on Saturday introduced three new labour codes in the Lok Sabha. These three codes, along with the Code on Wages passed in 2019, are meant to consolidate all existing labour laws.

The three new labour codes include the Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020 and were introduced by BJP Labour Minister Santosh Gangwar amidst strong opposition.

Under the Industrial Relations Code Bill, 2020, companies with upto 300 workers will not require any government approval for arbitrary hiring and firing of workers. Under the current laws, this allowance is given only to companies with less than 100 workers.

The Standing Committee of Labour had made this recommendation earlier this year, citing the example of Rajasthan. The Committee had said that companies with up to 300 workers should be given the power to cut their workforce or shut down companies without government permission.

According to the Committee, doing this had led to an increase in employment and a decrease in retrenchment in the state.

Under this Code, companies with up to 300 workers will also no longer need to issue a standing order, i.e. rules of conduct for workmen employed in industrial establishments, Aanchal Magazine from the Indian Express reported.

The Code will also change the conditions for a legal strike, where no worker can go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal or a National Industrial Tribunal, and sixty days after the conclusion of such proceedings.

Under the current laws, only workers in public utilities need to give notice at least 14 days before going on strike.

Even the Standing Committee of Labour had recommended against increasing this time period, or applying this mandate to workers in other industrial establishments.

The Code on Social Security, although being touted as a welcome change to improve the conditions of gig workers, will relax penal provisions for employers who violate labour laws, Moushumi Das Gupta of The Print reported.

Under this code, employers who fail to make contributions to Employees’ Provident Fund Organisation or Employees’ State Insurance Corporation, will no longer serve a jail term of three years, which will be reduced to two.

Employers who reduce wages/benefits admissible to an employee, or deduct wages of an employee, etc, will no longer face imprisonment, but only a fine of Rs 50,000.

Employers who commit repeat offenses such as failing to make contributions to provident funds and insurance, not paying maternity benefit and gratuity, etc, will no longer face imprisonment for five years, which will be reduced to three.

The Occupational Safety, Health, and Working Conditions Code has scrapped the earlier provision for temporary accommodation of workers near worksites, instead of introducing a lump sum as a travel allowance.

Under this code, limits on hours of work will no longer be mandated to be eight hours. Instead, State governments may notify a new limit to hours of work.

Even under the current laws, it is easy for employers to exploit workers who are not aware of their rights or do not have the resources to take legal action against their employers. Now, workers will find it next to impossible to strike for their rights legally while employers will have the legal freedom to exploit. For instance, in the case of arbitrary retrenchment, how can workers wait for 60 days before striking? Many will simply be forced to look for other sources of earning a livelihood.

What all of the three new labour codes reveal is a move towards reducing regulation and increasing flexibility for employers, and a dilution of workers rights that is whitewashed as ‘ease of doing business’. The supposed simplification of laws into four codes is an attempt to remove or modify the various protections that ensure the basic rights of workers to employment security, safety, social security, and the right to protest.


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June 2024



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