Dr Rohin Koul
Prime Minister Narendra Modi has said, “We want such an India where the government doesn’t interfere with the lives of citizens. Every rule, every process that has stood before the people of the country as a hindrance, as a burden, we have to remove.” The economic globalization is a result of integration between the nations which has been achieved through international trade and business. It can also be attributed to integration of economies which has enhanced foreign investment, access to good quality of goods and services, competition in domestic and international markets, employment opportunities and standard of living. The New Economic Policy, 1991 based on economic globalization, liberalization and privatization initiated economic reforms with the objective of making Indian economy globally competitive and fastest growing economy. The new economic reforms re-modeled services provided by the labour force which in turn would have changed labour laws as well. But the labour laws remained untouched during these economic reforms. The critics were of this view that the existing labour legislations have duplications and to comply with numerous laws is a challenge. The Second National Labour Commission (2002) suggested that the multiplicity of labour laws has resulted in obsolete provisions and conflicting definitions which have altogether created numerous complexities regarding compliance. The Commision recommended that the Central Labour laws should be codified in four codes covering broader areas involving (a) wages; (b) industrial relations; (c) social security; and (d) health, safety and working conditions. While prolonged deliberations were held in this regard but no serious initiatives were taken with respect to amalgation of these laws. The Ministry of Labour and Employment in 2019 introduced four bills with the aim for consolidating existing Central labour laws in four codes. The four codes namely (a) Code on Wages, 2019; (b) Code on Social Security, 2020; (c) Industrial Relations Code, 2020; and (d) Occupational Health, Safety and Working Conditions Code, 2020 aims at accelerating economic growth through modernization of laws, simplification of laws, amicable settlement of disputes, effective enforcement of laws and ease of doing business. These codes will become effective from the date when they are notified. The basic foundation of labour statutes stands on the foundation that interest of workers is predominant and need to be protected against employers.
There are apprehensions that these codes will dilute existing safeguards available to the labour force with respect to rights and welfare measures. Some are of this view that they will expose labour to such vulnerabilities which are part and parcel of employer-employee relationship and promote hire-and-fire culture.
The Code on Wages, 2019 has consolidated (a) Minimum Wages Act, 1948; (b) Payment of Wages Act, 1936; (c) Payment of Bonus Act, 1965; and (d) Equal Remuneration Act, 1976. The code regulates wages, equal remuneration of wages, payment of wages, determination of minimum wages and bonus. In addition to this, it prohibits discrimination on the basis of gender in matter relating to wages and in appointment for the same or similar work. The provisions of the code are applicable to the employees associated with both organized as well as unorganized sector.
The expression ‘worker’ has been introduced in place of ‘workman’ to express gender neutrality. As per the code, the Central government has power to fix floor wage for different geographical regions on the basis of the minimum living standards and the appropriate government has an obligation not to fix rate of minimum wages less than the floor wages which is determined for a particular region. The minimum wages have to be assessed and revised every five years and employers are prohibited to employ people on wages less than the specified minimum wages. The employer has the liberty to fix wage period as daily, weekly, fortnightly or monthly and has to make payment in valid currency notes, coins and through electronic medium, cheque or by credit to the bank account. The wages of the employee are subjected to deductions as provided under the code but such deductions should not exceed more than 50 per cent of the employee’s total wage. The inspector under the code is renamed as ‘Inspector-cum-Facilitator’ who is meant to advice employers and workers relating to compliance with the provisions of the code and has power to search, examine, inspect and seize required for the enforcement of the provisions of the code.
The Central government and State governments has power to constitute advisory boards for fixation or revision of wages and for any matter enumerated in the code. Further, the code has provided that specific employees are entitled to annual bonus which should be at least 8.35 per cent of wages, and the maximum bonus to which employee is entitled should not exceed 20 per cent of his annual wages. The Code on Wages, 2019 is a significant initiative meant to rationalise laws regulating wages and to facilitate effective compliance of these laws.
The Industrial Relations Code, 2020 has consolidated and amended following labour legislations (a) Trade Unions Act, 1926; (b) Industrial Dispute Act, 1947; and (c) Industrial Employment (Standing Orders) Act, 1946. The definition of the worker has been given a wider scope and includes working journalists, newspaper employees and employees who are meant for promotion of sales. The concept of fixed term employment has been introduced to provide flexibility to the employer to hire in relation to supply and demand. The fixed term employees are considered at par with permanent employees in terms of wages, working conditions, allowances and other benefits.
Where there are more than one trade union in an establishment, the code has provided that status of bargaining union will be given to a trade union which has 51 per cent employees as members. In case this condition is not satisfied then a bargaining council should be established consisting representatives of all existing trade unions. The provisions of the code regulating layoff, retrenchment and closure are not applicable to those industrial establishments where the number of workers is less than 50 on an average per working day during the previous calendar year. The code has provided that a notice of strike has to be given to the employer within sixty days of going on such strike and prohibits strikes during pendency of arbitration, conciliation and proceeding in the tribunal.
The provisions regulating standing orders are applicable to those industrial establishments where 300 or more workers are employed on any day in preceding twelve months or a year. The code has also provided for grievance redressal committee in industrial establishments where more than 20 employees are employed for settlement of disputes arising from individual complaints. The objectives of the Industrial Relations Code, 2020 is to enhance cooperation between various stakeholders and provide effective mechanism for settlement of disputes, thereby, ensuring industrial harmony.
The labour codes have consolidated various scattered labour legislations and has rationalised several unessential provisions. Widening the scope of the definitions and including unorganised sector within purview of the labour codes ensure that the benefits of the law are applicable to larger workforce. Some of the stakeholders are of this view that the labour codes have little to do with welfare of workers, moreover, the main objective is to boost confidence of investors and improve ease of doing business ranking. Trade unions have alleged that the codes have provided absolute powers to the employers, thereby, mitigated the safeguards available to the workers under law. The fixed term employment will result in unstable employment rates resulting in unemployment in the form of casual, contractual and temporary workers. Such apprehensions need to be addressed failing which there is a grave possibility of vehement labour unrest in near future.
(The author is an
Assistant Professor in Goa).
