Context: Recently, Parliament has passed 3 labour code bills aimed at labour welfare reforms covering more than 50 crores organized and unorganized workers in the country. This also includes gig, platform and also opens up the doors for social security to those in the self-employment sector.  These three Bills are (i) Industrial Relations Code, 2020 (ii) Code on Occupational Safety, Health & Working Conditions Code, 2020 & (iii) Social Security Code, 2020. 

Background

• In India, labour falls under the Concurrent List of the Constitution. Therefore, both Parliament and state legislatures can make laws regulating labour.
• Given the large number of state and central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security and wages and their often complex and archaic provisions had made compliance difficult for the businesses.
• As part of the government’s labour reform agenda, the existing labour laws are to be amalgamated into four labour codes- on wages, industrial relations, social security and safety, health and working conditions. This would help to improve ease of compliance and ensure uniformity in labour laws.
• The code on wages was passed in 2019.
• The Code on Wages seeks to amend and consolidate laws relating to wages, bonus and matters connected therewith. The Code will subsume four labour laws – Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act and Equal Remuneration Act.

Key Points

• The Labour and Employment Minister introduced the Industrial Relations Code, 2020; the Occupational Safety, Health & Working Conditions Code, 2020; and the Code on Social Security, 2020.

The Industrial Relations Code, 2020:

• The Code provides for the recognition of trade unions; notice periods for strikes and lock-outs, standing orders, and resolution of industrial disputes.
• It would subsume and replaces three labour laws: the Industrial Disputes Act, 1947; the Trade Unions Act, 1926; and the Industrial Employment (Standing Orders) Act, 1946.
• The major provisions of the Industrial Relations Code Bill include the mandatory provision for companies with 300 or more workers to prepare and submit to the government standing orders regarding the conditions of service, including shift timings and termination of employment.
• As of now, this applies to establishments with over 100 employees, under the Industrial Employment (Standing Orders) Act, 1946.
• The Industrial Relations Code aims to promote the ease of doing business and spur investment by encouraging labour flexibility.

Concerns:

• It will water down the labour rights for workers in small establishments having less than 300 workers and would enable companies to introduce arbitrary service conditions for workers.
• It will give tremendous amounts of flexibility to the employers in terms of hiring and firing, dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers which is complete demolition of employment security.
• The new conditions for carrying out a legal strike elongate the legally permissible time frame before the workers can go on a legal strike, making a legal strike near impossible.
• It has expanded to cover all industrial establishments for the required notice period and other conditions for a legal strike even though the Standing Committee on Labour had recommended against it beyond the public utility services like water, electricity, natural gas, telephone and other essential services, as is the case at present.
• The mention of ‘other sources’ for funding the re-skilling fund is vague. The reskilling fund is arbitrarily framed as the Code has no idea from where the funds for the same will come apart from employers’ contributions.
• These ambiguities are left to the rule-making processes and the bureaucrats and, further, there are unclarities over who will reskill the workers and how adequate the funding will be.

The Social Security Code Bill:

• The Bill replaces nine laws related to social security.  These include the Employees’ Provident Fund Act, 1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security Act, 2008. 
• Social security refers to protection measures provided to workers to ensure healthcare and income security in case of certain contingencies such as old age, maternity, or accidents.
• One of the major proposals of the Social Security Code Bill is to bring unorganised sector, gig workers and platform workers under the ambit of social security schemes, including life and disability insurance, health and maternity benefits, provident fund and skill upgradation.

The Occupational Safety Code

• The Occupational Safety Code subsumes and replaces 13 labour laws relating to safety, health and working conditions. These laws include: Factories Act, 1948; Mines Act, 1952; Dock Workers Act, 1986; Contract Labour Act, 1970; and Inter-State Migrant Workers Act, 1979, which has been highlighted during the recent migrant workers crisis due to COVID-19.
• These laws cover factories, mines, dock workers, building and construction workers, plantation labour, contract labour, inter-state migrant workers, working journalists, motor transport workers, sales promotion employees, and cine workers.
• The Code seeks to regulate health and safety conditions of workers in establishments with 10 or more workers, and in all mines and docks.
• The Code creates special provisions for certain classes of establishments such as factories, mines, dock workers, and constructions workers. These include separate provisions on licenses, safety regulations, and duties of employers.