GS2 - Government Policies and Interventions for Development in various sector and Issues arising out of their Design and Implementation

GS3- Indian Economy and issues related to Development and Employment

Keywords: Labour Unions , wage code, Article 39, Art43 ,Art 43 A , Gig Economy, Contractual Labour , Informalisation of Economy

Why in News?

After repeal of Farm Laws ,Trade unions have intensified their agitation against the Codes and pressurising the government to repeal the codes.

About Labour Codes

Code on Wage,2019

1. It makes provisions for minimum and timely payment of wages to all the workers in India.
2. The Code introduces the concept of floor wages wherein the rates will be fixed by the central government by taking into account the minimum living standards of the workers.
3. Once the code is enacted, the minimum rates of wages fixed by the State Government cannot be less than floor wages as determined by the Central Government.
4. The Code applies to all the establishments irrespective of the number of employees working in the establishment. It also applies to all the employees employed in both the organized and the unorganized sector.

Industrial Relations Code , 2020

1. Allows companies to hire and fire workers easily.
2. Companies employing up to 300 workers will not be required to frame rules of conduct for workmen.
3. At least 14 days in advance notice  to employers if workers  want to go on strike.
4. Any establishment employing 20 or more workers should have Grievance Redressal Committee
5. A reskilling fund to help skill retrenched workers.

Occupational Safety, Health and Working Conditions Code , 2020

1. Envisages safety standards for different sectors, focusing on the health and working condition.
2. The code  recognises the right of contractual workers.
3. Code  provides for statutory benefits.
4. Code also recognises the rights of transgenders.

Code on Social Security , 2020

1. Replaces nine social security laws, including Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme etc.
2. The code universalizes social security coverage to those working in the unorganised sector.
3. Code also extends social security to agricultural workers .

Objectives behind labour reforms

1. Consolidation and simplification of numerous States’ and Centre labour laws.
2. Streamlining of Minimum Wages in the country and ensuring they reach the beneficiaries.
3. Introduction of fixed-term employment, to curb the tendency for employing contract labour.

Labour union and Labour Codes

1. Labour unions criticised the  government for not holding adequate consultations with them on the Codes.
2. The absence of effective dialogue contradicts the International Labour Organization treaty, the Tripartite Consultation (International Labour Standards) Convention of 1976 (C.144), which India ratified in February 1978.
3. The government introduced changes in major contentious clauses (hire and fire, contract labour) which were not based on robust empirical evidence.
4. The government diluted good clauses like standing orders and inspections which are essential for good working conditions.
5. Government’s promises  like  social security fund, universal minimum wages and social security were not backed by any  credible evidence based systems.

Hurdles in labour unions’ successful strikes

1. Solidarity issue: Out of the 12 major Trade unions, 10 have been jointly spearheading agitations calling for the repeal of all four Codes while remaining two have been conducting their own limited agitation.

2. Federel Trap: Though the trade unions for long succeeded in blocking labour law reforms at the national level, substantial reforms of laws and inspections have already happened at the state level.
3. Unconsolidated and Unorganised Labours: Though there are around 400 million unorganised and informal workers, they are scattered and not organised in a consolidated manner.
4. Long Sustainability of movement issue:  Unlike farmers, the industrial workers cannot organise longer and larger strikes as they would lose their jobs and wages, owing to the existence of a large unorganised and informal workforce to replace them ,if needed.
5. Past failures : The failures of the Railway strike of 1974 and the Bombay textile workers’ strike of 1982-83 haunt the labour movement.
6. Neo-liberal world order demands flexible Labour market: Larger labour reforms agenda comprising Gig Economy, flexible labour markets, etc. are supported by global financial institutions like the World Bank and the International Monetary Fund.

Conclusion

In the wake of these challenges, trade unions should come up,  either with good strategies to hurt the electoral prospects of the government  or use  the possibility of legally challenging the Codes in the Apex court,  as has been done in case of gig workers.

Prelims Question

Q. Consider the following statement

1. Labour is part of concurrent list.
2. Labour strikes is a fundamental right.

Choose the correct one:

a. 1 only

b. 2 only

c. 1 and 2

d. None

Answer: a option

Mains Question

Q. In the Neo-liberal global order, labour market flexibility is key to survive in intense competitive economic environment. In this backdrop, examine the labour codes essence in making India a favourable destination for ease of doing business. (15 marks)

Sources: The Hindu