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Modi govt’s new labour bills pro-employer or employee? Truth lies in between: Ex-IAS officer

Already facing protests, the new Wage Code and Occupational Safety & Health Code bills do have many progressive provisions.

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The Narendra Modi government has kept its promise and rolled out the first tranche of labour reforms in the form of the Wage Code Bill and Occupational Safety & Health Code Bill in Parliament. Predictably, the members of the Left parties and the Trinamool Congress have criticised the bills as anti-worker.

The Leftist Centre of Indian Trade Unions – or CITU – has threatened nationwide protests against the new provisions because they see it as pro-employer. On the other hand, the BJP-affiliated Bharatiya Mazdoor Sangh has supported the bills as progressive and the products of tripartite consensus. As in all things, the truth lies somewhere in between.

The Wage Code Bill – a good move

The Wage Code Bill seeks to simplify, rationalise and consolidate the Minimum Wages, Payment of Wages, Payment of Bonus and Equal Remuneration Acts. Universal application of the minimum wage law to all employment categories, instead of its selective application only to scheduled employments, would fulfil a long pending demand.

From the current 40 per cent to universal coverage of minimum wages, the law would extend the right of sustenance to every worker, which is unexceptionable. The government has claimed that this would benefit around 50 crore workers. The main question is how will minimum wages be determined? By executive orders or through tripartite consultations?

No doubt, the tripartite Minimum Wage Advisory Board will continue to exist in the new dispensation, but will its advice will be binding? The recent central government notification about increasing the national minimum wage to Rs 178 per day is a case in point. The concept of a national minimum wage, while allowing regional variations based on the level of economic development, would be a pragmatic solution to a vexed issue. From the existing 2,000 types of minimum wage rates based on type of employment, four categories based on geographical regions are being considered for the purpose of fixing national minimum wages. No state government can fix minimum wages below the floor-level wages determined for the region.

Also read: Economic Survey fix for Modi govt’s jobs crisis — labour reforms, end perks for MSMEs

Liability of payment from employee to employer

Another welcome inclusion is the transfer of liability for proof of non-payment or short payment of wages from employee to employer.

Currently, the aggrieved worker has to prove in the labour court/industrial tribunal that he or she was short-changed or denied the due emoluments. With payroll documents in the custody of the employer, this was an anomalous stipulation. Added to that was the small window for filing claims for non-payment or short payment before they got debarred by the law of limitation. The limitation period for filing such claims is being enhanced from six months to three years, which will bring much relief to the workers. Insofar as payment of wages is concerned, the new code would remove the existing wage ceiling of Rs 24,000, and cover all employees in all places of employment as against only six at present.

As regards bonuses, there is no procedure for filing claims under the existing law and the aggrieved worker has to approach the labour court/industrial tribunal for redress, which is dilatory and frustrating.

The new labour code proposes to set up a claims authority that will decide all claims of non-payment or short payment of wages as well as bonus, obviating circuitous judicial processes. In yet another progressive move, the new code would cover transgendered people for purposes of equal remuneration.

Also read: To get more women in labour force, India must stop pushing industrial areas to city limits

Occupational Safety and Health Code Bill

In the Occupational Safety & Health Code (OSH) Bill, provisions concerning safety, health, welfare and decent working conditions are being extended from the present nine major sectors to all establishments employing 10 or more workers. The code will also allow night shift work for women workers, which is the need of the times. These are quite unexceptionable on the face of it.

However, some principled objections have been raised by the trade unions against the inspection system proposed under the new OSH Bill, where inspectors will be concurrently designated as facilitators and expected to offer advisory services. The new code seeks to formalise what has already been introduced by executive order and is operative under the web-based Shram Suvidha Portal. Clearly, this is being done to appease the employers who have always complained about the inefficiencies and venality of the dreaded inspector raj. Apprehensions of workers that the enforcement machinery will get compromised are not unfounded.

Mindless law enforcement needs to be tempered no doubt, but the solution does not lie in throwing the baby out with the bathwater. A balance between ease of compliance and effective enforcement must be struck lest the labour inspection protocol is rendered ineffective and infructuous.

We have to see if the Lok Sabha passes the OSH Code as it is or refers it to a select committee for further deliberations. The wage code, which has already been scrutinised by the Standing Committee of the last Parliament, may secure a smooth passage. The second stage of labour reforms dealing with industrial relations and social security will have to wait until all the stakeholders are on board and Rajya Sabha numbers turn favourable for the government.

Author is a former IAS and UN/ILO Official. Views are personal.

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  1. 1. I think basic objective of our labour laws is to protect employees. We do not have social security schemes which take care of employees especially in situations in which they lose jobs for reasons beyond the control of employer. Therefore, if objective behind the labour laws has to be achieved, we must ensure that their implementation is effective. 2. There is also another view. I wish to say that it is time we recognise fact that an employer is a creator of new jobs, even if he employs one person. My observation is that our labour laws very often overlook this fact and place on the employer many obligations which can lead to closure of small industrial units. My point is that on one hand we must educate the employer of his duties as per the labour laws and on other hand we must make efforts to have in place a mechanism which will ensure that every small employer gets government assistance to meet emergencies like fall in sales on account of general economic slowdown, or natural disasters or some other reason beyond employer’s control.

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