explained-in-labour-codes-what-changes-for-workers-hirers

 

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Context: Parliament passed three Bills that complete the government’s codification of 29 labour laws into four codes, with the Rajya Sabha passing the Industrial Relations Code, 2020, the Occupational Safety, Health and Working Conditions Code, 2020 and the Social Security Code, 2020.

More on news:

  • The govt. also withdrew the 2019 versions of the Bills, which were introduced and then referred to the Parliamentary Standing Committee on Labour. 
  • The three Bills are part of the government’s labour law reforms agenda, of which the first, the Code on Wages, which proposes universalisation of minimum wages, was passed by Parliament last year. 
  • The government had announced its plan to amalgamate 44 central labour Acts into four codes in 2014, with the aim of simplifying the laws and ensuring a conducive and harmonious environment for doing business.

Constitutional background

  • Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre. 
  • Article 23: Traffic in human beings and begar and other similar forms of forced labour are prohibited
  • Article 24: No child below the age of fourteen years shall be employed to work in factories, mines and other hazardous occupations.
  • Article 39 (d): “The State shall, in particular, direct its policy towards securing; that there is equal pay for equal work for both men and women
  • Article 43A directs the state to take steps to ensure workers participation in management of industries.

The Industrial Relations Code Bill, 2020

  • Definition of ‘strike’ is also being amended to include ‘mass casual leave’ within its ambit. Concerted casual leave on a given day by 50% or more workers will be treated as strike. 
    • However, a proposal in the original version of the Code to bar outsiders from becoming office bearers of trade unions has been omitted in the revised draft.
  • Restricting the rights of workers to strike: No person employed in an industrial establishment shall 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.
    • At present, a person employed in a public utility service cannot go on strike unless he gives notice for a strike within six weeks before going on strike or within fourteen days of giving such notice.
    • Govt’s rationale: The notice period gave the two parties a chance to resolve the dispute.
  • The IR code has expanded to cover all industrial establishments for the required notice period and other conditions for a legal strike.
  • The Bill will allow companies with up to 300 workers to fire workers without prior approval of the government, a three-fold jump in threshold. 
    • Currently, only those industrial establishments with less than 100 employees are permitted to hire and fire their staff without permission of the government.
    • Govt.’s rationale: Firms need to be provided flexibility in order to deal with the vicissitudes of business cycles.
  • Raising the threshold for requirement of a standing order: This implies industrial establishments with up to 300 workers will not be required to furnish a standing order, a move which experts say would enable companies to introduce arbitrary service conditions for workers.
    • The provision for standing order will be applicable for “every industrial establishment wherein three hundred or more than three hundred workers, are employed, or were employed on any day of the preceding twelve months”.
  • Provisions on fixed term employment 
    • It introduces provisions on fixed term employment.  
    • Fixed term employment refers to workers employed for a fixed duration based on a contract signed between the worker and the employer.  
    • Fixed term employment may allow employers the flexibility to hire workers for a fixed duration and for work that may not be permanent in nature. 

Background:

  • The Standing Committee on Labour had also suggested hiking the threshold to 300 workers, noting that some state governments like Rajasthan had already increased the threshold and which, according to the Labour Ministry, has resulted in “an increase in employment and decrease in retrenchment”.
  • It had recommended against the expansion of the required notice period for strike beyond the public utility services like water, electricity, natural gas, telephone and other essential services.

The Social Security Code Bill, 2020

  • Social security funds for unorganised workers, gig workers and platform workers: It also proposes to empower the centre to constitute a social security fund for provision of social security for the unorganised workers, platform workers or gig workers or any such class of workers.
  • National Social Security for gig workers and platform workers:It proposes 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.
  • It proposes to form a National Social Security Board that would recommend suitable schemes for the different sections of unorganised sector workers.
  • The Social Security Code will extend the scope of the Employees State Insurance Corporation to all 740 districts in the country and that of the Employees’ Provident Fund Organisation to all institutions with 20 or more workers as well as the self-employed. 
  • Changes in definitions:  The 2020 Bill changes the definitions of certain terms in the Code.   These include: 
    • expanding the definition of ‘employees’ to include workers employed through contractors, 
    • expanding the definition of “inter-state migrant workers” to include self-employed workers from another state, 
    • expanding the definition of “platform worker” to additional categories of services or activities as may be notified by the government, 
    • expanding the definition of audio-visual productions to include films, web-based serials, talk shows, reality shows and sports shows, and 
    • exempting construction works from the ambit of “building or other construction work” if the total cost of construction work exceeds Rs 50 lakhs (and if they employ more than a certain notified number of workers).

The Occupational Safety Code Bill 2020

  • It proposes to allow the women employees to work at night, subject to the conditions relating to safety, holiday, working hours and their consent.
  • Daily work hour limit:  The 2020 Bill fixes the maximum limit at eight hours per day.
  • Inter-state migrant workers and unorganized workers
    • It proposes to subsume the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, which has been highlighted during the recent migrant workers crisis due to COVID-19, along with 13 other Acts.
    • While the Act covered those migrant workers who were hired through contractors, the Code covers those who are directly employed as well. 
    • Database for inter-state migrant workers:  The 2020 Bill requires the central and state governments to maintain or record the details of inter-state migrant workers in a portal.  
      • An inter-state migrant worker can register himself on the portal on the basis of self-declaration and Aadhaar.
    • Benefits for inter-state migrant workers:  The 2020 Bill provides for certain benefits for inter-state migrant workers.  These include: 
    • (i) option to avail the benefits of the public distribution system either in the native state or the state of employment, 
    • (ii) availability of benefits available under the building and other construction cess fund in the state of employment, and 
    • (iii) insurance and provident fund benefits available to other workers in the same establishment.

Benefits

  • The Industrial Relation Code Bill 2019, Occupational Safety, Health And Working Conditions Code, 2020 and the Code On Social Security, 2020 will accelerate labour reform and improve ease of doing business.
  • The codes will give flexibility to firms in hiring and firing, in closing units, reduce trade union influence in companies, and pave way for state level labour reforms

Concerns 

  • The increase in the threshold for standing orders will affect the labour rights and  bargaining power for workers in small establishments having less than 300 workers.
  • Elongating the legally permissible time frame before the workers can go on a legal strike, making a legal strike near impossible.
  • The design and coverage of the social security fund is unclear.
  • Portability of benefits of migrant workers needs to be ensured. The Bill does not provide a framework for this.
  • Given the temporary nature of workers in the gig economy, there are question marks over social security for them.

The initiatives in the bills which include widening the ambit of social security by including inter-state migrant workers and gig economy workers are steps in the right direction. However considering the extent of economic distress in the country, concerns of labour must be placed at the centre of such policy initiatives. 

After reading this article, answer the following question for Mains answer writing practice. Also you can get your answer checked free of cost by clicking on the following link.

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Q) Critically analyse  the key provisions of the  Social Security Code, 2020. (150 words)