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The New Labour Codes: A Boon Or Bane

The New Labour Codes: A Boon Or Bane

In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right-to-work.’ It provides no ‘rights’ and no ‘works.’ Its purpose is to destroy labor unions and the freedom of collective bargaining. We demand this fraud to stopped. — Martin Luther King Jr

In recent times we need to regulate and reorganize labor laws. (which were on many occasions term antiquate by the current regime) was felt very much obligatory. It has also turned into a much more protuberant issue post-Covid-19 lockdowns. As the whole nation witnessed immigration and suffering. Of migrant laborers, which was never seen before post the era of partition.

This calamity gave the government a golden opportunity to regulate the rights and interests of both the employer and employee and to bring the countries labor legislation at par with the requirement of a modern industrial state.

The first difficulty before the government was the unification of the various labor laws. The 2nd national commission of labor has pointed out that there are various legislations on the same subject which makes the compliance of law difficult[1].

They pointed out that there should be uniformity in the law. Keeping this in mind the central government codified 29 labor legislation in four codes named as- (i) Wages, (ii) Industrial Relations, (iii) Social Security, and (iv) Occupational Safety, Health and Working Conditions[2].  These codes can ensure uniformity of law and easy compliance which would be helpful for both the employers and employees.

Contents  hide 

1 Exemption provided to small industries

2 NEW CODES

3 Older labor legislation

4 Trade Unions

5 Reference

5.1 Related

Exemption provided to small industries

The next issue is an exemption provided to small industries from labor regulation. It was argued that compliance with labor laws is a very absorbing task that gives small industries an incentive to remain small[3]. This is a long-term cycle that would affect the industrial capacity of the whole country. Further, these laws only applied to the organized sector which employs only 7% of India’s labor force[4].

To deal with these issues, the government has increased the threshold limit of employed workers in the new code with respect to industries upon which the new law applies. The labor codes on wages and industrial relations apply to all industrial establishments with certain exceptions [5]. But a great amount of exception is provided in the matters of social security and occupational safety. It continues to apply to an establishment that employs a certain threshold of labor [6]. It was further provided in the new code that safety measures will continue to apply to hazardous industries irrespective of their size[7].

NEW CODES

All these changes may seem astonishing at first glance, but the biggest achievement of the new codes was the inclusion of labor of unrecognized sector in the protective net of social security[8]. This move will ensure the welfare of the unorganized sector workers, who suffered the most at the time of the COVID-19 pandemic.

Another major issue in the matter of labor legislation is the stuff of layoff and retrenchment. The 2nd N.C.L points out in its recommendation that the threshold limit for applicability of this aspect of legislation must increase. According to the committee, it should be increased from 100 to 300 which would provide exception and breathing space to middle-stranded industries as compliance of these laws for such industry are quite tough[9].

Further, in 2009, the Standing Committee on Labour has also recommended that the notice period for layoff and retrenchment must be increased which will ensure equal footing for both the employer and the employees[10]. But the new code has only accepted that recommendation which is for the betterment of the employer and not the employee. It does not increase any notice period or compensation for such layoff but it does increase the threshold limit to 300 for the application of the law[11].

Older labor legislation

The New Labour Codes: A Boon Or Bane – An additional issue in the older labor legislation was compliances and the huge number of reports which must be filled on every occasion was too hectic for an establishment. It is estimated that an establishment has to deal with more than 31000 compliances and 19000 fillings[12]. The N.C.L recommends that these compliances must restrict and self-certification must be made the new normal.

In the new code, the government has accepted these recommendations and made various enabling provisions. That would limit the number of fillings and new compliances. Although various compliances related to social security matters and insurance must be done separately the new code has minimized the complications of the compliance provision[13].

In the matters of contract labor as well, the new code has also increased the threshold limit. Now the contract labor can only be employed in those industries where more than 50 workers have been employed. Further in the matters of core work of employment the contract labor cannot be employed[14].

Further, in matters of social security, the responsibility has imposed upon the principal employer rather than the contractor. This will ensure the welfare of the contract labor as the principal employer has a Havier pocket than the contractor[15].

Trade Unions

In the matters of a trade union, the government recognized the problem of too many trade unions. Hence, they developed the concept of negotiation union. These unions will be constructed only in those circumstances when the number of workers of an establishment in a particular union is 51%. Otherwise, a negotiation council will form. But the new code limits the power of the strike, as a notice of 14 days made compulsory. Furthermore, in the case when a dispute is before a tribunal then the laborers cannot go on a strike unless the matter is resolved[16].

Hence, although the new labor codes made with the intention of making labor legislations less complex. The government has with the help of new codes took away many rights of the labor. The new codes were much more favorable to the employers. The new codes have taken away the power of the collective barging from the hands of the labor. These legislations have also restricted the rights of the labor in matters of retracement and layoff.

In essence, this legislation in the name of the right to work and availability of work. Has taken away the basic rights of the employee. In this scenario, the words of Martin Luther King Jr. seem very much true. These legislations are becoming a façade on the rights of labor in the name of the modernization of labor codes.

Reference

The New Labour Codes: A Boon Or Bane


[1]. Report of the National Commission on Labour, Ministry of Labour and Employment,2002, (visited on 03/1/2021) http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.   

[2] Overview of Labour Law Reforms, PRS LEGAL, (visited on 12/12/2020) prsindia.org/billtrack/overview-labour-law-reforms

[3] “Reorienting policies for MSME growth”, Economic Survey 2018-19.

[4]Supra note 3.

[5]Ibid.

[6]Ibid.

[7] “Report No. 1: Industrial Disputes (Amendment) Bill, 2009”, Standing Committee on Labour, December 9, 2009.

[8]Supra Note 1.

[9]Supra Note 2.

[10] “Ease of doing business?”, The Print, July 8, 2020, last accessed on September 17, 2020.

[11]Supra Note 2.

[12]Supra Note 1.

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