Are the new labour bills in India anti-labour in nature?

What are labour laws?

The Indian Context

  • The code on occupational, Safety, Health and Working Condition (OSH & WC code)
  • The Industrial Relations Code
  • The Social Security Code

OSH and WC code

  • This code is relevant for contract workers. It entails that for a firm that has branches across different states, a single license for hiring employees will make the cut. Today, the firms need permissions from individual state governments for the same.
  • The code makes it mandatory for staffing firms to provide mandatory employment letters for all employees while hiring.
  • Under this code, the government will also provide staffing firms with relevant data on migrant workers to improve their employability.

The Industrial Relations Code

The Social Security Code

  • Under this code, the government aims to introduce a voluntary scheme to provide uniform social security to all workers in the country — including the “unorganised workers, gig workers and platform workers”. (~50 Cr)
  • This implies that the workers in the informal economy will have access to medicare, PFs, health and maternity benefits, free annual health check-up etc.

Pros of the bills

  • A lot of labour related financial transactions (minimum wage, digital payment) will now get streamlined and be included in the formal economy. This will lead to improvement in IT returns filing and fewer union strikes.
  • Since these bills centralise a lot of functions, it’ll improve the ease of doing businesses significantly — a charter where the Modi government has done a very impressive job.
  • In a significant first, India stands to have a sophisticated data repository around migrant labourers which will increase the firms’ ease of mapping the worker with the right skill to the right job.
  • Today, 39 Cr. workers of the country are outside the social security allowances. These bills will improve that number significantly.

Cons of the bills

  • There are provisions where the government can exempt certain firms/industries from following these codes if it is in “public interest”. It allows the state government ro make these exemptions if it can increase economic activity in their state. These are subjective terms and increase scope for corruption.
  • In addition to the exemptions, the codes do not apply to certain establishments of smaller size (less than 20 workers) which will lead to a big chunk of workers being left out. While I agree that it’ll be a logistical nightmare to apply all three codes to all firms, it’s important that certain aspects of the codes like mandatory healthcare benefits, provision of social security, etc are covered for all workers irrespective of the firm size.
  • The Industrial Relations code bill requires a 14 days strike/lockout notice from the unions. This will reduce the Union’s bargaining power which is essential for the welfare of their workers.

Verdict

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