“By labour is meant the economic work of man, whether with hand or head”
– Prof Marshall
INTRODUCTION
According to the Indian Constitution, “Labour” is included in the concurrent list, allowing both, the Centre and the states to establish and amend laws on the subject. The concept of labour law has always been a fluid field that changes with time and context. Due to the onset of the COVID-19 pandemic, this year has been a challenging year for both, labour and employers. The government implemented a nationwide lockdown last year, which had a negative impact on economic activities and resulted in migrant labours fleeing to their homes in the hinterland.
It is tough to strike a balance between the interests of businesses and labours. Many labour regulations were enacted decades ago when enterprises were operating under completely different conditions. These laws have long been in desperate need of revision. The government has attempted to satisfy this requirement by bringing together 29 current legislations into four codes; Code on wages 2019, The Industrial Relations Code 2020, the Social Security Code 2020, and the Occupational Safety, Health, and Working Conditions Code 2020, and a number of amendments have been made in these codes.
Labours rights such as mandatory health check-ups, home visits, and emergency relief are all mentioned in these new rules. It has undoubtedly broadened its scope to include services that benefit unorganized workers and gig workers. Nevertheless, it is debatable whether enacting these labour regulations will be a game-changer or if the government has simply merged the current legislations?
Real change or just a converge?
While these codes have their benefits, they also have several challenges and drawbacks that cannot be overlooked.
- Labours at the mercy of corporate
Firms with up to 300 employees can now fire and hire without the approval of the government under new labour regulations. Previously, the maximum number of employees was set at 100. Establishments with fewer than 100 employees were not required to seek government clearance before hiring or firing an employee, but The Industrial Relations Code Bill, 2020 proposed raising the limit from 100 to 300. This means that over 90% of the country’s workers would be defenceless, furthering the interests of the hire-and-fire system.
Also, the employer can now issue standing orders for subjects other than those specified in the schedule. Before the new Code, employers were required to post standing instructions in a language that the majority of employees could understand. That criterion is no longer applicable.
These reforms undeniably give employers more hiring and firing flexibility, but they also expose workers to risk. This is a full dismantling of job security. Additionally, the Code does not mention work opportunities, and no actions have been taken to help improve these opportunities.
- Straitjacket Freedom of speech
‘Strike’ is mentioned under Section 2(q) of the Industrial dispute act, 1947, which occurs when a large number of labours refuse to work. Labours grievances are the most common reason for a strike. The new Code prohibits strikes in all industrial establishments without notice. No unit may strike in violation of the contract without giving 60 days’ notice, or within 14 days of giving such notice, or before the expiration of any period specified in the strike notice. Also, no strike should occur during any conciliation processes or within seven days of their end, during proceedings before an industrial tribunal or within 60 days of their resolution, or during arbitration proceedings. Only public utility services were subject to such restrictions under the 1947 Industrial Disputes Act, whereas the new Code applies to all establishments.
Furthermore, this Code elongates the legally permissible time frame before the workers can go on a legal strike, making a legal strike nearly impossible. The freedom to strike has been restricted in various ways, workers will face penalties simply for organizing or participating in a peaceful strike if the approval is not sanctioned by the government. The imposition of such sanctions on legitimate strikes is a serious violation of the norms of freedom of association as per Article 19(1)(c) of the Indian Constitution.
International Labour Organization (ILO) has determined that the right to strike is necessary and inherent to the right to organize. With this restriction, the Code takes away a weapon that was earlier used to strengthen the bargaining power of workers. Employer-created dummy unions will gain validity as a result of such rules, and authentic worker voices would be stifled.
- Foggy Specifications
The majority of definitions in this Code are ambiguous. It is particularly distressing to note that definitions have not been revised to specifically determine whether a worker belongs to the organized or unorganized workforce. Gig and platform workers, for example, are not considered unorganized workers, despite the fact that millions of Indians work in this capacity.
While categorizing workers is often helpful in protecting vulnerable segments of the workforce, interstate migrant workers should have been mentioned as a separate category, with the establishment of a sizable Welfare Fund. Given the recent distress experienced by such workers, it is shocking that no provisions have been established for migrant workers who face very specific vulnerabilities. There isn’t even a mechanism for social security portability that accounts for their constant migration inside the country. To put it another way, there is no provision for a “social security floor” protection.
- No Judicial Framework
This Bill prohibits civil courts from hearing any of the cases related to this Code. The Bill provides for the notification of an administrative appeal authority in cases where persons are aggrieved by official orders, such as the order of the Inspector-cum-facilitator in the case of factories or the termination of a contractor’s licence. The Bill does not include a judicial framework for resolving disputes. By this way, workers will be denied access to proper justice. It could be argued that the Bill’s prohibition on civil courts hearing cases could prevent aggrieved parties from challenging certain issues in a lower court.
What can be done
Firms that hire less than 300 workers now have complete discretion in hiring and firing. The reformed laws should suit emergent conditions, and instead of providing all the flexibility to employers, the laws should be amended in a way that helps labours instead of exposing them to risks. Also, a national policy for domestic workers needs to be brought in at the earliest to recognize their rights and promote better working conditions.
Apprenticeship is something that should also be supported. The government should form National Apprenticeship Corp. by merging the Regional Directorate of Skill Development and the Entrepreneurship and Board of Apprenticeship Training to achieve the objective of training apprentices and finding jobs through an exclusive job portal.
Both, IMF and OECD have conducted studies that show a strong relationship between bargaining power and the rise or fall of inequality. The weaker the bargaining power, the greater the country’s inequality. It is vital that strike, which is a cornerstone of bargaining power and the collective bargaining process in India, is not swept aside by a zealous and insidious bureaucracy for collective bargaining to have any hope in India.
To apply this Code effectively and to avoid any confusion, the ambiguous definitions should be rectified. Furthermore, the Centre must establish a portal for unorganized sector workers to register so that they can acquire formal recognition and their rights are not jeopardized.
The prohibition on civil courts hearing matters under the Code may prevent aggrieved parties from challenging certain problems in a lower court. Therefore, a recourse should be provided by which the workers can initiate a civil lawsuit in order to seek redress against the Inspector’s directives. After that, an appeal can be made with the High Court and finally with the Supreme Court.
A Silver lining
Simplification of numerous labour laws into four codes is a laudable initiative. The Code has numerous benefits and drawbacks. These Codes will enable entrepreneurs to operate their businesses considerably more freely because of the increased worker threshold and the easing of restrictions on hiring and firing. However, the new reforms seem to be a paradox when it comes to justifying the basic rights of the labours. As long as their rights are preserved, this simplification or codification of the laws is justified. The government should ensure that these new suggested codes do not violate any labours rights.
In order to achieve the goals of simplifying existing labour laws, improving India’s ranking in the World Bank’s Ease of Doing Business Index, and increasing regulatory compliance by businesses, the balance between economic growth and labours’ rights must be maintained.
Though the concept has significant flaws, as explained above, it will surely outperform them all once the ideal framework is implemented after addressing all the issues.
Dipti Tharwani and Satyam Batra, 3rd-year students at Institute of Law, Nirma University.
Picture Credits: Dreamstime
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