The road to rolling out labour codes

Source: This post is based on the article “The road to rolling out labour codes” published in The Hindu on 14th Jul 22.

Syllabus: GS3 – Economy – Industrial policy and growth

Relevance: Labour codes and related issues

News: The Code on Wages (passed in Parliament in August, 2019), the Industrial Relations Code, the Code on Social Security, and the Code on Occupational Safety, Health and Working Conditions (all passed on September 22 and 23, 2020 in the Lok Sabha and the Rajya Sabha) have not yet been implemented.

What are the views of various stakeholders?

The Centre claims that the four codes are a major step in the process of labour reforms.

The central trade unions (CTUs) have held three general strikes against the codes so far, alleging that the codes will result in taking away whatever little social and economic security is left in the employment sector.

The farmers’ organisations had also supported the trade unions in their protests.

The employers’ associations, had mixed feeling towards the codes, but had generally welcomed them.

Why the delay in implementation of the codes?

The government says the delay in implementation is due to the delay in framing rules by the States.

As labour is a concurrent subject, both the States and the Centre will have to prepare rules for the codes.

According to a recent report, 24 States have so far published draft rules to all four codes.

What the Centre wants to do?

The Centre intends to implement the four codes together. The Labour Minister has offered discussions with trade unions and representatives of employers to iron out differences, if any.

The SP Mukherjee committee, which is working towards the issue of minimum wages, is yet to complete its task. Setting a national minimum wage is important in the implementation of the Code on Wages.

Social security for unorganised workers is a promise in the Code on Social Security and expansion of ESIC network is an unavoidable step for this purpose.

What are some of the concerns?

The central trade unions in the Opposition camp are opposed to all the four codes.

– Bharatiya Mazdoor Sangh (BMS), is opposed to the Industrial Relations Code and certain provisions of the Code on Occupational Safety, Health and Working Conditions.

According to the Centre of Indian Trade Unions, one of the central trade unions, said the exercise is aimed at pushing out a large section of the workforce out of the coverage of all labour laws.

The BMS has been maintaining that the codes should not be implemented at one go. The differences must be resolved by mutual dialogue. The Govt should implement only those sections and codes where there is a larger unanimity among the workers, employers and the government.

The employers’ associations like Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI) had expressed reservation on the proposal for increasing the minimum wages and expanding the social security network by involving the employers too.

Way forward

The trade unions are warning about more protests if the codes are implemented. They say that the Centre will have to repeal it the way it repealed the three farm laws.

The Centre, too, is worried about the political fallout of its implementation and thus, this could also be a possible reason for the delay.

The employers are worried that a further increase in the salary bill will hamper their profits in a recession-hit economy and they expect the government to hold more discussions.