{"id":49707,"date":"2019-07-13T12:33:23","date_gmt":"2019-07-13T07:03:23","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=49707"},"modified":"2019-07-13T12:33:36","modified_gmt":"2019-07-13T07:03:36","slug":"answered-the-consolidated-codes-on-labour-laws-to-simplify-and-consolidate-labour-rules-and-laws-is-need-of-the-hour-comment-discuss-the-need-of-labour-reforms-in-india","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-the-consolidated-codes-on-labour-laws-to-simplify-and-consolidate-labour-rules-and-laws-is-need-of-the-hour-comment-discuss-the-need-of-labour-reforms-in-india\/","title":{"rendered":"[Answered] \u201cThe consolidated codes on labour laws to simplify and consolidate labour rules and laws is need of the hour\u201d. Comment. Discuss the need of labour reforms in India."},"content":{"rendered":"\n
Demand of the question<\/strong>
Introduction. <\/strong>Introduce with Code on wages bill.
Body. <\/strong>Discuss population statistics of various states.
Conclusion. <\/strong>Way forward and solutions. <\/td><\/tr><\/tbody><\/table>\n\n\n\n

To simplify and consolidate labour rules and laws under four codes, the Occupational, Safety, Health and Working Conditions Code, was approved. The Code on Wages Bill seeks to include more workers under the purview of minimum wages and proposes a statutory national minimum wage for different geographic regions, to ensure that States will not fix minimum wages below those set by the Centre. <\/p>\n\n\n\n

Why Simplification and\nconsolidation of labour laws?<\/strong><\/p>\n\n\n\n

  1. Welfare of labour<\/strong>: Labor\nprotection legislation is one of the basic features of welfare state and aims\nat providing social justice. The main aim of such laws should be to create\nmore, safer, and rewarding jobs for the labour. This includes standards on\nminimum wages, working conditions, overtime controls etc. Thus simplification\nof labour laws is must.<\/li>
  2. Numerous laws<\/strong>: For the fulfilment\nof above needs, there are numerous overlapping, rigid and isolated acts (about\n145), which are applicable to firms at any point of time. This gives immense\npowers to public officials and results in harassment of employers. It leaves room\nfor corruption<\/strong> and increases compliance costs in terms of money and time.\nThis type of policy runs counter to above stated desirable objectives. This\nmakes our firms uncompetitive to foreign firms. It is quite apparent from the\nperpetual dismal performance of Indian manufacturing sector.<\/li>
  3. Huge Informal Sector<\/strong>– India have\nabout 85-90 % of the workforce employed in informal sector on which these laws\nare not applicable. These are micro firms employing as low as 5-10 persons.\nThese employers are discouraged to expand their businesses, by such huge number\nof regressive laws. Neither they have understanding of laws to that level and\nservices of Lawyers to ensure compliance is much expensive. Further, huge\nmajority of workforce get no formal training. This results in low productivity\nand low value addition.<\/li>
  4. Entry and exit Barriers for firms and Job\nsecurity for workers<\/strong>– Law for this provides that government approval\nshould be taken before retrenchment of the workers (in case industrial dispute\nact apply). As a rule for good economic environment, there should least entry\nand exit barriers for Firms in any business. But in addition, social security\nof the workers is indispensable. It should be notice that a businessmen will\nscale down his operations almost only in face of losses or in drive of modernisation.<\/li>
  5. Informalisation<\/strong>: Indeed, a major\nweakness of the Indian economy is the \u2018informalisation\u2019 of the economy with\nlarge numbers of workers who have little job security and earn less too.\nMoreover, since contract and casual workers can be easily fired, the inability\nto fire the workers they hire cannot be the constraint on employers growing\ntheir enterprises.<\/li>
  6. Changing technologies<\/strong>: Technologies\nare changing rapidly and automation is leading to loss of jobs. Thus rights of\nworkers for decent treatment, fair wages, and adequate social security need to\nbe taken care of through simple rules and regulations easy to understand. <\/li>
  7. Archaic\nlaws<\/strong>: India\u2019s labour laws are archaic, too many, often contradictory,\nand badly administered. They must be reformed. The reformed laws must suit\nemergent conditions. They must provide more flexibility to employers. Above\nall, they must ensure fair treatment of workers, and provide a wider social\nsafety net. Reforms must be made with consensus amongst workers and their\nunions, and employers and their associations. <\/li><\/ol>\n\n\n\n

    Labour\nreforms- are they the need of the hour?<\/strong><\/p>\n\n\n\n

    1. Complex law system-<\/strong> Under the Constitution of India, Labour is a\nsubject in the concurrent list where both the Central and State Governments are\ncompetent to enact legislations. As a result, a large number of labour laws\nhave been enacted catering to different aspects of labour e.g occupational\nhealth, safety, employment etc.  Therefore,\nthere are 44 labour legislations at central level and almost four times of them\nat State level. As a result, it created a lot of redundancy and loopholes in\nthe legal system which paves way to exploitation of labour. Implementation of\nthis complex system of laws has also become a challenge to limited number of\nLabour Enforcement Officers in India. <\/li>
    2. Labour exploitation-<\/strong> Because of the predominantly heavy handed labour\nregulations (also called as Inspector Raj) with exploitable gaps, the MNCs and\ndomestic organizations have resorted to alternate ways i.e. employing contract\nlabours at less than half the payroll of a permanent employee. India has 94% of\nits workforce in its unorganised sector. With a second highest workforce of 487\nmillion workers (next to China), Indian GDP is grossly undervalued. This 94% of\nunorganised workforce accounts for 57% of GDP while the remaining 43% comes\nfrom the meagre 6%. This huge workforce getting trapped in unorganised sector\nis largely attributed to our stringent labour laws. Thus labour reforms are\nneeded.<\/li>
    3. Impact of delay of labour reforms<\/strong>: The Labour Reforms if not implemented soon, it\nwould take a gross hit on India as an investment destination. Also it would\nincur huge loss to the economy due to undervalued GDP production. This reflect\nthe dire need for reforms. The other reason we quoted was economic loss. The\ndata shows that 94% of Labour force in India is in unorganised sector and that\nshows how grossly Indian GDP is undervalued. This is so because the income of\nthese people in workforce is very much less than the permanent workforce for\nthe same output. The improper regulations coupled with complexity have led to\nmisuse of vast Labour of India. <\/li>
    4. Issue of contract labour-<\/strong> One of the main reason for labour reforms is the\nconcept of contract labour. Trade Unions suggest that this concept itself\nshould be removed. There is stringent hiring and firing process defined in\nIndustry Disputes Act. It makes it mandatory for the organization to seek\nGovernment permission before removing an employee. <\/li><\/ol>\n\n\n\n

      This\nhighly regulated firing process would motivate Employers and MNCs to hire contract\nlabour. Balancing this has become a challenge to Government. Easing of firing\nrules would also have a detrimental effect on collective bargaining power of\nemployees as it makes easier for employers to fire the employees and harass\nthem in the event of encouraging the union formations. But on the other side,\nhaving a strong labour policy would make the nation a more socialist country. Thus\nlabour reforms are needed.<\/p>\n\n\n\n

      Simplification and rationalisation of labour laws will require examination of labour laws individually. If necessary, certain laws may be considered for being repealed. A consensus will have to emerge from the stakeholders regarding this. Similarly, few common definitions can be provided for things like classification of work force etc. Also the wage difference between contract and temporary should have a ceiling. <\/p>\n","protected":false},"excerpt":{"rendered":"

      Demand of the question Introduction. Introduce with Code on wages bill. Body. Discuss population statistics of various states. Conclusion. Way forward and solutions. To simplify and consolidate labour rules and laws under four codes, the Occupational, Safety, Health and Working Conditions Code, was approved. The Code on Wages Bill seeks to include more workers under… Continue reading [Answered] \u201cThe consolidated codes on labour laws to simplify and consolidate labour rules and laws is need of the hour\u201d. Comment. Discuss the need of labour reforms in India.<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49132,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-49707","page","type-page","status-publish","has-post-thumbnail","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/49707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=49707"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/49707\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49132"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=49707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}