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Daily Answer Writing And Mentorship Program

31-07-2023

Q: Discuss the major features of the four recently introduced labor codes in India. Also, analyze the potential benefits and concerns related to their implementation. (15 Marks, 250 Words)

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The Indian government introduced four labor codes with the objective of reforming and modernizing the country’s labor laws. These codes aim to streamline and consolidate existing labor regulations, bringing greater clarity and efficiency to the labor market. Each code focuses on specific aspects of labor relations and social security, collectively addressing the challenges faced by both the workforce and businesses in the country.

 

Four Labour Codes:


Code on Wages 2019
1) Floor wage to be fixed by centre.
2) Minimum Wage by Centre/state to be greater than or equal to Floor Wage. The Code provides for universal minimum wage across employments in organized and unorganized sector. Also, periodic revision of minimum wage by centre/state every 5 years.
3) Provision for fixed working hours and overtime wages which is at least twice the normal rate of wages
4) The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature done by an employee.

Code on Social Security 2020

1) to extend social security to all workers both in the organised and unorganised sectors (unorganized workers, gig workers and platform workers)
2) Social Security fund for unorganised workers, gig workers and platform workers will be setup by central government (and separately by state govt)
3) National Social Security Board – for welfare of unorganised workers, gig workers and platform workers
4) Schemes for gig workers and platform workers may be funded through a combination of contributions from central govt, state govt and aggregators.

Code on occupational safety, health & Working Conditions 2020

1) Coverage
a) Factories –
i) 20 Workers + Manufacturing process using power
ii) 40 Workers + Manufacturing process without using power
iii) All establishment engaged in Hazardous activities
iv) Establishment or contractors employing 50 or more workers including contract labour
b) Prohibits use of contract labour in core activities and defines a list of non – core activities where the prohibition would not apply
c) Provides for daily work hour limit at eight hours per day
d) Defines interstate migrant workers; Provides for benefits of interstate migrant workers; Database of interstate migrant workers to be maintained by Centre / states
e) Mandatory annual health checkup to be provided by the employer

Code on Industrial Relations 2020

1) Threshold limit for government approval needed for layoff/retrenchment increased from 100 to 300.
2) Registration of Trade Unions.
3) Sole negotiating Trade Union (with more than 51% of the workers as members).
4) Fixed term Employment.

 

 

Benefits of Labour Codes:

1) Simplification and rationalisation of plethora of laws will lead to better compliance.
2) Fixed term employment – they will get all statutory entitlements, similar to regular workers.
3) Provides for night shifts to women for various works (may increase FLFPR).
4) Social security for – gig workers + platform workers + self-employed.
5) National Social Security Board – to recommend and monitor schemes for gig workers, platform workers,
unorganised workers.
6) Co-operative Federalism – states given power to decide their own minimum wage above floor wage.

Concerns of Labour Codes:

1) Several important features of the labour laws are not specified in the Codes and have been delegated to be formulated by the government through rules. (eg – power to increase the threshold for establishments that have to seek permission before retrenchments).

2) No universalization of social security à only enterprises above certain threshold mandatorily covered (gig workers, platform workers, unorganised sector workers continue to be covered by discretionary schemes.
3) Fixed Term employment may be offered for role earlier given to permanent workers (Code do not restrict the type of work in which fixed term workers may be hired).
4) Wide Discretion to central and state government in providing exemptions from these codes.

 

 

Together, these labor codes represent a comprehensive effort by the Indian government to modernize labor laws, strike a balance between worker protection and business interests, and promote a more inclusive and efficient labor market. However, their successful implementation and impact on the workforce and businesses will require close monitoring and ongoing evaluation to address any potential challenges and ensure the overall well-being of all stakeholders involved.