A Liberal Labour Market

Business Standard     22nd September 2020     Save    

Context: Last week, three Bills comprising three-fourths of a comprehensive labour code were re-introduced in Parliament.

Major changes by the new codes

  • Management and hire of contract workers:
  • Allows direct fixed-term employment in ‘core’ activities: under the Code on Industrial Relations Bill 2020, despite the prior judicial rulings against such employment. 
  • Code on Occupational Safety, Health, and Working Conditions Bill, 2020 allowed certain exemptions to the prevention of the hiring of contract workers in “core” tasks.
  • Single license: contract employers will be able to apply for a single, five-year licence rather than relying on a different licence for  each work order.

Concerns

  • In implementation: For E.g.  the proposal for an independent authority to determine core activity may lead to delays and corruption.
  • In Applicability: 
  • How widely new contract labour regulations will be applicable is not clear
  • Threshold has been raised from 20-worker organisations to those with 50. But it is not yet clear about whether there will be no regulation for those with less than 50.
  • No provision of compensation for retrenchment.
  • Discrepancies in Union versus State laws: Discrepancies between the labour codes at the Union level and those now being passed by states.

Conclusion

  • Bring in uniformity: 
  • It is essential to bring state governments on board to ensure that they modify their statutes to be uniform with the Union’s laws. This will ensure uniformity.
  • For enhancing the ease of doing business this uniformity in laws is essential
  • Self-certification to solve delays and corruption: Self-certification of “core” activities by companies, alongside fines for mis-specification. This will reduce delays and corruption