Context: Government should narrow the gap between organised and unorganised sectors of economy through unified labour code and other inclusive labour reforms.
Labour Code Unification Exercise
Labour is a Concurrent list subject : both the centre and state can legislate labour laws.
Unification of Laws: Governments intent of unifying all statues into labour code (where statute is administered by a specific ministry or department, at the Union or state level) excludes certain statutes from its purview like Apprentices.
Distinction between manufacturing and services laws:
labour laws for manufacturing will be at Union-government level, driven by the Factories Act
Service-related laws will primarily be at state-government level, driven by the Shops and Establishment Act.
State driven exercise for unification of labour code (Article 254(2)) is better than Union-driven changes because of the underlying diversity in labour and employment conditions across states.
Labour Reform Agenda
Minimum International Labour Organization norms followed for everyone irrespective of the distinction of organized and unorganized sector will lead to a drop in wages (or cost of labour) in former and an increase in latter.
Prerequisite for a unified employment code, includes registration system for employers (not just corporate) and employees (excluding domestic help, part-time and agricultural workers).
Bilateral employer-employee relationship, with recourse to government only in case of disputes.
Individual Productivity-based incentives can be extended to the enterprise-level.