Formalizing Labour is the Ideal Way to Provide Worker Welfare

Context: India should simplify its labour laws into a few codes, reduce business compliances and grant all workers an identity for aid.

Impact of COVID on workers:

• Direct Threat: related to the health of the workers and their families.
• Indirect Threat: related to their physical, emotional, and socio-economic well-being.
• Disproportionate Impacts: 
• While the well-off have shifted to Work from Home (WFH), no such facility is available for poor workers
• Among the most deeply affected are women, who hold 70% of all jobs in the health and social care sectors, informal and temporary workers including those in the gig economy.
• Migrants, both domestic and international, have been unable to sustain their jobs.

Responses around the world:

• Immediate Responses: include lockdowns, social distancing, hand washing, and quarantine rules.
• Economic Responses:  includes cash grants and macroeconomic liquidity measures.
• Many European countries, including Denmark, Germany, France, the Netherlands, and the United Kingdom, subsidized companies to keep workers on their payrolls.
• European nations have also actively facilitated job-sharing programmes among workers, reducing the requirement for retrenchment.
• For E.g: Some 10 million German workers stand to benefit from a scheme called Kurzarbeit, which means “short-work”.
• These works sharing programmes appear to address the mental, economic and social impacts of the crisis.
• International Labour Organization’s (ILO) recommendations: The ILO has cataloged responses to COVID-19 by four pillars:
• Stimulating the economy and jobs.
• Supporting enterprises, employment, and incomes.
• Protecting workers in the workplace,
• Dialoguing among the government, workers, and employers to promote solutions.

Challenges to measure taken in India: While India has taken several measures including fiscal and monetary stimulus, they suffer from following challenges:

• Chaotic and Uncoordinated measures: related to the formal and informal labour market.

• The Centre’s response has been largely restricted to repatriation transportation For E.g. though Shramik trains.
• States’ ordinances in violation of the proposed labour codes and ILO:

• Increased the maximum factory work hours per day to 12, and from 60 to 72 hours per week (the ILO specifies a maximum of 9 hours per day and 48 hours per week).
• Extra hours are not eligible for overtime pay.
• Many of them would be struck down under the Principle of Subsidiarity.

• Informalization of Workforce: 

• Only 10% of its labour force makes up the formal labour market.
• Only about 22-25% can be identified and provided specific support, being classified as formal workers.
• They can only benefit from generalized subsidies or direct government-to- resident transfers, rather than as workers.

Way Forward: 

• Provide Financial Identity to the workers: by collating and simplifying labour laws into a few codes and reducing labour compliances at the Centre and in each state,