Labour rights are in free fall

Context: The recently abrogated labour laws by the states are undemocratic means of taking out reforms especially during times like COVID. Also, these elements of labour law dilution were already visible in the four labour codes aimed at consolidating 44 central labour laws.

The need for relaxing labour laws

• Improvement in “ease of doing business” index and enthusing domestic private capital.
• Revitalizing the “Make in India” programme.
• Opportunity for enticing FDI relocating from China.

Problems with the recent relaxation

• Undemocratic manner: Promulgating ordinance without tripartite discussion.

• Extension of a workday up to 12 hours: no provision for overtime pay (Madhya Pradesh and Gujarat)

• The Code on Wages, 2019 already proposed extension of a workday by one hour (from eight  to nine hours) 

• Lowered wages: The Code of Wages Act 2019 provides for Minimum Wage (Rs 375 per day) and National Floor Wage (Rs176 per day), but the state governments are directed to set their minimum wage only above national floor wage diluting the idea of the minimum wage.

• Hire and fire at will: Exemption to employer form complying with the Industrial Disputes Act 1947.

• Degraded version of inspector Raj: inspector-cum-facilitator overlooks violation of the law and is mandated to only advise and provide information.

• The wages code eroded the inspection mechanism by taking away the power of inspectors to conduct surprise checks. 

• Unions destroyed: Strikes/lockouts and trade unions would cease to exist in line wot Industrial Relations Code 2019 which increased the threshold for trade union from 15% to 75%.

• length of suspension of these labour rights: Vary from 1,000 days (M.P.) to three years (U.P.). 

Past experience and their effect:

• Reduced cost of borrowing done with the help of RBI went in vain.
• Reduction in corporate tax made no impact in boosting private capital.
• Banking on private investment for economic recovery is essentially futile during these times.

Way Forward: The timing and nature of the reforms expose the authoritarian nature of the state. The plight of the migrants and industrial disasters like that in Visakhapatnam might engulf a larger section of society. There is a need to see interconnections and resist unitedly.