A Liberal Labour Market

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