Dilution Without Adequate Deliberation

Context: There have been concerns with the recent replacement of 3 Bills related to labour laws.

Labour Reforms in India:

• Rationalization of labour laws: Last year, the government introduced four labour codes as Bills to replace 29 existing laws. These four codes are:

• Code on Wages – passed by the Parliament last year.

• Code on Occupational Safety, Health and Working Conditions

• Code on Social Security

• Code on Industrial Relations

Issues with the recently replaced bills 

• Reducing the support to small enterprises: The 2020 bills raises several thresholds excluding the small enterprises from the ambit of the labour laws and subsequent protections.

• The Factories Act of 1948 de?nes any manufacturing unit as a factory if it employs ten workers (and uses electricity) or 20 workers (with out using electric power). 

• These thresholds are being raised to 20 and 40 workers, respectively.

• The Industrial Disputes Act of 1947 requires any establishment employing over 100 workers to seek government per­ mission before any retrenchment;

• The threshold has been raised to 300, with the government empowered to raise it further through noti?cation. 

• The Industrial Employment (Standing Orders) Act of 1946 requires employers to formally de?ne conditions of employment under them if they have at least 100 workers. 

• The 2020 Bill has increased this threshold to 300 workers.

• Providing power to the government: to exempt establishments from any or all of their provisions.  

• The government may, in the public interest, exempt any new industrial establishment from the provisions of the Code on Industrial Relations.

• The Code on Industrial Relations governs working conditions, trade unions, retrenchment and layo?s, dispute resolution, and establishes industrial tribunals. 

• Exemptions in the Code of Occupational Safety, Health and Working Conditions:

• The 2020 Bill allows the State government to exempt any new factory from its provisions in the interest of increased economic activity and employment generation.
• Given that every new factory would lead to incremental employment, this gives wide discretion to the State government to exempt new factories from basic safety and welfare norms.
• Delegation of essential features of law to Rules: the government will prescribe certain laws through Rules. Examples of delegated items include 
• Setting the thresholds for application of various social security schemes, 
• Specifying safety standards and working conditions and 
• The power to increase the threshold for establishments that have to seek permission before retrenchment.

• Bias against contract labour - 

• Increasing the threshold: The 2019 Bill was applicable to establishments which employed at least 20 contract workers and to contractors supplying at least 20 workers; these thresholds have been raised to 50 workers.

• Prohibits employment in core sectors: and speci?cally permits employment in a speci?ed list of non-core activities including canteen, security and sanitation services. 

• Ignoring Women’s safety: The 2019 Bill on Occupational Safety allowed the government to prohibit the employment of women in undertaking operations that could be dangerous to their health and safety. 
• The 2020 Bill removes this power to prohibit employment and instead al lows the government to require employers to provide adequate safeguards. 

• Inadequate deliberations: These Bills have 411 clauses and 13 schedules and come to 350 pages, and the time allotted for its discussion has been only 3 hours.

Conclusion: It is important that there is wider scrutiny and public discussion on these Bills and should be referred to the Standing Committee since it affects every person working in India.