The Shaky Foundation Of The Labour Law Reforms

Context: It could be a long wait before employers and workers enjoy the so-called benefits extended by the labour codes.

Background: Government of India enacted the Code on Wages in August 2019 and the other three Codes, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code and Code on Social Security (CSS) in September 2020.

Issues regarding labour law reforms

• A rushed undemocratic exercise: Government in tearing hurry in carrying out reforms.
  • Lack of consultations: Government held only symbolic and partial consultation with the central trade unions.
  • Legislative impasse: Three codes were passed in Parliament when the Opposition parties boycotted the proceedings.
• No thrust on implementation of the gazetted reforms:
  • Draft rules incompletely framed under all the codes: E.g. Rules regarding recognition of central trade unions have not been framed so far.
  • States remain unprepared: According to Simpliance website data - 
    • Major States such as Tamil Nadu, Kerala, West Bengal, Maharashtra, Haryana and Delhi have not issued the draft rules under any codes.
    • Karnataka, Gujarat and Jharkhand have framed Rules for the Code on Wages and the Industrial Relations Code.
  • No clarity on minimum wages: Government has constituted a committee and shifted the base year without any clarity on minimum wages implementation.
• The non-statutory floor level minimum wage remains a meagre ?178 still even as Wholesale Price Index-inflation rates have galloped to 12% in June 2021.
• Unabated safety concerns: The incidence of major industrial accidents has remained undiminished even during the COVID-19 period.
  • IndustriAll reported that between May to June 2021, 32 major industrial accidents occurred in India, killing 75 workers.
• Condition of labour worsened by state inaction amidst pandemic: Government’s relief measures to workers, especially unorganised and migrant workers, are too meagre to make any difference. 
  • No direct benefit transfers: Government did not implement the widely endorsed measure of direct benefit transfer, at least for low-income families.
  • Government has failed to provide legal visibility to millions of unorganised and migrant workers, even after decades, and despite direction by the highest court in the land.

Conclusion: Despite gazetting four Codes, employers and workers cannot enjoy any benefits extended by the codes. They reflect poorly on the governance abilities of the governments and the countervailing power of the Opposition parties.