Why labour law rejig is no reform

Context: There is a need to adopt efficient labour laws to achieve greater flexibility to businesses and industries to provide employment to returning migrants.

Inefficiency of labour Laws

• Rigid labour laws , with vague provisions, restricts mobility and gives discretionary power to the executive.

• Prior approval from labour authorities  (firms with more than a 100 employees). 

• The Industrial Employment (Standing Orders) Act, 1946  instructs employers to seek permission to even reassign an employee’s tasks.
• Existing laws protect only a small proportion of the Indian workforce. 

Flawed Labour Law Reform Process

• Rajasthan: Labour law reforms like Relaxed retrenchment and hiring of contract workers and stringent trade union registration process will result into reduction in the wage growth and state’s GDP growth and rising unemployment.
• Madhya Pradesh: Replacement of labour inspectors with a third-party certification will make firing workers become much simpler.
• Uttar Pradesh:  Except for the Building and Other Construction Workers Act, Bonded Labour System (Abolition) Act, and Section 5 of the Payment of Wages Act (which gives workers the right to receive timely wages), all other laws were deleted for the next three years for all firms. 

Need of the hour

• Proper legislative process: States should not dissolve necessary provisions of the labour laws through state ordinances as labour is a concurrent subject.
• Discard 12-hour shift: promote shorter work hours and an increase in shifts, which would then distribute employment.
• Misplaced Optimism: India could replace trade with China by improving its ease-of-doing-business and tackling issues of poor contract enforcement, shortage of skilled labour, and an unstable tax structure and not only by labour reforms.

Discretionary power of state governments to use a weak moment in national history to push through hurried and sweeping measures will only undermine worker safety and distort our labour institutions further.