Article (January-2021)


New Labour laws will make doing business more easier

H.L. Kumar

Designation : -   Advocate, Supreme Court

Organization : -  New Delhi


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This is for the first-time structural changes have been brought about by codifying some 29 labour laws (yes, the number of subsumed Labour Acts is 29 and not 44 as was being said earlier) into four Labour Codes. The Labour Law Reporter (LLR) has been advocating for more than a decade that plethora of labour laws have been like the proverbial heaven, which is neither good for Gods nor men. Similarly, these laws have neither benefitted workers nor employers. These laws have certainly increased corruption and the Inspector Raj wrought havocs to the growth of business or industry. Therefore, this is the time when these changes should be welcomed as they will pave the way for further improvements in future.

Again, this is for the first time that the atmosphere for 'Ease of Doing Business' will be heralded, which has been absent all through and precisely because of this reason there have not been much investments in India. There is an intricate link between investment, employment, and growth. If there is no investment, how can there be employment generation and growth in the economy? Thus, all four Labour Codes, despite some drawbacks here and there need to be accepted as they are. It was being felt for a very long time to reform the Labour Laws. A Labour Commission was set up some two decades ago under the chairmanship of a veteran Ravindra Verma, which submitted its report, but it was not even discussed because the leaders were even afraid of touching this sensitive issue, which ultimately resulted in huge loss to employment and growth of the economy.

Let us first know what the four codes which have been enacted are and their repercussions. On September 23, Parliament passed three labour code Bills, Code on Wages was already passed in the year 2019 itself.  The three Codes are the Industrial Relations (IR) Code, the Occupational Safety, Health and Working Conditions (OSH) Code, and the Social Security Code, along with the Code on Wages, 2019. All the Codes deal with wages, industrial relations, and social security, safety, and welfare conditions. There is no denying that the provisions in the Codes are more for the welfare of unorganised sector workers, including gig economy workers. The coverage under the Social Security Code is to be extended to all categories of workers. Even the Construction sites employing more than 10 workers will be covered under the Code. Factories employing more than 20 persons are obliged to implement Provident Fund clauses, The Code, therefore, makes categorisations based on the number of workers engaged and employed for the coverage of the benefits.

Under the OSH Code, 13 pieces of legislations have been amalgamated. The labour inspector cannot make surprise inspections. This will certainly be helpful in ending the tyranny of corrupt government officials. Any health survey in establishments will be conducted after giving notice in writing to the employer. It applies to factories employing 20 workers (with power) and 40 workers (without power). The Code gives a fillip to the engagement of contract labour by granting an all-India licence for five years to a contractor hiring such labour. The introduction of "inspector cum facilitator" is going to be labour friendly.

Employment of Women

These Codes will spur the new employment opportunities for women. The OSH Code says women will be entitled to all kinds of work, including mining, before 6 a.m. and beyond 7 p.m., with their consent. Where potentially dangerous and hazardous work is involved, the appropriate government is expected to direct the employers to provide safeguards. The implementation of the notion of "working with their consent" is meant to provide them the freedom to work. Women are already working in large numbers in agriculture as farm labour and in non-agriculture services such as construction at low wages but now they will have more bargaining power. By opening all sectors to women, the Code aims at encouraging the employment of women even in modern-day sweat shops.

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