Labor Law Reforms in India
As important as creating new jobs is,
ensuring those who are already employed are taken care of adequately is another
goal of the government. The new laws mandate a national minimum wage of 176
rupees ($2.50) per hour.
Companies
will not require multiple registrations, the government has proposed one license,
one registration, and one return for establishments. This is a part of a
major labour law
reform proposed in Parliament recently.
The
(OSHW) Occupational Safety, Health and Working Conditions code, introduced by Labor
and Employment Minister has proposed one registration for an establishment.
Importantly,
“OSHW” will bring all establishments hiring at least 10 workers, including
those in services sector, thereby bringing the information technology sector
within its ambit.
The
code covers the ambit of provisions of safety, health, welfare and working
conditions from existing about 9 major sectors to all establishments having 10
or more employees,” an official statement issued by the ministry of labor law compliance in India said.
While
codifying labor laws in
India, labor interests shouldn’t be overlooked
The
compression of multiple labor laws into 4 ‘codes’ or broad categories — wages,
social security, industrial relations and occupational health and safety — forms
a main aspect of the Centre’s labor reforms push since 2015. As part of the process,
the Cabinet recently passed the tabling of the Code on Occupational Safety,
Health and Working Conditions Bill in Parliament, which encapsulates 13 laws.
The Wage Code Bill will be introduced in Parliament soon.
Former
chairman of Niti Aayog Mr. Arvind Panagariya captured the complexities of
India's labor rules in these words, "The labor conditions situation is
incredibly complex: when you go from six workers to seven number in a firm, the
Trade Unions Act kicks in. When you go up from nine to ten, the Factories Act
kicks in. And when you climb from 19 to 20, something else comes in picture, and
it continues. The biggest concern is the Industrial Disputes Act, which says
that if you into a manufacturing firm with 100 workers or more, you cannot terminate
any of them under any situation unless you get prior approval from the
government.
Labor laws rules in
the concurrent list and more than 40 central and 100 state laws govern the
subject. The central government is keen to consolidate the laws into four codes
- wages, industrial relations, social security and welfare and occupational
safety, health and working conditions - and bring about reforms to ensure ease
of business.
The
government was into trouble during the last Lok Sabha because of the opposition
from trade unions due to a large number of reforms proposed in the four codes.
The key
contentious reforms are as follows:-
Membership
and composition of trade unions: The
Industrial reforms Code of 2017 provided that a minimum of 10% of workers or
100 workers employed in an establishment or industry would be needed to
register a trade union. It also restricted outsiders to an
establishment/industry from becoming a member of office bearer.
Hire
and fire: The
reforms code 2017 increased the limit for prior permission of the government
for lay-off, retrenchment and closure to 300 workers. This is the most
controversial condition.
Ban
on strikes: The
reform also restricted strike by a requiring a notice of 14 days and striking
within two months of a notice (now prior notice is required only for essential
services), (b) but banning strikes during the pendency of the conciliation
process which starts from the day of the notice and (c) increasing fine up to
Rs 50,000 in addition to one month's imprisonment for violations.
Redefining
factories: The
reform proposes many amendments in the Factories Act of 1948 to ensure enough safety
measures and to promote health and welfare of the workers. One of these relates
to redefining factories numbers from a minimum of ten workers in an
establishment (if power is used) to twenty and from twenty (if power is not
used) to fourty workers.
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