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Half-Hearted Labour Reforms

Half-Hearted Labour Reforms

The labour sector in the country is faced with two ironies: One, existence of a plethora of laws many of which do not bring relief to workers; two, lack of laws in many areas where they are needed the most, thereby leaving out majority of workers in unsafe, unprotected and unequal situations. Hence, reforms in labour laws were a long pending demand of workers, unions and political parties. It is in this context one has to see the labour law reforms approved recently by the Union Cabinet.

The proposed reforms seek to merge several central labour laws into a single code which would apply to all establishments employing 10 or more workers. This is a marked departure from the present scenario of 40 Central laws and around 100 State laws that govern the labour sector. As experts point out, the biggest difficulty with the existing labour laws is its multiplicity which has been a nightmare for employees and employers.

The proposed provisions make it mandatory for all employers to provide a free annual medical check-up to all its employees. The issue of appointment letters to all employees has been made compulsory. Welfare provisions such as a crèche, canteen, first aid and appointment of welfare officer have been made mandatory. It also says that a part of the penalty for violation of provisions leading to death or serious injury to any person may be given to the victim or the legal heirs of the victim.

However, everything is not hunky-dory in the Bill or in the Wages Code Bill which was also recently approved by the Union Cabinet. It prescribes a national floor-level minimum wage, which has to be enforced by the state governments. The minimum wage announced by the state governments can be higher than what the Wages Code Bill prescribes, but not lower. Unfortunately, the minimum wage proposed by the Centre is much less than Rs. 375 a day recommended by the Parliamentary Standing Committee which studied the Bill. The proposed reforms also make it difficult for workers to agitate against unfair practices by employers by introducing tough conditions on trade unions. Though some of these proposals have been made in the guise of ‘ease of doing business’, they are more employer-friendly rather than employee-friendly.

The biggest challenge to labour law reforms is providing legal and social protection to the workers of informal or unorganized sectors. Though there is no clarity on how big this sector is, reliable data peg it at 85-93 per cent of the total work force. This sector being virtually out of legal protections, the working conditions and social security for informal workers are understandably poor. The Economic Survey of 2018-19 makes it more authentic when it says that the existing laws do not cover all wage workers and "one in every three wage workers in India has fallen through the crack". They get no leave, no safety equipment, no medical facility or family welfare support and there is no limit to their working hours. Unfortunately, the proposed reforms have met the demands of the workers only half-way.

(Published on 22nd July 2019, Volume XXXI, Issue 30)