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Posted at: Jul 14, 2019, 7:11 AM; last updated: Jul 14, 2019, 7:11 AM (IST)

Initiative in sync with changing economy

The codification aims to make laws compatible with the current needs of the market
Initiative in sync with changing economy
Tribune photos & Agencies

Vijay C Roy in Chandigarh

ANY  talk of reform in labour laws, especially in a diverse country like India, is bound to have resistance. This is what happened when Finance Minister Nirmala Sitharaman announced that the government has proposed streamlining multiple Labour Laws into a set of four Labour Codes. “This will ensure that the process of registration and filing of returns will get streamlined,” Sitharaman said in her Budget speech recently.

India’s stringent Labour Laws are said to be  one of the biggest hurdles in attracting investment. It was in April 2015 that the government had first proposed major reforms, including a plan to reduce around 40 Labour Laws to four broad Codes, as part of a strategy to overhaul India’s archaic Labour Laws. The idea was to make it more contemporary and compatible with the needs of the labour market.

The Laws would be summarised into Labour Codes on Wages; Industrial Relations; Social Security; and Occupational Safety, Health and Working Conditions. These are expected to be in sync with the emerging economic situation, facilitate easier compliance by establishments, promote ease of living and ensure labour welfare and wage and social security for workers.

According to the Central government, the Labour Codes contain provisions relating to wage, social security, safety, health and grievance redress mechanism for workers. 

However, there is no proposal, at present, to dismantle and merge the Employees’ State Insurance Corporation (ESIC) and the Employees Provident Fund Organisation (EPFO) with other Central schemes.

According to a release of the Labour Ministry, the process of legislative reforms on Labour includes consultation with stakeholders, including Central Trade Unions (CTUs), employers’ associations and state governments in the form of tripartite consultation. Besides, the draft Labour Codes were also placed on the website of the ministry, seeking comments and suggestions from all stakeholders, including general public. The draft legislations are finalised after considering the comments and suggestions received from various stakeholders.

The press release said the proposed initiatives will facilitate the setting up of enterprises, and create environment for the development of business and industry and generate employment opportunities.

Mandating minimum wages

The Union Cabinet last week approved the “Code on Wages Bill,” the first in a series of four Labour Codes, which seeks to mandate minimum wages fixed by the Central government. The Bill proposes to empower the states to fix different minimum wages based on geography, skill and occupation, along with a national-level minimum wage which will act as a floor. The Code on Wages Bill will combine four Labour Laws — Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and Equal Remuneration Act, 1976.

The proposed law seeks to make minimum wages fixed by the Central government mandatory to be implemented by states for all occupations. 

For better working conditions

Further, in a bid to push labour reforms, the Union Cabinet this week approved a bill to merge 13 Central Labour Laws into a single “code” which will apply to all establishments employing 10 or more workers. The proposed Code on Occupational Safety, Health and Working Conditions Bill would enhance coverage of workers manifold. According to the new rules, it will be mandatory for the workers to be given an offer letter, besides an annual medical check-up.

According to Labour Minister Santosh Gangwar, the Code will be applicable to all business entities dealing in the port and mining sector even if they have only one employee. The proposed changes are intended to improve ease of business while also giving enhanced protection to employees by mandating certain norms. 

The Bill provides for a single licence regime for staffing firms, thus significantly improving their ease of doing business. Gangwar added that a comprehensive change in Labour Law, which the government will bring through legislation, would make appointment letters mandatory. The Code on industrial relations and social security will be taken up later.

(With inputs from Ravi S Singh in New Delhi)

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