The government claims that the introduction of the four codes — the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 — “streamlines compliance, modernises outdated provisions and creates a simplified, efficient framework that promotes ease of doing business while safeguarding workers’ rights and welfare”
The Union government’s notification on the implementation of the four new labour codes that consolidated 29 labour laws passed by Parliament in 2019 indeed marks a “historic reform” as the government would call it but it has evoked contrary responses from the industry and labour unions.
The government claims that the introduction of the four codes — the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 — “streamlines compliance, modernises outdated provisions and creates a simplified, efficient framework that promotes ease of doing business while safeguarding workers’ rights and welfare”.
It is a fact that the new codes cover the labour scene in India in the aftermath of the economic liberalisation policy of the 1990s which remarkably changed life in India. Employees in the organised sector earned their rights through collective bargaining while those in the unorganised sector, including gig and platform workers, never figured in the scheme of things. The latter are the new kids on the block who have no access to the rights of the workers — they work for a wage and then face all the uncertainties of life on their own — unlike employees in the organised sector where the companies and the government share the burden of stabilising the workers’ life.
Gig workers are a new reality and the government has now finally acknowledged it through the new labour codes which offers them provident fund, gratuity after a year of service, coverage under the Employee State Insurance scheme for healthcare and insurance. Aggregators are now required to contribute one to two per cent of their annual turnover, capped at five per cent of the amount payable to gig and platform workers, towards a Social Security Fund for the welfare of these workers.
However, while doing so, the government has removed some of the protections employees in the traditional and organised sectors have enjoyed till date. The new code mandates that an enterprise need not take the government’s permission to retrench employees if it employs fewer than 300 people, raising the threshold from 100. This would mean that hiring and firing can be an easier option available to many more enterprises. This could introduce a new sense of uncertainty in the minds of lakhs of workers even if it might warm the hearts of investors who have been clamouring for a “hire and fire” policy. The government expects that the new policy would bring in more investments that will create more jobs. Job security and investment protection need not be mutually exclusive but the government appears to be thinking in the opposite direction. This is a political question that will reverberate in the air in the times to come.
Now, the rules for the new codes are yet to be finalised. The government has promised wider consultation before finalising them. Its duty is to walk the talk, engage all stakeholders and arrive at a consensus that will foster more investments and add quality to the life of the working class, including job security. It should also promise labour unions and the investing class a periodic review of the codes.
What will be the key focus area: the unfettered flow of finance capital and guaranteed returns or the human beings at work? That is a political question, and hence the protests organised by trade unions against the introduction of the codes have become all the more important.
