Questionable Codes – India Legal
By Shivanand Pandit
Across the globe, the stable sustainability of businesses has been fatally hit by the deadly pandemic. The economic catastrophe shaped by the contagion has placed the livelihoods of billions of people in a dangerous position. Such circumstances call for substantial government reforms, such as strong employment strategies and far-reaching social protection schemes to safeguard the operation of business entities and the health and well-being of every worker. For this reason, it is necessary to strengthen various or old labor laws and strengthen reforms.
As the government prepares the platform for the four new labor codes, there are signs of staggered implementation with a rapid launch of two codes – the wages code and the social security code. These should be followed later by the other two, the Code of Professional Relations and the Code of Safety, Health and Working Conditions.
Parliament passed the three labor codes during the short-lived pandemic-induced monsoon session held in September 2020. , are the new varieties of labor codes. Earlier in August 2019, Parliament adopted the Wages Code.
For nearly three decades, India has lacked strong labor reforms. This required sweeping changes to the country’s outdated labor laws. Since 2004, UPA-I and UPA-II have attempted to execute labor reforms, but strong political opposition has crippled their intent. Although Yashwant Sinha, who was finance minister in the Atal Bihari Vajpayee government, offered few changes, massive criticism forced him to backtrack. Even the Narendra Modi government, with a comfortable majority in the Lok Sabha, took a long time to change the country’s labor rules. After a long wait, some labor laws were finally introduced and many central laws were included in the new codes.
The Modi government has brought together 29 central labor laws and around 100 state laws which are akin to several central laws in four codes on wages, social security, occupational health and industrial relations. Although he states that the four codes are the main drivers of the work improvement process, the labor centers have organized many general strikes against the codes so far, claiming that the codes will result in wresting the little social security and economic which remains in the sector of employment. The farmers’ associations had also favored the trade unions in their protests and objections. Employer associations have also had mixed reactions to the codes.
Opposition-ruled states also said the codes were “poorly drafted”. The opposition had protested the way the codes were passed in parliament in just two days without much debate. Kerala Labor Minister V Sivankutti told the Kerala Assembly that the state prepared the draft rules with caution as many provisions of the codes are “anti-labour”. Industry experts were optimistic that the codes would come into force on April 1, 2022. The government said the postponement of enforcement is due to the delay in defining the rules by states. The government also said it has offered assistance to states so the codes can be implemented from July 1, 2022.
Recently, Union Labor and Employment Minister Bhupender Yadav mentioned that only a few states have yet to set the rules. According to the recent report, so far 24 states have released draft rules for the four codes. The Department of Labor has said it wants to run the codes over the next few months and is ensuring a mid-year rollout. Minister of State for Labor and Unemployment, Rameswar Teli, had recently informed the Rajya Sabha that according to the existing report, 31 States and Union Territories had pre-published the draft rules under the Wages Code, 2019 ; 26 on the Industrial Relations Code, 2020, and the Social Security Code, 2020; and 24 on the Safety, Health and Working Conditions Code, 2020.
The delayed implementation can be interpreted as “preparatory time” taken by the industry to bring about a change in attitude towards employee well-being, rework human resource policies and plan for the resulting impact on employees. operating costs. However, a major concern is that with the 2024 general election not too far away, the rollout of the codes should not be delayed. The codes need to be implemented early so that the benefits in terms of strengthening the workforce, making it easier to do business and streamlining the control ecosystem can begin to be felt. Any necessary changes can be made once the codes are implemented.
To a large extent, the ratification of labor codes was seen as a breakthrough after several years of deliberation between government, industry, unions and other bosses. The new codes introduced can create a new framework for job creation due to the massive applicability of the law to about 580 million workers as well as other policy reforms such as Shram Suvidha portal, development agency and refinancing of micro-units, Startup India, Make in India, Skill India, digitization of labor law compliance, etc. The involvement of the female workforce is an engine for the rapid growth of any nation. For a long time, the shrinking female labor force in India has been a matter of grave concern. By authorizing the employment of women on night shifts for all types of work, the new labor legislation has brought about major changes.
The introduction of new labor reforms has been welcomed by the business community and many believe the restructurings will boost entrepreneurship and investments which are vital to boost India’s economy. According to the Confederation of Indian Industry, all the codes are reformist and contribute to building a safer, more rational, simpler and more promising future of work. He also mentioned that the reform measures address the basic needs of reviving the economy and removing barricades to the growth of business enterprises.
Many transformations introduced in the inspection rules, in particular a web-based random electronic inspection system, inspections without jurisdiction, calling information electronically for inspection, composition of offenses, etc. are progressive. Additionally, multiple records, returns, and forms can be filed and maintained electronically in a single template. Many corporations will benefit from this move.
At the same time, codes also have a dark side. They have given excessive autonomy to establishments in the appointment and dismissal of employees, which will undermine the real demands of the unions. Raising the threshold for standing orders will dilute labor rights for workers in small businesses with less than 300 workers, indicating that the government is very keen to give huge volumes of elasticity to employers in terms of hiring and dismissal and that employers can abuse this freedom of dismissal or dismissal for economic reasons. This will lead to widespread destruction of security and job security. Extending the legally permitted time before workers can go on a legal strike will make legitimate strike action virtually appalling and more difficult.
In addition, these codes have given great freedom to governments to exempt industrial units from the scope of the law and define the limits within which they will conduct their business activities. Proof of this is that Uttar Pradesh recently attempted to exempt employers from many labor reforms through an executive order. The codes do not prohibit many erroneous actions, such as not keeping records, and instead allow compound penalties to be paid. Extending the scope of the codes to all segments of workers is also questionable. The codes are not intended to reduce the number of operational laws recognizing ongoing news.
Over the next ten years, India is expected to have the largest working population in the world. About 10 million young people will enter the labor market each year. The employability of the industry is critical to unlocking the true potential of such a robust workforce. Therefore, instead of beating the drums, the government must introduce utilitarian labor laws to deal with the complexities and managerial clutter of the labor regime. The new changes prescribed in the labor legislation are not sufficient to achieve the envisaged objectives. Credible changes are needed to lower the cost of industrial land, transport and electricity for industrial consumers, streamline the elucidation of tax and other decrees, preserve an appropriate exchange value for the rupee, etc. workers’ results and incomes will be completely reduced.
It is time to recognize that the issue of “employee well-being” is closely linked to the health of the nation. Undue delay in implementing codes and uncertainty about “effective dates” will delay gains for employees and most likely make it difficult for industries to adopt new codes in a timely manner.
—The author is a financial and tax specialist, author and lecturer based in Margao, Goa