Prime Minister Narendra Modi on Wednesday welcomed the passing of key labour reform bills by Parliament, saying it will make certain well-being of workers and give a boost up to economic growth. With passage of these three bills, namely the Industrial Relations Code,2020, the Occupational Safety, Health and Working Condition Code, 2020 and the Social Security Code, 2020, 29 central labour laws have been collated into four broad codes as intended by the government under labour reforms to improve ease of doing business and providing universal social security to workers as well. The first of the four codes, proposed by the government, the Code on Wages, was passed by the parliament in 2019.
In brief, the three bills universalise minimum wages, timely payment of wages and gives priority to occupational safety of workers. The Industrial Relations Code, aims to remove obstructions to winding up of companies and allow firing of staff without government permission in firms with up to 300 workers as opposed to existing 100 workers, a step intended at enticing more investments and job creation. It also introduces more conditions which in a way restricts employees’ Right to Strike.
The Social Security Code basically intends to expand the reach of Employees’ State Insurance Corporation to all 740 districts in the country and Employees’ Provident Fund to all institutions with 20 or more workers including self-employed workers, along with the provision of a Social Security Fund under the Code which would cover workers from unorganised sector too. And the OSH code, permits the formation of a National Occupational Safety and Health Board, covering aspects of overall wellbeing of workforce. The three codes will also allow states to roll on labour reforms and empower them to exempt any company or companies from complying with one or more labour laws, which is thought to boost investment.
CII supported the step by stating that, the move truly represents the big bang structural reforms which will go a long way towards improving the climate for both workers and industry, along with resetting the entire regulatory framework to benefit millions of workers and provide enterprises with clarity, transparency and flexibility. However, some experts and labour economists said the extended exemptions to industries through several provisions will lead social and economic instability and take away both job security and wage security. Labour Minister, Gangwar, stated that all employees will now have an offer letter and both the states and centres will generate database on migrant workers and extend them several benefits including inclusion in public distribution system and cess benefits. The implementation and the prevailing economic situation will assess the practicability of the commended provisions under the codes.