Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

New versions of labour codes – key proposals and concerns


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Labour reforms

The government has introduced new versions of three labour codes – Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020.

Try this PYQ:

Q.Disguised unemployment generally means:

(a) A large number of people remain unemployed

(b) Alternative employment is not available

(c) Marginal productivity of labour is zero

(d) Productivity of workers is low

What are the key proposals?

(1) Industrial Relations Code Bill, 2020

  • In this, the government has proposed to introduce more conditions restricting the rights of workers to strike, alongside an increase in the threshold relating to layoffs and retrenchment.
  • The Code has raised the threshold for the requirement of a standing order — rules of conduct for workmen employed in industrial establishments — to over 300 workers.
  • This implies industrial establishments with up to 300 workers will not be required to furnish a standing order, a move which experts say would enable companies to introduce arbitrary service conditions for workers.
  • These steps are likely to provide more flexibility to employers for hiring and firing workers without government permission.

(2) Social Security Code

  • It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers.
  • Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security, with the total contribution not exceeding 5 per.

(3) Occupational Safety, Health and Working Conditions Code

  • This code has defined inter-state migrant workers as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month.
  • The proposed definition makes a distinction from the present definition of only contractual employment.
  • The Code, however, has dropped the earlier provision for temporary accommodation for workers near the worksites.
  • It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.

What are the other proposals for workers?

  • The IR Code Bill has also proposed a worker re-skilling fund.
  • The contributions for the fund are only detailed from the employer of an industrial establishment amounting to fifteen days wages last drawn by the worker immediately before the retrenchment along with the contribution from such other sources.
  • The mention of ‘other sources’ for funding the re-skilling fund is vague.

What are the concerns raised over the new labour codes?

  • Analysts say the increase in the threshold for standing orders will water down the labour rights for workers in small establishments having less than 300 workers.
  • The increase is uncalled for and shows the government is very keen to give tremendous amounts of flexibility to the employers in terms of hiring and firing.
  • Dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers.
  • The Industrial Relations Code also introduces new conditions for carrying out a legal strike.
  • The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present.

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