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

[op-ed snap] Code Red for labour


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Labor reforms and proposed labor codes


Centre proposed to replace 44 labour laws with four codes.

Problems with the codes

  1. These codes are antithetical to the very idea of statutory protection of labour and dignified standard of living for workers
  2. Original labour laws were enacted after decades of struggle and were meant to ensure certain dignity to the working-class people
  3. Ministry of Labour’s proposal to fix the national minimum floor wage at ₹178 is devoid of any defined criteria or method of estimation.
    1. This may lead to a race to the bottom by States, to attract capital and investments. 
    2. This is being called ‘starvation wage’ as the Ministry’s own committee recommended ₹375 as the minimum.
  4. The four codes exclude over 95% of the workforce employed in informal units and small enterprises, who are in greater need of legal safeguards.
  5. There is no clarity on who constitutes an ‘employer’, an ‘employee’ or an ‘enterprise’, giving the owner greater discretion to interpret the provisions.
  6. To minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees.
    1. Evidence indicates that apprentices are made to do jobs of contractual as well as permanent employees.
  7. The code has a provision on “employees below fifteen years of age”, which can be construed as legalisation of child labour. 
  8. The code on wages legitimises and promotes further contractualisation of labour, instead of abolishing it.
  9. Wage code brings back the provision of “recoverable advances”, a system linked to coercive and bonded labour by the Supreme Court. The distressed and vulnerable migrant labourers could be bonded to work through advance payments.
  10. The 8-hour workday shift has been done away with, and multiple provisions of increased overtime have been inserted. 
  11. The code also gives ample alibis to employers to evade bonus payments.
  12. Non-payment of wages will now not be a criminal offence and penalties in case of non-compliance have been reduced.
  13. Code on industrial relations is replete with restrictions on forming or registering unions, calling a strike and seeking legal redressal for workers.

Proposed laws resemble ‘employer codes’ rather than ‘labour laws’.

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