The new Labour Codes : Depriving workers of rights
The Lok Sabha, on September 22, passed three new labour codes – the ‘Industrial Relations Code Bill, 2020’, ‘Code on Social Security Bill, 2020’ and the ‘Occupational Safety, Health and Working Conditions Code Bill, 2020’ – as the central government seeks to amalgamate 44 central labour Acts into 4 codes, towards simplifying India’s labour laws and improve ease of doing business as recommended by National Labour Commission, 2002. The Code on Wages, which had proposed the universalization of minimum wages, was cleared by Parliament on 2nd August last year.
Code on Wages Bill 2019
The Pay Wage Bill bearing the name ‘Code on Wages 2019’ has been enforced on 8th august, 2019, after receiving the approval of the President. This Bill eliminated 4 existing Labour Laws – Minimum Wages Act-1948, Wages Payment Act-1936, Bonus Payment Act-1955 and Equal Remuneration Act-1976.
Through the Wage Code Bill, RSS-BJP led Modi government has raised the national minimum wage from 176 rupees to just 178 rupees per day, which is way less than the amount of 375 rupees per day initially suggested by the Union Labour Ministry. The Bill has completely changed the formula for wage determination, which was decided in the 15th Indian Labour Conference. The Union Minister of State for Labour has announced a national minimum wage of Rs. 4,628 per month (Rs 178 daily) on 10th July. It is worth remembering that the Seventh Pay Commission had recommended Rs. 18,000 per month (now Rs. 22,000 per month) to be implemented as the minimum wage from 1st January 2016. It is also worth noting that in July 2018, the Expert Committee of the government (Dr. Anup Satpathy committee) itself had suggested the minimum daily wage to be atleast Rs. 375, based on the price index. Modi government undermining its own committee recommendation is nothing but a big fraud with the working class of the country. At a rate at which privatization is going on in the country, all government enterprises are being sold to the capitalists and minimum wage is reduced so much in accordance with the law, it is easy to imagine that the capitalists will take advantage of such a ‘golden opportunity’ for their own interest! In the name of establishing a national floor level minimum wage, the Bill has been formulated to destroy the struggle for minimum wage altogether. Earlier there was a tripartite system for fixing the minimum wage, in which the workers’ representatives from different sectors, employers and representatives of the government together determined the minimum wage. During the 5 years of Modi’s first term, the government completely ruined the tripartite system, diminishing the participation of the workers in the process and destroying the Indian Labour Conference norms which dealt with the matter of minimum wage.
As proposed in the Code on Wages Rules, 2019, the hours of work which shall constitute a normal working day are 9 (nine). This is contrary to the standard practice of 8 (eight) hours of work. The minimum wage is also conventionally set for the eight-hour work period. Making it 9 (nine) hours would reduce minimum wage below the starvation minimum wage.
Many developed countries are reducing working hours. Indirectly Code on Wages Rules 2019 proposes that number of hours of work which shall constitute a normal working day, including a period of rest should be 12 hours. That means the minimum working hour is being set virtually at 12 hours! Which have already been introduced in several BJP-ruled states. If this is implemented in full pace, there is a possibility that certain employers would take advantage of such an expanded window and reduce three shifts to two shifts.
In a nutshell, this code is determined to give the industrialists a foothold by fully exploiting the labor of the working class.
Industrial Relations Code Bill 2020
With the Industrial Relations Code Bill, it explicitly speaks of corporate exploitation. A number of laws, including the Trade Union Act (1926), Industrial Employment Standing Order Act (1946) and the Industrial Disputes Act (1948), are losing relevance due to this code.
According to the code, government permission is now no longer required to lay-offs, closures or retrenchment of workers in a factory with less than 300 workers. The government can increase this number if required. Earlier the government permission was mandatory for lay-offs, closures or retrenchment in a factory with 100 or more workers. In India, 70% of enterprises have less than 300 workers. The code states that if there are less than 50 contractual workers in a factory, labor law will not be enforced there. Now the provisions for contractual workers are applicable if the number of workers in the factory is at least 20.
With the bill, the government has sought to amend the definition of ‘strike’ to bring ‘mass casual leave’ under its ambit. Under the code, if over 50 per cent of a company’s workers take concerted casual leave, it will be treated as a strike. More importantly, though the code also seeks to restrict the rights of workers to strike. If the workers want to go on strike against the employer, they must serve strike notice to the employer at least 14 days in advance. On the other hand if within the period, the government officials i.e. labour commissioner call a meeting with the employer/management and the workers’ union to find a solution to the problem, then no more strikes can be held for 60 days. Therefore, this law will make it virtually impossible for workers to strike. What happens if workers do not give strike notice 14 days in advance? The strike will be declared illegal! There could be fines or imprisonment or both! The Industrial Relations (IR) Code, 2020, that allows companies to hire contract workers directly through ‘fixed-term contract’. Earlier, firms had to go through a contractor to hire contract workers. According to the report, fixed-term contract workers are entitled to all statutory dues that permanent workers in the same unit get. However, fixed-term contract workers are not entitled to retrenchment compensation like permanent employees. Experts say that its introduction will lead to withering away of permanent jobs in the market. Under the current enactment, companies will be able to hand out contractual jobs to its existing permanent workforce as well. Earlier, the rules mentioned that “no employer of an industrial establishment shall convert the posts of the permanent workmen existing in their industrial establishment … as ‘fixed-term employment’. In this process the owner can lay off the workers at any time.
This IR code also states that only recognized unions among the registered trade unions will have the opportunity to sit for bargaining workers issues with the employer/management and the government representative. It is stated in the bill that if 51% of the workers of the factory are members of a union, then that union will be recognized as a ‘negotiation union’. Needless to say, which trade union will be recognized as a ‘negotiation union’ depends on the political relationship of that trade union with the government.
Under this code, the employer will have the full opportunity to arbitrarily fix the terms and conditions of service of the workers and fire them away at any time.
The Social Security Bill, 2020
Social security Bill 2020 replaces nine laws related to social security including employees’ provident fund act 1952, the maternity benefit act 1961 and the unorganized workers social security act 2008.
The code, talks about establishing a ‘National Social Security Board’ which shall recommend to the central government for formulating suitable beneficial schemes for different sections of unorganized workers, gig workers (who deliver door-to-door service) and platform workers (Those online staff & workers). Under the Bill, the central government may notify various social security schemes for the benefit of workers. These include an Employees’ Provident Fund (EPF) Scheme, an Employees’ Pension Scheme (EPS), and an Employees’ State Insurance (ESI) Scheme.
The two codes mentioned above show that the government intends to introduce temporary jobs instead of permanent jobs in factories and various enterprises where the scope of various government welfare schemes is very limited to get the benefits for unorganized workers. Workers will also suffer as the SS Bill, 2020 restricts the powers of the officers to decide the quantum of provident fund and Employees State Insurance dues from the employers and also limits their powers to reopen old cases. The relaxation of the penal provision for obstructing inspectors from performing duties will also deter their ability to protect the interests of the workers. In India, over 90 percent of India’s total workforce estimated at 50 crore works in the unorganized sector.
As a result, the Social Security Code will exclude virtually all welfare schemes assigned to permanent or temporary workers.
The Occupational Safety Code Bill, 2020
Previous 13 other acts are now merged and enacted a new code regarding the occupational safety, health, and working conditions of the workers. Under the Occupational Safety Code, women employees will be permitted to work at night. Moreover, it also seeks to register the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. 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 Code 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 once in a year. By new legislation, maternity benefit can only be claimed if the women worker puts in a minimum 80 days of employment preceding her delivery. The threshold limits for application of the OSHWC legislation has been made doubled and raised to 20 workers in the case of establishments with using electricity power and 40 workers for establishments not using power. Further, the provisions of the new law do not provide for a judicial mechanism for hearing disputes, which once again puts the workers at a disadvantage. According to the Contract Workers Abolition and Control Act of 1970, it was illegal to do any permanent work by contractual workers. Earlier in the case of permanent workers as well as contract workers, all the security, responsibilities were legally borne by the employer. Under the new code, workers will be deprived of this right. From now on, contract workers can be hired for any type of work i.e. on permanent or temporary in nature and the employer has no responsibility to protect workers in the workplace. The ‘Fixed Term Employment’ Act has already been introduced in all public and private sectors. This term may be in three months, six months or so on and will depend entirely on the will of the owner/employer.
According to Trade Unions, the new labour bills promote informalization, contractualization and casualization of labour and will impact the number of permanent jobs in factories, enterprises, organizations etc. – which will result in a decline in wages, government benefit schemes and work conditions and also reduced the accountability of employers. As per the Bills’ fixed-term contracts clause, there will be a reduction in the number of permanent jobs and that the ambiguity on the definition of ‘trade unions’, may lead to diluting workers’ rights and more authority to owners on lay-offs. India is currently facing crunching horrible job loss amid COVID-19. As per the International Labour Organization (ILO), at least 41 lakh people in the country have lost their jobs while the Centre for Monitoring the Indian Economy (CMIE) estimated 2.1 crore salaried jobs were lost following the lockdown. On the other hand, Adani-Ambani’s wealth is increasing multiplied day after day.