Introduction:
Labor law is also known as employment law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers, and employees. In other words, Labor law defines the rights and obligations of workers, union members, and employers in the workplace. Generally, labor laws cover aspects of industrial relations including certification of unions, labor-management relations, collective bargaining and unfair labor practices, workplace health and safety, employment standards, including general holidays, annual leave, working hours, unfair dismissals, minimum wage, layoff procedures, and severance pay.
Labor laws are broadly divided into two categories, one which discusses the relationship between employer, employee, and union and the other one which mainly focuses on individual labor law rights, employees’ rights at work, and through the contract of work. The labor movement has been instrumental in the instituting of laws securing work rights in the nineteenth and twentieth century. Work rights have been fundamental to the social and financial advancement since the industrial revolution.
Work law emerged because of the requests of laborers for better conditions, the option to arrange, and the synchronous requests of businesses to limit the forces of laborers in numerous associations and to keep work costs low. Employers’ expenses can increment because of laborers sorting out to win higher wages, or by-laws forcing exorbitant prerequisites, for example, wellbeing and security or equivalent open doors conditions. Laborers’ associations, for example, trade unions, can likewise rise above absolutely modern questions, and gain political force – which a few managers may contradict. The condition of work law at any one time is both the result of, and a part of, battles between various interests in the public arena. International Labor Organization (ILO) was one of the main associations to manage work issues. The ILO was set up as an organization of the League of Nations following the Treaty of Versailles, which ended World War I.[1]
According to the Constitution of India labor falls under the concurrent list giving the center as well as the state equal powers to legislate labor laws accordingly while the residual law-making powers rest with the state. This has led to a lot of laws being created to protect the interests and rights of employees. Labor laws in India are constantly evolving and aim to resolve long-standing issues as well as to adapt to the needs of the changing labor markets and business models. Minimum Wages Act, 1948, Factories Act, 1948, Maternity Benefits Act, 1961, Payment of Bonus Act, 1965 are some important labor laws in India. These laws have many provisions to save the interests of workers of organized and unorganized sectors in India.[2]
What are the four labor codes in India?
As mentioned earlier, labor comes under the concurrent list in the Constitution of India which gives equal power to legislate labor laws in India. According to the survey released by the central government, there are about 100 state laws and 40 central laws controlling various aspects of labor like industrial disputes, wages, health and working conditions, social security, etc.[3] The second national commission on labor suggested that the existing labor laws are complex with outdated provisions and inconsistent definitions. [4] In order to ensure uniformity of labor laws the National commission on labor recommended the consolidation of the existing 29 central labor laws into four broad categories such as:
- Industrial relations
- Wages
- Social security
- Safety and welfare and working conditions
In 2019, the Ministry of Labor and Employment introduced four Bills on labor codes to consolidate 29 central laws. These Codes regulate: (i) Wages, (ii) Industrial Relations, (iii) Social Security, and (iv) Occupational Safety, Health, and Working Conditions. While the Code on Wages, 2019 has been passed by Parliament, Bills on the other three areas were referred to the Standing Committee on Labor. The Standing Committee submitted its reports on all three Bills.[5] The government has replaced these Bills with new ones in September 2020.
The main finding of the National Commission on labor was that there are too many central and state legislation relating to labor and these have made labor laws in India too complicated and are mutually inconsistent with a lot of outdated provisions and varying definitions. The Commission underlined the need to disentangle and merge labor laws for straightforwardness, and consistency in definitions and approach. Since different work laws apply to various classes of representatives and across different edges, their solidification would likewise take into account more prominent inclusion of work. Following the proposals of NCL, the four Codes on wages, industrial relations, social security, and occupational safety were presented in Parliament.[6]
Key Proposals
In the Industrial Relations Code Bill, 2020, the government has proposed to present more conditions limiting the privileges of the laborer’s to strike, close by an expansion in the edge identifying with cutbacks and conservation in industrial establishments having 300 workers from 100 workers or more as of now — steps that are probably going to give greater adaptability to employers to recruiting and terminating laborers without government authorization.
The Industrial Relations Code has raised the limit for the prerequisite of a standing order — rules of lead for laborers utilized in mechanical foundations — to more than 300 specialists. This suggests modern foundations with up to 300 specialists won’t be needed to outfit a standing order, a move which workers express would empower organizations to present discretionary assistance conditions for laborers. In any case, in the event that we break down this proposition in the bill, we could state that expanding the limit from 100 to 300 was superfluous since that will give a huge measure of adaptability to the business as far as employing and terminating. The Industrial Relations Code likewise presents new conditions for doing a legitimate strike. The time-frame for arbitration procedures has been remembered for the conditions for laborers before going on a legitimate strike as against just the ideal opportunity for conciliation as of now.
Another code has provided for the expansion of social security and the inclusion of inter-state migrants in the definition of workers. The Social Security Code proposes a National Social Security Board which will prescribe to the focal government for detailing appropriate plans for various segments of unorganized laborers, gig laborers, and platform laborers. Additionally, aggregators utilizing gig laborers should contribute 1-2 percent of their yearly turnover for social security, with the complete contribution not surpassing 5 percent of the sum payable by the aggregator to gig and stage laborers.
The Occupational Safety, Health and Working Conditions Code has characterized inter-state workers as the worker who has gone ahead of his own from one state and got work in another state, acquiring up to Rs 18,000 per month. The proposed definition makes a qualification from the current meaning of just contractual employment. The Code, notwithstanding, has dropped the prior arrangement for impermanent convenience for laborers close the worksites. It has however proposed a journey recompense — a singular amount measure of admission to be paid by the employer for to and return excursion of the laborer to his/her local spot from the spot of his/her work.[7]
The Code on Social Security introduces definitions for ‘gig worker’ and ‘platform worker’. Gig workers refer to workers outside the “traditional employer-employee relationship”. Platform workers are those who are outside the “traditional employer-employee relationship” and access organizations or individuals through an online platform and provide services. The Code also defines unorganized workers which include self-employed persons. The Code creates provisions for different schemes for all these categories of workers (and defines the role that aggregators may be expected to play in some of these schemes). However, there may be some overlap between these three definitions which may result in a lack of clarity on the applicability of social security schemes to these different categories of workers.[8]
Conclusion
When we analyze the four labor codes that have been passed we could see that the new labor code gives industries flexibility in hiring and firing employees. This will expand the social security net for formal and informal sectors and would make industrial strikes for workers more difficult. Also, according to the new labor code companies can shut down plants without prior approval employing 300 or below 300 workers. This is because the new labor code increased the threshold from 100 to 300. Earlier it requires companies to give 30 to 90 days of prior notice before firing the workers and shutting down the plant. Also trade unions are supposed to give 60 days prior notice before going on a strike. Strikes without prior notice are outlawed with the new labor codes. The maximum daily limit for work has been set to 8 hours and women can be employed in all establishments of work. A universal social security has been guaranteed for organized as well as informal workers. Government can from time to time recommend welfare schemes for the upliftment of laborers if it feels necessary. The main challenge ahead for this labor code is how far will it be able to achieve its main objective of unification of labor laws in India and bringing about a standard labor law throughout the country.
References:
[1] (n.d.). National Crime Investigation Bureau’s. https://ncib.in/pdf/ncib_pdf/Labour%20Act.pdf
[2] List of major labour laws in India: A brief introduction. (2020, May 8). Jagranjosh.com. https://www.jagranjosh.com/general-knowledge/list-of-major-labour-laws-in-india-1588921260-1
[3] List of Central Labour Laws under Ministry of Labour and Employment, Ministry of Labour and Employment.
[4] Report of the National Commission on Labour, Ministry of Labour and Employment, 2002, http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.
[5] ”Report No. 4: Occupational Safety, Health and Working Conditions Code, 2019”, Standing Committee on Labour, Lok Sabha, February 11, 2020; Report No. 8: “Industrial Relations Code, 2019”, Standing Committee on Labour, Lok Sabha, April 23, 2020; Report No. 9: “Code on Social Security, 2019”, Standing Committee on Labour, Lok Sabha, July 31, 2020
[6] Overview of labour law reforms. (2020, September 22). PRS India. https://www.prsindia.org/billtrack/overview-labour-law-reforms#_edn3
[7] Magazine, A. (2020, September 27). Explained: In the three New Labour codes, what changes for workers & hirers? The Indian Express. https://indianexpress.com/article/explained/govts-new-versions-of-labour-codes-key-proposals-and-concerns-6603354/
[8] Overview of labour law reforms. (2020, September 22). PRS India. https://www.prsindia.org/billtrack/overview-labour-law-reforms#_edn3
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