Road to Inequality: Watering Down Labour Protection Laws

Joseph Maliakan
12 Oct 2020

Apart from the highly controversial Farm Bills, the Parliament in its brief monsoon session also passed three Labour Bills which take away some hard-fought rights of the workers. The three new labour codes – the Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code – were approved on September 23 without any discussion or debate. These three codes along with the Code on Wages, which was passed in 2019, touch the lives of most Indian workers except a tiny section of public sector and managerial employees.

In 2018, the government amended the Standing Order on Employment Act and introduced the category of “fixed term” worker. This category created a permanent cadre of temporary workers with absolutely no prospect of career development or job security. And after codification under the amended codes, the “fixed term worker” will be the cornerstone of the new and emerging employment structure. This will very adversely affect the working conditions, wages, safety, health and the general well-being of millions of workers, especially those in the unorganised sector.

First, the codes have been amended to further liberalise the provisions relating to employment of contract labour, making their application only to establishments employing 50 or more workers instead of 20 or more earlier.
Second, the key provisions that regulate the employment of inter-state migrant workers have been further diluted and it is now applicable only to establishments with 10 or more workers compared to the previous five.
Third, the threshold relating to retrenchment and applicability of standing orders in industrial establishments has been increased from the existing 100 or more workers to 300.

Fourth, the threshold for factories has been doubled from 10 to 20 workers with power, thereby eliminating millions of workers from the purview of a number of important regulatory provisions meant for small factory workers.
Fifth, the state governments have been given greater powers in exempting establishments from applying a whole range of labour-friendly provisions in the code. 

Sixth, the provision for inspections in all the codes has been drastically diluted and inspections will no more be based on complaints.The government’s new mantra seems to do away with all kinds of regulations introduced from time to time for the welfare of workers at the bottom of our industrial complex. They are being left to the mercy of market forces. The changes in the labour laws have made it impossible for workers to take any collective industrial action and form unions. In other words, workers in the informal sector, most of whom are migrant laborers who have been always at the bottom of the economic pyramid, have not even been promised any form of social security under the codes.

When everything is reduced to informality, it automatically leads to growth of inequality, making sustainable growth impossible. And economic recovery, in turn, becomes more difficult. It creates conditions in which employers invest less and less in building workers’ capacities, leading to low production.

No government or company can ignore workers’ security and rights and achieve sustainable growth. The government’s approach to labour, to say the least, is myopic. Its anti-labor policies will lead to a further slowdown in the growth of the economy and recovery will become very complicated.

The government of India is going back on the future of workers when enlightened governments all over the world and industrialists in India and abroad are making huge investments in the long-term development of workers.
Fortunately in the matter of workers’ rights the Supreme Court of India has in a recent order set aside the anti-labour notification issued by the Gujarat government exempting factories from paying overtime wages to workers and providing ideal working conditions to them amid the COVID-19 pandemic and lockdown restrictions.

The Bench of Justices D.Y. Chandrachud, Indu Malhotra, and K.M. Joseph ruled that the pandemic cannot be a reason to junk statutory provisions that ensure dignity and right to proper wages to workers. “The court is cognizant the Respondent aimed to ameliorate the financial exigencies that were caused due to the pandemic and the subsequent lockdown. However, financial losses cannot be offset on the weary shoulders of the laboring worker, who provides the backbone of the economy,” the Court order said.

“A worker’s right to life cannot be deemed contingent on the mercy of their employer or the State. The notifications, in denying humane working conditions and overtime wages provided by law, are an affront to the workers’ right to life and right against forced labour that are secured by Articles 21 and 23 of the Constitution,” the order added.

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