By Shubhra Agrawal
In a bid to increase employment and lure foreign firms to offer jobs in the countrys industrial sector, the Narendra Modi-led government has decided to revamp the labour laws of the country.
Introduction of Code of Wages Bill
The government’s sudden pro-labour policy is an effort to satiate more than a million workers who went on strike on 2nd September last year to protest against the pro-capitalist policies of the Modi government. The labour ministry is in the process of condensing 44 labour laws into four codes for every sector, namely, wages, industrial relations, social security and safety, health and working conditions. The first step in the overhaul is the introduction of the Code of Wages Bill (the Code). This Bill would ensure minimum wages for all industries and workers.
Presently, permissions need to be sought by companies when laying off a large number of employees. These stringent rules and regulations discourage companies to employ people on a permanent basis and expand their factories. To increase flexibility in employment, the government has decided to make it easier to hire and fire people.
Decoding the Code of Wages Bill
The Centre, through the Code, aims to enforce a minimum wage across all the states. The states have the option of increasing the minimum pay. However, it would be compulsory for them to adhere to the minimum wage level as set by the Code.
The minimum wage would be applicable to all workers across the country, irrespective of the domain they are employed in. Presently, the Minimum Wages Act of 1948 applies only to workers in scheduled industries or establishments in the law. This Act covers only those workers whose pay is below Rs 18,000. The Code of Wages will extend ‘pro-worker provisions’ to all the workers, irrespective of their pay. The proposed Bill will subsume the Minimum Wages Act 1948, the Payment of Wages Act 1936, the Payment of Bonus Act 1965 and the Equal Remuneration Act 1976.
Impediments in the Code’s passage
Even though the Bill is yet to be drafted, the government might find it difficult to pass the Bill through the legislative bodies. The Opposition has already termed the government as ‘anti-farmer’ and ‘anti-labourers’. The Opposition is likely to halt the passage of the Bill except without significant amendments. There have been concerns that the Code will lead to different wage rates in different states. which is against the workers’ right to equality.
Trade Unions, including the Bharatiya Mazdoor Sangh, have argued that the new rules would endanger the rights of the workers and weaken the unions. As the bargaining power of the unions would diminish, it would become increasingly difficult for the workers to go on a strike and fight for their rights.
Reformation of labour sector: The road ahead
According to a study by the consultancy firm McKinsey, in 2009, 84 percent of India’s manufacturers employed fewer than 50 workers, compared to 25 percent in China. Labour laws are rarely enforced in the informal sector which employs nine out of 10 Indians. The numbers show that India lags behind in terms of the availability of employment opportunities. There is a need for reform in the labour sector. The four codes that the government aims to implement will bring in pro-worker advantages for all the workers across the country. However, they stand to lose job security, in spite of the increase in other privileges. Whether this move benefits or harms the people will only be known after the final draft of the bill is executed.
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