News Highlight
With an aim to discuss the impending implementation of the labour codes and other labour-related issues, a national-level meeting with labour ministers and officials of all states and the Centre will be held at Tirupati
Implementing the labour codes is the aim of the highest levels of government.
Key Takeaway
- The paradigm driving employment and labour policies needs to change for better quality livelihoods now and ahead.
Background
- Several lakhs of people lost their means of income due to the COVID pandemic.
- However, throughout the same time period, there has also been a surge in India’s billionaire population throughout the same time period.
- The fact that millions of individuals in India struggle to make a living is one of the country’s largest socio-economic problems.
- Poor quality of employment, which includes inadequate incomes and harsh working conditions, is said to be a key reason for this situation.
Labour reforms in India
- Over 2019-20, Parliament enacted four labour codes to consolidate multiple laws:
- Code on Wages, 2019
- It strives to control salary and bonus payments in all employment and to provide equal remuneration to employees performing labour of a similar type in every industry, trade, business, or manufacture.
- It applies to all employees in the organised and unorganised sectors.
- Industrial Relations Code, 2020
- The Industrial Disputes Act of 1947, the Trade Unions Act of 1926, and the Industrial Employment (Standing Orders) Act of 1946 are all attempting to be consolidated.
- The Code intends to improve the country’s business environment by minimising the burden of labour compliance on businesses.
- Social Security Code, 2020
- The regulations limit allowances to 50% of the salary, implying that half of the payment is basic wages, and provident fund contributions are computed as a percentage of basic earnings, which includes both the basic pay and the dearness allowance (DA).
- The employer’s percentage-based contribution to the PF balance is determined by the employee’s basic wage and daily dearness allowance under current labour standards.
- Occupational Safety, Health and Working Conditions Code, 2020
- It aims to control worker health and safety in workplaces with ten or more employees, as well as all mines and docks.
The impact of the reforms.
- The Labour Laws:
- Labour laws are only one factor affecting business investment decisions.
- Investors do not go out to hire people just because it has become easy to fire them.
- An enterprise must have a growing market for its products, and many things must be put together to produce for the market — capital, machinery, materials, land, etc., not just labour.
- Employment:
- Reforms to labour laws have had little effect on increasing employment in large enterprises.
- The V.V. Giri National Labour Institute’s interim report says that the effects of labour reforms cannot be revealed immediately and that they will take time.
- Post-2014 reforms:
- Though overall employment is affected by many factors, the bolder reforms post-2014 were designed to promote larger factories.
- Employment in formal enterprises is becoming more informal where large investors are employing people on short-term contracts, while demanding more flexibility in their in-laws.
- Labour rights:
- Increasing the threshold of the Industrial Disputes Act dilutes the rights of association and representation of workers in small enterprises.
- The report includes a long chapter on the views of employer associations about the benefits of the reforms and nothing about the views of employees and unions.
Way forward
- Assess previous labour reforms:
- There have to be efforts to assess the impacts of the already implemented labour reforms from the workers’ perspectives as the main objective of these reforms is to safeguard the rights of workers.
- Strengthen financial institutions:
- A viable financial source is the backbone of the business. Hence, the government should ensure the availability of an adequate amount of finance at a reasonable rate along with labour law reforms.
- Skilling
- Even though India is a blessed country with a young population, it would become a demographic disaster without proper skilling.
- Fundamental reforms are required in the theory of economic growth:
- The higher GDP does not automatically produce more income at the bottom, and the paradigm driving employment and labour policies must also change to enable the generation of better-quality livelihoods for Indian citizens, now and in the future.
Pic Courtesy: The Financial Express
Content Source: The Hindu