Can’t keep deferring labour reforms in the name of consultation, says Labour Minister Gangwar

The existing labour laws fell short in responding to the changed world of work

Union Minister Santosh Kumar Gangwar. File

The recently passed Code on Social Security, the Industrial Relations Code and the Occupational Safety, Health and Working Conditions Code, which along with the Code on Wages , 2019 subsume 29 labour laws into four codes, were passed after widespread consultations, says Union Labour and Employment Minister Santosh Kumar Gangwar

There has been criticism about the manner in which the three labour codes were passed. How would you address the criticism that the Bills were not sent to the Standing committee again and there was lack of consultation with the stakeholders on the final draft of the Bills?

I wish to clarify that the final draft of the Codes has been framed after wide-ranging consultations with all stakeholders. The labour reforms exercise which culminated recently was initiated on the basis of the recommendations of the Second National Commission on Labour, 2002, which had recommended to subsume then existing Central labour legislations into four or five Codes. It was from 2014 onwards that our government took active steps towards codification exercise.

I would like to inform that the Labour Ministry seeks to always ensure tripartite consultations in its decision-making. In this context an extensive consultation process was adopted wherein all stakeholders including trade unions, employer associations, state governments, international organisations and citizens were consulted. Various consultation processes were held along with seeking the comments of general public by placing the draft codes on the website. Subsequent to this broad consultations, various modifications were made. Many suggestions of trade unions including recognition of trade unions at unit, State and Central level and providing mechanism for inter-trade union dispute resolution through industrial tribunals were accepted. Lastly, the Parliamentary Standing Committee on labour after scrutinising the labour codes and consulting all stakeholders gave 233 recommendations out of which about 74% of the recommendations were accepted by the Government.

After such broad consultations at various platforms, I don’t think that the statement about lack of consultation on Codes is justified. We cannot keep on referring the Bills again and again to committees and in the name of consultation process keep deferring the much needed reforms.

Was there adequate discussion on the Bills given that the Opposition had boycotted the session? Were the Bills rushed?

It is unfortunate that the Opposition did not participate in the discussion on these important Bills brought in the interest of workers having positive impact on the lives of millions of our workers. The existing labour laws fell short in responding to the changed world of work and a need for a comprehensive labour law reform exercise was felt from long.

How will the four labour codes change the lives of workers? And when will they be implemented?

These labour Codes will bring qualitative change in the lives of our workers and they seek to achieve the twin objective of securing the basic rights of the workers and facilitating employment generation.

These labour Codes seek to universalise the right to minimum wage of workers, presently available to only about 30% of the workforce engaged in the scheduled employments. Apart from this, the right to timely payment of wages without any unauthorised deduction has been universalised for all employees. The OSH Code seeks to establish a dynamic occupational safety regulatory framework in consonance with the changing technology and working conditions. The IR Code strengthens the dispute resolution machinery in the industrial establishments besides enabling effective participation of Trade Unions. The Code on Social Security takes a significant step towards ensuring a universal coverage of all organised and particularly unorganised workers in the social security net.

The Rule-making exercise for the Codes has been initiated and we will implement these Codes after framing of subordinate legislations.

What is the status of the draft rules under the Code on Wages? How many comments have been received? And by when it will be implemented?

The Draft Rules on the Code on Wages were published in the official Gazette for seeking public comments on 7 July, 2020. Large number of comments from the trade unions, employer’s associations and general public have been received and are being analysed. The Rule making exercise for the Code on Wages would be finalised after consideration of all the comments of the stakeholders.

Unions have raised concerns that the Code will promote hire and fire and adversely impact the right to strike. The Bhartiya Mazdoor Sangh has said industrial peace will be affected. How do you address this? And is there any plan to reach out to unions on this?

I wish to clarify certain misconceptions on this aspect. While framing the Codes we had the objective to enhance the workers’ welfare along with facilitating job creation. The Codes have introduced the concept of fixed term employment taking into consideration the reality of increasing contract workers who are often exploited by the contractor and discriminated in comparison to a regular employee. Thus an option to engage workers on fixed term has been introduced duly ensuring that fixed term employee is treated at par with regular employee of establishment in all aspects including pro rata payment of gratuity.

Further, another misconception is about increase of threshold from 100 to 300 for seeking permission before retrenchment/lay-off or closure. In this regard, I wish to inform through you that this threshold has been already been done by 16 State governments and retaining the threshold of 100 would not have served much purpose. The increase of threshold from 100 to 300 was recommended by the Parliamentary Standing Committee on Labour. Low threshold for seeking permission before retrenchment, layoff or closure does not serve much purpose but on the contrary promotes dwarfism of establishments. This is also evident from the few industrial establishments in the country having more than 100 workers. Thus when holistically understood, the increase of threshold to 300 will lead to formalisation of workforce, encourage labour intensive production and encourage establishment of bigger enterprises.

Further, in addition to the benefits envisaged for retrenched workers, the IR Code, 2020 has constituted a Reskilling fund in order to enable re-skilling of retrenched workers and facilitate them in finding new employment.

I also wish to emphasise that the requirement for a 14 days’ notice prior to proceeding on strike in any establishment by a Trade Union is contemplated to enhance the industrial peace and harmony without compromising on the workers right to strike. The objective for this is to prevent uncontemplated breakdown of production in an establishment and to create an opportunity for amicable settlement of the disputes between workers and management through conciliation. Lastly, for the first time provisions for strengthening and ensuring effective collective bargaining has been incorporated in law through the provision for a Negotiating Union or Negotiating Council at unit level and the recognition of unions at the State and Central level.