India Inc. is ready once again. While it had fallen from the grace of the fastest growing country in the world due to the dual effects of demonitisation and COVID-19, the country might have just escaped its worst economic downturn and now seems to be pushing up.
But why did businesses leave out India and turn to China in the first place?
Turns out the problem lay in the tax and labour laws of our country. And, while we made a significant improvement in the tax laws (related read: professional tax in India), we still have a very old set of labour laws that are pushing India’s manufacturing businesses in a very hard path – a path which prevents them from effectively competing with foreign businesses.
But India has taken notice and has redrafted its compilation of 44 major laws into four codes, which are as follows:
- Wages Code,
- Social Security Code,
- The Occupational Safety, Health, and Working Conditions Code, and
- Industrial Relations Code.
These bills will ease the load of doing business and improve the condition of India and in industrial relations.
So, What are the Upcoming Labour Laws all about?
New Codes (Bills)
Old laws which they comprise of
* The Payment of Wages Act, 1936
* The Minimum Wages Act, 1948
* The Payment of Bonus Act, 1965
* The Equal Remuneration Act, 1976
Social Security Code
* The Employees’ Compensation Act, 1923
The Occupational Safety, Health and Working Conditions Code
* Factories Act, 1948
Industrial Relations Code
* Industrial Disputes Act, 1947
Objectives of the Upcoming Labour Law Bills
The amalgamation of said laws will facilitate implementation and also remove the multiplicity of definitions and authorities without compromising on the fundamental concepts of welfare and benefits to workers. The proposed legislation, namely, the economic Relations Code, 2019 would bring the use of technology in its enforcement. These measures would bring transparency and accountability which might cause simpler enforcement. The facilitation for simple compliance of labour laws will promote in the fitting of more enterprises thus catalyzing the creation of employment opportunities.
Effect of the Upcoming Labour Law Bills upon the Employers and Businesses
These codes try to make an effort to reduce the number of definitions of ‘employer’ and ‘employee’ given under previous laws. There will also be a simplification in the implementation of employers’ duties under the various labour laws.
Further the huge multiplicity of legislations often ensued sometimes contrasting provisions and contrasting judicial decisions. As such, it was a very treacherous path to tread for the manufacturers.
HOW WILL THIS LABOUR LAW BENEFIT THE EMPLOYERS?
- FALL IN NUMBER OF STRIKES
Under the new code, ‘strike’ includes ‘mass casual leave’ within the scope of its definition.
A 14 day notice period would also have to be given for strikes and lockouts in any establishment.
A trade union for resolving labour disputes will only be recognized if it will have the support of 75 percent or more workers.
Therefore trade unions will not be in a position to hold employers to ransom. It would be difficult to strike work legally with the establishment of a new code.
- EASE IN DOING BUSINESS BY FORMATION OF A NEW TRIBUNAL
Just like any other court case, labour disputes also take a long time period for it to get resolved. Presently, the bench for a labour dispute consists of a single member, which causes great delay in the dispute getting resolved.
But the Industrial Relations Code proposes for a negotiating union of workers and employers to solve the labour disputes. This ensues the States support for mediation and arbitration in labour disputes.
- FIXED TERM WORK
Many industries like textiles and manufacturing need employees for short periods of times at different times of the year. Employers hire these short-term workers through a middleman and it increases the human resource costs for industry.
- RELIEF FROM MULTIPLE LICENCES
Unlike earlier where employers needed to have different licenses for different work orders, now the proposed bill will help the employers in obtaining a single work license for a time span of five years.
- Related Read: How You Can Frame Contracts Yourself
Apart from this, employers need to only file for a single return instead of filing for different returns as earlier under seven out of thirteen labour laws.
Employment Policies that the Bills talk about-
- BENEFIT TO THE WORKERS: –
The new four Codes will benefit the workers in numerous ways along with the employers. The Wages Codes will provide for minimum wages, pensions, overtime compensation irrespective of the sector, and wage ceiling.
- RIGHT TO SUSTENANCE: –
The Wages Code guarantees the ‘Right to Sustenance’ for each labourer. Previously there were various checks for minimum wages in various states however now it will offer consistency to it.
- SETTING STANDARDS OF WORKING CONDITIONS: –
The Occupational Safety, Health, and Working Conditions Code will provide the workers with a good quality of workplace standards with along with decent working conditions, keeping in the mind their health and safety.
The proposed code sets a uniform threshold for all the workplaces which can be made without causing any hindrance to the working conditions of the workers.
Workers will be getting all the benefits of pension, health security, safety, wages, and overtime wages just like all the workers in different sectors of work.
Wrapping it Up
- Law Relating to Sexual Harassment at Workplace that Businesses Need to Know about
- Key Managerial Personnel in Indian Companies: All You Need to Know
Author Bio: Shivangi Tokas is a BA,LLB (Hons.) student from Fairfield Institute of Management and Technology affiliated to GGSIPU and was an intern at WinSavvy. Connect with her on LinkedIn.
Editor Bio: Aditya Bhushan is a law student at Amity Law School Delhi. Connect with him on LinkedIn.