DAILY NEWS ANALYSIS

GS-III : Economic Issues Labour

26 September, 2020
8 Min Read

Code debate

Context:

The parliament has passed three codes aimed at consolidating diverse labour laws.
They are the Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code, 2020.

News:

The June 2002 report of the 2nd National Commission on Labour is the root of the idea of consolidated labour codes.
The broad vision has been to give an impetus to economic activity without adversely affecting the interests of workers.
They were drafted with the basic objective of amalgamating, simplifying and rationalising labour laws.
A positive feature is that the Social Security Code promises the establishment of social security funds for unorganised workers, as well as gig and platform workers, and their welfare would be addressed by the National Social Security Board.
The threshold for considering any premises as a factory has also been raised from 10 to 20 workers without the use of power, and from 20 to 40 with power.

Criticisms:

It is argued that the laws of paramount importance, having far too much impact on the people were passed in haste or without sufficient deliberation.
The three codes are an updated version of the respective Codes of 2019, which were scrutinised by a Standing Committee, therefore, it is widely opined that they should have been sent back to the panel for an assessment.
The most contentious feature is the increase in the threshold for an establishment to seek government permission before closure, lay-off or retrenchment from units that employ 100 workers to 300.
This gives establishments greater freedom in their termination and exit decisions. This was not found in the 2019 draft.
It is argued that, with these codes involving a voluminous body of legislation, the final version should have been widely discussed with the stakeholders.
Another contentious section allows the appropriate government to exempt any new factory from all provisions of the Code on occupational health, safety and working conditions.
There is a fear that expansive powers of the exemption have been conferred on the respective governments and there has been an excessive delegation of rule-making powers.

Source: TH

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