From Labour and Capital to Labour for Capital

Babu Mathew writes:

The herculean task of legislatively recasting the entire gamut of labour law in India is now completed. Nothing similar has ever happened in India before on this scale. But the glaring question is, why did consensus building not precede the process of legislation? A careful examination of the new codes would indicate that with very rare exceptions, the agenda resembles what the corporate lobby has been continuously pushing for, even more vigorously, after neo-liberalism set in. The government appears to have decided not to consult workers, ignoring the Indian Labour Conference (ILC), despite India having ratified the International Labour Organization’s (ILO) convention No 144 of 1976 on Tripartite Consultation.

Indian labour law is prolific, with a workforce of more than 500 million and law-making in this field more than 150 years old. Nearly 90% of this workforce belongs to the informal sector, with each fragmented segment having its own unique features compelling draftspersons to produce separate sectoral laws (for example, beedi, cinema, mine, child, migrant, construction, plantation, etc). In addition, general laws were also produced such as the Trade Union Act, the Minimum Wages Act, and the Maternity Benefit Act.

Initially, the claim was that the proposed reform would lead to simplification and universalisation. In reality, it has meant a lot of cut and paste with critical anti-labour amendments. Consolidation does not automatically simplify the law. Take the Code on Social Security, 2020. It incorporates almost a hundred definitions. Reading through this maze to find out who is covered by what kind of social security is difficult, even for experts. With all central trade unions opposing the new laws, along with the Bharatiya Mazdoor Sangh—associated with the ruling dispensation—expressing reservation, any analysis will need to go code by code.

The Industrial Relations Code, 2020 has three parts. The trade-union part introduces a long-pending welcome reform providing for compulsory recognition of trade union/s, but there is little clarity whether implementation will be through the secret ballot method or other methods. Regarding dispute settlement, the new law breaks the backbone of collective bargaining by rendering all strikes and lockouts de facto illegal. There is even provision for deregistration of a trade union, if the code stands violated. And, with respect to standing orders, it is not applicable to any industry employing less than 300 workers, thus leaving service conditions of such establishments to the arbitrary will of managements.

The Code on Wages, 2019 has deleted the first requirement for fixing a minimum wage—notification of scheduled employments. Fortunately, despite this serious and unwarranted omission, minimum wage can still be notified, but possibly inviting dilatory litigation. A serious concern is the “abdication of legislative function” when the law leaves the criteria for quantification of minimum wage to the rule-making authority. While the draft wage rules recognise the principles laid down by the 15th ILC and the Supreme Court’s Reptakos judgment, but again these rules arbitrarily fix a ceiling on factoring house rent on an irrelevant criterion. For the first time, a floor wage is also provided, but the proposed wage level announced arbitrarily (`200 per day) is so low that the floor level itself will become a downward drag on wages as a whole.

The Social Security Code, 2020 is an outstanding example of how to make the law complicated. Good social security, in the form of provident fund, employees’ state insurance, and employees’ compensation and gratuity, is provided only for less than 7% of the workforce in the formal/organised sector. Much of the informal sector is not covered by this social security. Instead, they are left to the mercy of the appropriate government through welfare schemes, not clearly spelt out, and without any confirmed resources available. In fact, even the much talked-about inclusion of gig and platform workers comes with a declaration that they are not workers.

Finally, there is the Occupational Safety, Health and Working Conditions Code, 2020. The name is a misnomer itself, since it provides no concrete protection against occupational diseases rampant in the informal sector. Reluctantly, the eight-hour working day is now included.

Labour comes under the concurrent list of the Constitution. Until now, every piece of labour legislation made an important distinction between the central and state governments, (using the expression “appropriate government”), especially for rule-making and implementation. The new laws usurp all power into the hands of the central government and has marginalised state governments, especially in the matters of labour administration and implementation.

In summary, it is safe to say that the Industrial Relations Code, 2020 contains anti-labour clarity. It bans strikes, kills collective bargaining, promotes arbitration, and supplants state inter­vention. The Code on Social Security, 2020 is verbose legalism to say who is not entitled to what. Fragmentation is generously defined, and discriminatory deprivation of social security is legitimised. The Occupational Safety, Health and Working Conditions Code, 2020 goes out of its way to repeal protection to 13 groups of the informal sector and offers insulting alternatives. As for the Code on Wages, 2019, a ceiling on house rent to erode the real cost of living is smuggled in through the rule-making power.

It is not too late to put all four labour codes on hold and initiate widespread consultation of all affected interests and not merely the corporate sector. The constitutional paradigm must not yield to the “neo-liberal” one, if the rule of law must prevail in labour jurisprudence.