Central Labour Code Bills : A Brutal Attack on the Rights and Security of Workers and Trade unions


The Modi-led Central government by virtue of its brute majority in both houses of parliament recently passed three crucial bills on Labor codes which constitute a grave death blow to the trade union rights and the working class of the country. The three bills, Industrial Relations (IR) code bill, 2020, the Occupational Safety, Health and Working conditions code bill, 2020, and the Code on Social Security bill, 2020 were hurriedly passed in the midst of rising covid-19 pandemic and at a time when the opposition had boycotted the parliament to oppose anti-peasant farm bills. One more legislation that is code on wages was passed in 2019 which makes it four Labour codes.

It is said that the 44 Central Labour laws were consolidated and simplified into 4 Labour codes. But in actuality the new labour codes far from being just a simplified version actually includes several new provisions detrimental to the cause of working class. These legislations give a free hand for hiring and firing workers snatch away existing labour protections and infringe upon their right to strike. On the other hand it rolls out red carpet for ease of doing business.

The Industrial Relations Code Bill, 2020 is a death blow to the workers interests

The Industrial Relations code, 2020, has given absolute right for industries hiring up to 300 workers to unilaterally terminate services of any worker without any need of government’s approval. Earlier, following an amendment in 1982, industries hiring more than 100 workers were barred from unilaterally terminating any worker or declaring layoff. This offered some protection for the workers from the whimsical decisions of the owners. But the new enactment has done away with this safeguard and thrown the workers at the mercy of the management. This is applicable to more than 90% of the total work force who will be left without protection. According to Annual Survey of Industries 2014-15, if one looked at the organized sector, the number of industries appointing 100 or more workers was just 7.2%. The number of industries appointing 300 or more workers was only 1.2%. With the promulgation of new Industrial Relations bill, the applicability of Industrial Disputes Act is drastically reduced.

Further the new code has totally freed the managements from furnishing a standing order. The earlier existing Industrial Employment (Standing Orders) Act, 1946, made it mandatory for the employers of an industrial establishment where 100 or more workers are employed to clearly define the conditions of employment and rules of conduct for the workmen and make them known to the workmen employed. Now it has been abandoned. Standing order was enacted in 1946 in order to standardize the terms and conditions of service across various occupations so that the employer cannot arbitrarily change or determine the terms and conditions of service. It also provides for employment security against arbitrary dismissal by the employers by framing any kinds of allegations. It is to be noted that upto now the existing legal norm has been that no standing orders signed between the management and the workers’ representative could violate the model standing orders put out by the labour ministry. This acted as a great protection against unbridled exploitation by the owners. Now the standing order which mandates strict adherence to all these provisions are totally removed. So in this new situation what will be the fate of employees is anybody’s guess.

The Biggest Onslaught on the Right to Strike

The right to association and the right to strike which is an inalienable right of the working class has been restricted and diluted. More serious is the condition imposed on carrying out strikes. The time period of arbitration proceedings has been included in the conditions for workers before going on a strike as against only the time for conciliation at present. This means if the conciliation is on they cannot go on strike. After 7 days of conclusion of conciliation, they cannot go on strike. Then the dispute will go to the industrial tribunal which takes still more time during which time they cannot go on strike. Only after 60 days of completion of all proceedings legal strike is allowed. Therefore by imposing such conditions the code attempts to muzzle the voice of dissent of the workers and the unions.

Fixed term employment has been introduced under which the employers are given the absolute right to hire workers for a fixed term by denying them continued service even when the job is perennial in nature. Further under this act the managements are not mandated to provide any social security benefits. This is nothing but legalization of hire and fire regime! Hitherto, the percentage of number of contract workers in organized sector was 35%. Moreover, appointment of contract workers for performing basic activities in the organized sector was banned. But now, any industry with 300 or more workers would be able to engage workers on contract for doing basic jobs and thereby keeping them out of the purview of Industrial Disputes Act. Moreover, in 2014-15, the average wage paid to a worker on contract in organized sector was Rs 8,500 was only 70% of what was paid to a regular worker. The new code would empower the employers to appoint more and more workers on contract thereby widening the gap between wage and labour.

By redefining what constitutes an industry the new Code simply excludes all institutions owned or managed by organizations substantially engaged in any “charitable, social or philanthropic service”, and such other services thereby denies protection and benefits to huge number of workers working in these establishments. Even “wage” has been redefined to deny wages to a worker as per the earlier provisions. It excludes a large proportion of the emoluments paid to a worker under the Industrial Disputes Act, 1947 like house rent allowance, the value of any house-accommodation, travelling allowance, overtime allowance and remuneration among others.

The Code on Occupational Safety, Health and Working Conditions

Certain existing provision offering protection to the workers have been removed and new specifications are prescribed. The code has also proposed employing women in all establishments for all types of works between 7 PM and 6 AM brushing aside the widespread concern of women’s safety.

Further the protections for contract workers have been removed in establishments hiring more than 20 workers by increasing the threshold limit to 50 workers which means two-thirds of the industrial establishments which hire more than 20 workers but less than 50 will be left out of the purview of any legal benefits.

Earlier labour laws were applicable for factories using electricity which employ more than 10 workers and in factories without electricity which employ more than 20 workers. Now by increasing the limits to 20 and 40 workers respectively the new code has in one stroke snatched away whatever protection existed for the workers of the above establishments. 70 per cent of the industrial establishments and 74 per cent of industrial workers will now be subjected to hire and fire regime.

Code on Social Security bill, 2020

Under social security code only organized workers are taken into consideration. Unorganized sector workers working in establishments having 10 or less workers are considered as a separate category.  This means the new code provides two types of social security for two categories of workers, organized workers and unorganized workers. Further the new code has recommended constitution of a National Social Security Board which in turn will recommend to the central government suitable social security schemes for different sectors of organized workers. For GIG workers (workers engaged in non-traditional works consisting of income-earning activities outside of traditional, long-term employer-employee relationships), social security fund will be raised by both the aggregators and GIG workers. GIG workers will have to shell out up to 5% of their salary amount while the aggregators will contribute just 1-2 % of their turnover.

Tasks Ahead

The central government by means of these labour code bills has let loose an all-out attack on the working class of the country. These labour code bills, which are a part of anti-people globalization and liberalization policies has cast its dark shadows on all the category of the workers, whether organized, or unorganized, whether contract workers or construction workers or GIG workers. It seeks to nullify in one stroke the hard won rights and protections of the workers won over decades of struggle. Therefore to shoot down the above legislations and fight for the rights of the working class let us close our ranks and rise up to build up and intensify a united organized powerful  protest movement and then gradually step that movement into a resistance movement which would compel the government to roll back the anti-worker legislations.

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