With implementation of four central new labour codes deferred, govt must use time to talk to all stakeholders

Fearing a “legal void” in case of implementation of the four central new labour codes from April 1, 2021, the Modi government has deferred it for “some time”, until at least some of the major industrial states frame rules. Since labour is a concurrent subject, both the Union and the state governments need to frame rules, and only after notification of the new rules could the already notified codes be implemented.

The situation is likely to continue for months, and therefore the Union government must use it for further discussions on the issue against which the central trade unions have been agitating.

The joint platform of the 10 central trade unions, which includes INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, SEWA, AICCTU, LPF, and the UTUC, have found numerous provisions in each of the codes that they fear may go against the interest of the working class and therefore demanding their outright withdrawal. They believe that impartial rules cannot be framed under the four labour codes in present form. They have also raised their concerns against the rules framed by the Centre which were scheduled to be implemented on April 1, 2021, and therefore burned their copies on the same day across India as part of their agitation.

The Union government on the other hand claimed that all the four new labour codes – the Code on Wages, 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020 – are in the ‘interest of the nation’. Under the new plan, 44 Central laws are to be finally subsumed into these codes.

The most contentious issues under the new rules are – companies employing up to 300 workers need not require government approval of hire and fire (service condition and job security), workers need to give 60-day notice for strike (trade unionism), working hour may be extended to 12 hours (safety of health), and exclusion of many workers from social security net in bigger enterprises through contract or muster roll systems, and in smaller enterprises by making social security rules not applicable at all.

Though the Union Ministry of Labour is ready with the rules for the four codes subsuming 29 Central labour laws, no major industrial state in the country is yet ready with the rules applicable in their domain. Only the Union Territory of Jammu & Kashmir has notified the rules. Uttar Pradesh, Bihar, Uttarakhand and Madhya Pradesh have only put up draft rules for two codes and Karnataka has prepared rules for only one code. Large industrial states such as Maharashtra, Delhi, Tamil Nadu, Punjab have done nothing in this regard.

Had the Centre implemented the labour codes, there would have been a “legal void” across the country.

Framing of rules takes several months because it needs to undergo a process. It took about three and half months to frame rules at Central level by the Union Ministry of Labour which had started the process in mid-November 2020. That much time was consumed though the Modi government was very much keen in implementing these from the beginning of the fiscal 2021-22.

Even if the major industrialized states start the process immediately, they will take at least this much time. If the Modi government respects the federal structure of the country and the requirement as per the concurrent list of the Constitution of India, the implementation of the new codes will be possible only after four months. Framing of rules without due process may hurry up the date, but quality will suffer.

Moreover, almost the entire country is busy in battling the second COVID-19 wave with Maharashtra being the worst affected state. The situation in states like Punjab, Delhi, Haryana, Karnataka, Kerala, Chhattisgarh, Chandigarh, Gujarat, Madhya Pradesh, Uttar Pradesh, and Rajasthan is also deteriorating fast. It would be not wise to tell these states to divert their attention from the corona battle at this time to make new labour rules.

States like West Bengal, Assam, Kerala, Tamil Nadu and UT of Puducherry are undergoing Vidhan Sabha election process, and therefore they don’t have time to frame labour rules.

Uttar Pradesh has made the working class more apprehensive about their future by halting implementation of the old labour rules on the logic that it was needed to make up the losses accrued by the business and industries. The new order of the state gave unbridled power to the employer against the employees, who have already resorted to indiscriminate hire and fire.

Resurgence of COVID-19 has further weakened the position of employees, and though many of them are now out of job, the government is not talking about making up their losses. Everyone is interested in making up the losses of the business and industries.

The new rules would also require the employers to revamp their system, including the salary structures of the employees. India Inc had been seeking more time to implement the codes, given the fragile economic recovery and the resurgence of the second COVID-19 wave.

Since the Code on Wages caps employees allowances at not more than 50 per cent of wages, all the companies would significantly change the salary structure, for which only handful of companies are ready at this moment.

CII has said in a statement that it is not the best time to implement the codes. Nevertheless, how can they change their existing rules or standard operating procedures when the rules are not even framed by the states?

One should also note that companies never wanted to rush into implementation of the codes, and central trade unions are demanding their withdrawal. It shows that Modi government has not even followed the basic philosophy of tripartism during making the rules no one seem to be happy with.

The time that the government has got in hand now therefore must be used to talk with all the stakeholders with an open mind to appropriately change the codes for benefit of all. Even if the rules were ready, and all the parties agree to it, they should not be enforced in the middle of the financial year, because it would pose additional problems more to the implementing companies.

(IPA Service)

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