The notification of four labour codes by the Union government, passed by Parliament earlier, marks a major reform, subsuming 29 laws, some of which date back to the colonial era. Making big changes, the Codes on Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions seek to lend contemporaneity to labour regulation by bringing parity for women workers, fixing a national floor wage, introducing social security for migrant and gig workers, early gratuity for fixed-term workers after one year, and an expanded ESI coverage. A national database of unorganised workers and the use of Aadhaar for benefits distribution are positive, promising an easier claims process. As a far-reaching legislative framework governing millions of workers, though, the codes should have been widely discussed earlier. Three of them were passed by Parliament just when the COVID-19 pandemic was spreading in 2020. Moreover, even the discussion on the bills in the Lok Sabha was perfunctory due to an Opposition protest, while the Rajya Sabha took up the provisions only briefly. Now that the codes have been notified, workers keenly await the crucial rules that must be issued, laying down the processes and modalities. Here, the government has a major responsibility to consult all sections, particularly the trade unions, and modify the provisions where needed, considering that the erstwhile scheme relied on legislative acts and not executive rules to give effect to labour and social security policies. States too have to upgrade their labour bureaucracies to make them modern and responsive.
Ease of doing business is a central concern for the Union government, reflected in the reduction of rules in the Industrial Relations Code from 105 to 51, administrative forms from 37 to 18, and a total elimination of registers. Removing inspector raj and transforming them into inspectors-cum-facilitators, and confining inspections to randomised, web-based algorithm-driven checks are meant to reassure entrepreneurs. A similar pro-business measure is evident in the change to compounding of offences, where the establishment can pay 50% of the fine and 75% for violations that include fines but also attract imprisonment. Yet, one key provision pertains to the threshold for applicability of industrial standing orders to establishments with 300 workers, up from 100 under earlier laws, potentially removing statutory cover for lakhs of workers. This has naturally raised worries. It is also necessary to be more welfarist on maternity leave, dropping the requirement of 80 days of work preceding, since this will affect unorganised labour. State governments are also free to prescribe hours of work, which may dilute code provisions that lay down a 48-hour work-week and an 8-hour day with overtime. It is also time to include workers in a universal health coverage plan, given the inadequacy of the ESI system that has only 165 hospitals, the majority run by states.
