Parliament passes labour bills amid oppositions' boycott
September 25, 2020Three key labour reform bills to ensure social security for workers while also providing greater flexibility to employers to hire and fire have been passed by the Parliament on Wednesday.
The three bills were passed in the Upper House by voice vote amid boycott by the opposition over suspension of eight members. These bills are Code on Occupational Safety, Health and Working Conditions, Industrial Relations Code and Social Security Code.
"The purpose of labour reforms is to provide a transparent system to suit the changing business environment," stated the labour Minister Santosh Gangwar while replying to the debate on the three labour reforms bills in the house. He further stated that without the permission of the government, as many as 16 states had already increased the threshold for closure, lay off and retrenchment in firms with up to 300 workers. He stated that the states have been given flexibility to alter labour laws as per their wish.
He contended that keeping the threshold below 100 is not good for employment generation as it discourages employers to recruit more workers than this and due to this the employers deliberately keep their workers’ strength below it. While explaining the notion behind this provision Minister Gangwar said, “Investors will be encouraged to set up big factories and employ more and more workers.”
He stated that by way of expanding the ambit of Provident Fund Organisation and Employees’ State Corporation of India these bills would safeguard the interest of workers and would provide universal social security to them. Employee Provident Fund Organistaion benefits can now be availed by all firms with 0 or more employees as the existing schedule has been done away with, said the Minister while commenting on the Social Security Code. He also said that a social security fund will also be set up which would cover around 40 crore unorganized sector workers. He stated, “Besides, employees with firms less than 20 workers will be able to join EPF while the government will also extend the benefits of EPFO to self-employed.”
The minister also clarified the apprehension that the right to strike of workers had been withdrawn under the code by stating “the provision of 14 days’ notice prior to strike is intended to enable employees and employers reconcile during this period.”
The three bills will now go to the President for his assent that has been approved by the Parliament. The code on wages is yet to be implemented which has already been enacted. To consolidate 29 central laws the labour ministry had drafted four comprehensive codes.
To consolidate and amend the laws regulating the occupational safety, health and working conditions of persons employed in an establishment and related matters the Occupational Safety, Health and Working Conditions Code, 2020 has been introduced. The bill amends the provision that earlier required multiple licences for staffing firms to hire workers at different locations allowing a single licence for the same. The threshold limit has also been increased from 20 to 50 under the code of contractor employees as opening up hiring of contract workers in all areas will ease the compliance of employers.
The Industrial Relations Code, 2020, seeks to make more solid and alter laws relating to trade unions, conditions of employment in industrial establishments or undertaking, investigation and settlement of industrial disputes. The threshold on number of employees needed in an organization for retrenchment and closure of establishments without government approval has also been raised to 300 which was earlier 100 while significantly increasing the ease of firing employees.
To amend and consolidate laws relating to social security, the Code on Social Security, 2020 has been introduced. The bill intends to provide for universal social security to all workers including the unorganized and platform workers. This number alone estimates for over 90% of India’s total workforce accounting to around 50 crore.