New Delhi: The Parliament on Wednesday approved three key labour reform bills which will remove impediments for winding up of companies and allow the firing of staff without government permission in firms with up to 300 workers. The Bills have been the subject of much debate, with workers from across the country protesting against the legislation.
Amid a boycott by opposition parties, including the Congress and the Left, over the suspension of eight MPs, the Rajya Sabha passed the three remaining labour codes on industrial relations, social security and occupational safety by voice vote.
The three codes were passed by Lok Sabha on Tuesday and these will now be sent to the President for his assent. Replying to the debate on the three labour reforms bills, Labour Minister Santosh Gangwar said: “The purpose of labour reforms is to provide a transparent system to suit the changed business environment.”
The minister also told the House that as many as 16 states have already increased the threshold for closure, lay offs and retrenchment in firms with up to 300 workers without government permission. He maintained that was not good for employment generation to keep the threshold low at 100 workers since it discourages employers to recruit more workers and that organisations deliberately keep their workers' strength below the number.
The minister was of the view that the increase in threshold would result in job creation and encourage employers to hire. He said the Bills would safeguard the interest of workers and provide universal social security to workers by expanding the ambit of Employees' Provident Fund Organisation and Employees' State Corporation of India. He added that there would a social security fund to cover around 40 crore unorganised sector workers. Over 29 labour laws have been merged into four codes and one (Code on Wages Bill, 2019) of them has already been passed, the minister said.
The Occupational Safety, Health and Working Conditions Code, 2020, will consolidate and amend the laws regulating the occupational safety, health and working conditions of persons employed in an establishment and related matters.
The Industrial Relations Code, 2020, seeks to consolidate and amend laws relating to trade unions, conditions of employment in industrial establishments or undertaking, investigation and settlement of industrial disputes.
The Code on Social Security, 2020, will amend and consolidate laws relating to social security with the goal to extend social security to all employees and workers either in the organised sector or the unorganised sector.
The Code on Wages, 2019, was passed by Parliament last year. The passage of the remaining three codes by Parliament completes the government’s efforts to reform labour laws in the country.
The move, however, has been criticised by academics and trade unions alike. The unions have called the Bills an attempt to further a “pro-capitalist” agenda and have united in protest against the three Bills. Workers unions from different states have protested against the changes in labour laws. Journalists in New Delhi also protested against the changes, saying that the Bills “spell disaster for all Indian workers”.
Speaking to NewsClick earlier this week, K.R. Shyam Sundar, professor of labour studies at XLRI Jamshedpur, said that it was “unfortunate” that the government had chosen to effect these changes “at a time when the country is ridden with a pandemic and unemployment rates are alarmingly high.”
“In a civilised country, the ambit of labour laws must be widened. However, given the neo-liberal form of globalisation that has been witnessed in India, a reverse is taking place,” Sundar had said. “The workers are being stripped of their hard-fought protections – earned through decades of struggle,” he added.