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One More Labour Code with Loopholes and Defects

A critical examination of the central government’s draft rules for the Occupational Safety, Health and Working Conditions Code.
Labour code bIll

One of the basic and yet most critical laws in India governing workers is The Factories Act of 1948. This law pegs the hours of work at 48 hours a week, spread over 10.5 hours (or 630 minutes) a day, which include intervals of 30 minutes every five hours. The law is not clear whether the working hours include lunch, tea and wash-room breaks. This is because in factories, managers monitor and regulate every break from work using “movement sheets” and biometric machines. As a result, “hours of work” have become a collective bargaining issue. 

Some examples demonstrate this point. In the Chakan unit of Bajaj Auto Ltd, workers agreed that breakfast and snacks would be had 10 minutes before the scheduled shift timings and not during the work time. Apart from regular work, workers have to comply with bureaucratic procedures concerning production, such as detailing their output, signing job sheets, logbooks and so on, within the 480 minutes that make up eight hours (2010 agreement) of work. The workers are supposed to report for work at 6.20 am, (10 minutes before shift starts) and leave at 3.35 pm, ten minutes after the shift ends at 3.25 pm. Thus they spend 555 minutes (9.25 hours) at work. In Federal Moghul, out of 480 minutes, workers spend 420 minutes (7 hours) in all areas except the foundry, where they work for 410 minutes or 6.8 hours. In 2006, in Ashok Leyland, the actual machine/equipment/conveyor working time in each shift was 430 minutes, based on cycle time and activity-based engineering department handling time. But in a 2009 settlement, the management brought it down to 410 minutes in order to satisfy human needs, tea time and emergencies. In Larsen & Tubro (Mumbai), operators agreed to work effectively for 430 minutes or 7.1 hours in the first two shifts and 410 minutes in the third shift, which amounts to a significant improvement in productivity. 

Now the Rules of the Occupational Safety, Health and Working Conditions Code or OSHWCC increase the spread-over time from 10.5 to 12 hours (720 minutes), and this could have adverse consequences for workers. For one, it is not clear what workers will be expected to do for the 90 extra minutes (720 minus 630 minutes) at work? The full 12 hours at work, plus travel time which in the metros would easily be another 60 minutes, then the work-life balance of workers will be adversely affected. Also, it will incentivise employers to work for two in place of one shift. As a result, employment numbers might decline, depending on the actual hours they end up working: the higher the hours of work, the lower the number of workers employed gets, and vice versa. 

The 12-hour spread-over rule also has adverse implications for women, especially those in women-intensive industries such as garments. The garments industry spokespersons demanded 12 hours of work instead of eight hours, at the usual wage rate instead of double. 

Medical examination

One Rule in the OSHWCC restricts the annual medical examination to workers who have completed 45 years of age. This could exclude a good proportion of workers and constitutes “age discrimination” while also segmenting workers in establishments by age. In most new establishments and technology-oriented establishments, the proportion of younger workers is higher. The labour cost in such organisations will be lower. Is being 45 or over a proxy for worker loyalty? Or is it a threshold of how risk prone workers are, based on medical facts? Again, the gender element is missing. Consider some empirical facts regarding women workers in the garment industry: the average age of women workers is not more than 35 years. They are often dismissed at this age or become unemployable due to labour extraction strategies adopted by many garment factories. In such industries, a large number of workers will become ineligible for the annual health examination due to the new Rule in the OSHWCC. 

Worker safety 

Rule 19 mandates setting up of safety committees and safety officers only in establishments employing 500+ workers for factories in general. From Form-IX (E) (details of various health and welfare amenities provided) we deduce that factories engaging hazardous processes and employing 250 or more workers must constitute a safety committee. It is also amusing that the safety committee, ambulance room and safety officers are construed as “health amenities”! Items 4 [under section22(1)] and 5 [under section 22(2)] in the said form do not flow from the said provisions in the Code. The Rules concerning safety (19-27) are confusing and will have to be reformulated in sync with the mother clauses in the OSHWCC. Section 22(1) of OSHWCC stipulates that the appropriate government “may, by general or special order, require any establishment or class of establishments to constitute in the prescribed manner a Safety Committee…” With tremendous improvements taking place in the field of technology (robotics, automation, artificial intelligence, etc.) and the rise of capital-intensive industries, the average size of a factory will be less than 250+ or 500+; safety considerations could be significant in them as well if not more. The Code has promoted “bureaucracy Raj”, by empowering the appropriate government to notify orders, special or general, requiring an establishment or class of establishments to constitute safety committees and the Rules do not provide clarity as seen above. This is not a sound manner of making laws and regulations.

The OSHWCC Rules rightly provides for representation of women workers in Safety Committees, but it says there should be “adequate” representation of women on them. A concrete term such as “proportional” or even a prescribed certain percentage of women workers to be on these committees would have been better. Saying “adequate” could end up marginalising women workers for it is a subjective term. 

Further, the Rules regarding Safety Committees are confusing. One is not able to appreciate the difference between Rules 19 and 20, for example. The qualification of a safety officer for factories is not mentioned, as they are for mines, building and construction and port and dock workers. Rule 20 mentions the composition of the safety committee for all except mines, but does not spell out its numerical composition. Should not the composition of the Committee in factories carrying on hazardous processes be different from others? 

Contract labour and contractors 

Rule 69 stipulates that contractors (whether individuals or entities) should not be “undischarged insolvents or convicted any time during the last two years for an offence which is criminal in nature involving offences which are liable for punishment for more than three months of imprisonment.” One wonders what the basis for spelling out the latter criterion is—is it because of the (alleged) existence of mafia contractors? Further, while the criterion proscribes insolvent firms from obtaining a contractor license, it would have been more prudent for the Rules to specify the capital requirement, as China does. 

After a 2013 amendment to the Contract Labour Law, the minimum capital requirement of a labour dispatch company increased in China from CNY500,000 to CNY2 million (approximately US$76,000 to approximately US$3,00,000). Chinese labour regulations also prescribe the proportion of employees to dispatch employees. At any rate, in India, Section 47(2) says a contractor who does not fulfil the criteria and qualifications set in Rule 69 can always obtain a “work-specific license” and “supply or engage contract labour, or execute the work through contract labour…”

Rule 70 prescribes the conditions for securing a license by a contractor, which are not better than those in the extant Rule 25 of the Contract Labour (Regulation and Abolition) Central Rules, 1971. Further it comprises illogical clauses such as condition (c): “...if the contract worker of the contractor is working at the premises of the principal employer then it shall be the responsibility of the principal employer to provide the facilities or amenities such as toilet, wash-room, drinking water, bathing facilities if required, changing room, first-aid box, canteen and crèche.” How does this become a condition for license of a contractor? It could have been a condition for securing registration of the principal employer, instead. 

Again, consider the illogicality of condition (e): “in case the contractor fails to make payment of minimum wages to the contract worker, then the Chief Labour Commissioner (Central) or his representative, shall cause such payment to be made to the contract workers who have not been paid out of the security deposit maintained under rule 76 including by invoking the bank guarantee.” This is a protective provision which must figure elsewhere and not as a condition for securing a license. It also contains a vague clause, (d): “all other facilities and entitlements shall be provided by the contractor.” It is not stated what constitutes “all other”.

In the new Rules, the inspector-cum-facilitator or ICF is supposed to adjudicate disputes on “whether the work is of a similar kind” while in the existing Rules the Deputy Chief Labour Commissioner (DCLC) (Central) is the designated authority to do this. So is the ICF equivalent to the DCLC in terms of knowledge, and is the former equipped to handle sensitive disputes of this kind? We are not told. 

Inter-State Migrant Workers:

The existing regulations concerning inter-state migrant workers (ISMW) provide for journey allowances without any criteria. According to the proposed Rule 85, a ISMW who has worked for at least 180 days in the preceding 12 months will be eligible for a round trip journey allowance. If an ISMW leaves their job with Firm A in the middle of the employment period, then they can carry forward the employment tenure credit to the next employer, say Firm B, to complete the eligibility period of at least 185 days. While the intent behind the Rule is to ensure workers get the journey allowance, there are some problems. The Rule assumes that the circulating migrant worker can get another job easily and become eligible for the journey allowance. 

Further, the next employer, Firm B, will probably not employ a “liability-carrying”, relatively expensive ISMW who is entitled to the journey allowance. As a consequence, the ISMW might be forced to work with Firm A even if they want to quit. The Rules pragmatically say that Firm B will accept the self-certification by the ISMW. However, given the vulnerable position of an ISMW, employers are unlikely to accept the self-declaration. The Rules can therefore provide a portable unique identification number and a card to the ISMW—which means there needs to be a provision to register such workers. Further, there could be a double linkage for the contract, construction and ISMW workers in terms of Aadhaar and a bank account number. 

The author teaches human resource management at Xavier School of Management, Jamshedpur. The views are personal.

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