Photo: Hindustan Times
New Delhi: The central government plans to reduce 44 labour laws to just five as it seeks to make it easier for companies to do business in India and recapture the momentum it has lost in recent months. The labour ministry also believes that the move will result in better compliance.
Four laws will deal with wages, social security, industrial safety and welfare, and industrial relations, said two government officials familiar with the matter who asked not to be named. The fifth will be a law for small factories.
The officials said that work on the proposed laws has started and that all will eventually be tabled in Parliament as new bills. Once passed, they will change India’s labour rules framework. The officials added that the labour ministry is confident of steering the bills through Parliament. Still, the move will likely face resistance from opposition parties.
“Related laws will be merged to create labour codes for particular aspects of industries,” said one of the officials. For example, nearly a dozen laws related to social security, including the Employees’ Provident Fund and Miscellaneous Provisions Act, Employees’ State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees’ Compensation Act “will be merged to create a single social security law or code”, one of the officials explained.
Similarly, several industrial safety and welfare laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, will be merged to create a single code on industrial safety and welfare. Likewise, the Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act and a few others are being merged to create a “single legislation called Wage Code Act”.
The fourth law, the Labour Code on Industrial Relations, will combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.
The objective of the exercise, the second official said was to “relook at laws that are perhaps a hindrance to growth as well as job creation”.
“We are merging all 40 odd laws and creating five. Four will be labour code laws. Another will be for small factories as they need special treatment.”
The second official added that the labour ministry expects the change to also improve compliance. That will happen if the government makes the process of reporting smoother, said Rituparna Chakraborty, senior vice-president of staffing company Teamlease Services Pvt. Ltd. “If some industries are not complying with some labour laws then it’s not out of their own will but due to complexities involved. Bringing all laws down to four or five shall lead to homogeneity of definitions which means less arbitrage,” she added.
Chakraborty and D.L. Sachdeva, national secretary of the All India Trade Union Congress, a trade union affiliated to the Communist Party of India, said that the idea of replacing multiple laws with a fewer number of codes isn’t new. “The problem is not in the name but the intention. The intention here seems to help the rich and control poor workers. The aim, it seems, is to benefit industries at the cost of workers. Job creation is good but how about providing safety and security to the poor labourers?”
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