India's new labour codes: What are they and why are central unions opposing them?

While massive farmer protests are raging across India over the three Farm Bills, country's labour unions are preparing to oppose the new four labour codes passed by the Parliament. Three of the four labour code bills, that comprise the government's labour reforms - condensing the existing 44 labour codes were passed by both Houses on September 22, amid an Opposition boycott. The fourth Bill -  Code on Wages (2019) has already been passed by Parliament in the previous session.

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What are the new labour Codes?

The three new labour codes are The Occupational Safety, Health and Working Conditions Code, 2020, the Industrial Relations Code 2020  and The Code on Social Security, 2020. These three bills have faced severe Opposition from worker unions, Opposition parties and several activists - terming it anti-labour. All these codes have been through a parliamentary standing committee before being revised as per recommendations, introducing new versions.

Key Highlights of the three codes (as per PRS)

The Industrial Relations Code, 2020: 

• Standing orders on matters related to workers' classification, holidays, paydays, and wage rates,  termination of employment and grievance redressal mechanisms is mandated to establishments with at least 300 workers, instead of 100 workers.
• Prior permission of the government before closure, lay-off, or retrenchment mandated to establishments with at least 300 workers, instead of 100 workers.
• The threshold for negotiating council of trade unions have been reduced from 75% workers as members to 51% of workers
• Workers may apply to the Industrial Tribunal in case of dispute - 45 days after the application 

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Code on Social Security, 2020:

• Social security funds for unorganised workers, gig workers and platform workers, with state governments setting up separate social security funds for unorganised workers. Any aggregator may set aside funds between 1-2% of the annual turnover as decided by govt for such social security funds - not exceeding 5%
• Definition of employees expanded to include more workers like - inter-state migrant workers, platform worker, film industry workers and construction workers.
• Gratuity period for working journalists reduced from five to three years.
• Penalty for unlawfully deducting the employer’s contribution from the employee’s wages is only Rs 50,000 fine with no imprisonment.
• Central government may defer or reduce the employer’s or employee’s contributions (under PF and ESI) for a period of up to three months in the case of a pandemic, endemic, or national disaster. Representation of central government officials in the National Social Security Board for unorganised workers increased to 10 members.

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Code on Occupational Safety, Health and Working Conditions, 2020:

• Factory definition expanded to  20 workers for premises where the process uses power and 40 workers where the process uses no power. 
• Manpower limit on hazardous conditions removed and mandates applying Code on contractors employing 50 or more workers instead of 20.
• Daily work hour limit fixed at maximum of 8 hours per day
• women will be entitled to be employed in all establishments for all types of work and employer required to provide adequate safeguards in hazardous conditions.
• Workers earning a maximum of Rs 18,000 per month, or such higher amount deemed as inter-state migrant workers and will be allowed to avail benefits like Public distribution system (PDS), building cess, insurance and provident fund.
• Central and state governments to maintain or record the details of inter-state migrant workers in a portal.

Why are labour experts opposing?

According to Indiaspend's analysis, the new Bills may impact the number of permanent jobs in seasonal factories - which will result in a decline in wages, benefits and work conditions and reduced accountability for companies. The report points out that as per the Bills' fixed-term contracts clause, there will be a reduction in the number of permanent jobs and that the ambiguity on the definition of 'trade unions', may lead to diluting working rights. With unclear terms for short-term workers, Indiaspend's report argues that states will have more authority on lay-offs. India is currently facing crunching job loss amid COVID-19. As per the International Labour Organisation, at least 41 lakh people in the country have lost their jobs while the Centre for Monitoring the Indian Economy (CMIE) estimated 2.1 crore salaried jobs were lost following the lockdown.

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Labour unions term codes - 'anti-worker'

Apart from market experts, central trade unions are opposing the new codes claiming they would “adversely affect industrial peace”. RSS-affiliated Bharatiya Mazdoor Sangh (BMS) issued a statement that none of the objections raised by it and other trade unions as well as the pro-worker recommendations of the Parliamentary Standing Committee on Labour was taken on board. Pointing to the amendment in standing orders, he said it may lead to companies indulge in 'hire and fire'. BMS  will hold its  national conference from October 2 to 4 where it will decide on the union’s future course of action against the codes.

Other unions like -   the All-India Trade Union Congress, the Indian National Trade Union Congress, the Hind Mazdoor Sabha, the Centre of Indian Trade Unions (CITU), the All-India United Trade Union Centre, the Trade Union Coordination Committee, the Self Employed Women’s Association, the All-India Central Council of Trade Unions, the Labour Progressive Federation and the United Trade Union Congress have held protests against the codes. On September 25, along with the farm protests, several of these unions staged a protest against these codes. The codes are yet to be signed by President Kovind, enacting it.