Labour Code on Industrial Relations – Free PDF Download

• Code on Industrial Relations is one of the 4 proposed labour  bills long envisaged to replace 44 archaic labour laws.

• The industrial relations code is the third out of four labour  codes that have got approval from the cabinet.
• The Labour Code on Wages has already been approved by  Parliament in August.
• While the Labour Code on Occupational Safety, Health and  Working Conditions has been referred to the standing  committee of labour.
• This code is meant to simplify and merge three central labour  acts including:-
• The Trade Unions Act, 1926,
• The Industrial Employment (Standing Orders) Act, 1946,  The Industrial Disputes Act, 1947.

MAIN  IDEA  BEHIND  THE  NEW  CODE

• The idea is to improve the working conditions of the  contractual staff and bring them on par with the  regular employees.

HOW  WILL  IT  BENEFIT  EMPLOYERS?

• Since the idea is to improve working conditions of the contractual  staff and bring them on par with the regular employees,
• Thus a company need not have multiple employment policies for  contractual and regular staff.
• Especially for areas like maternity leave and extended leave for  mothers, a similar policy will be followed which would make the  management process easier.
• In the past, leaves were a bone of contention between companies  and labourers.
• A crucial aspect of the new draft code is the fixed-term  employment proposal that has also been welcomed by the  industry.
• This will mean that the respective companies would not need  to engage with any third-party contractors.
• Instead, under the new regime, they will be able to hire  contract workers directly for a fixed tenure.
• Based on the type of job role, the contract period can be  tweaked making it easier for firms to hire and fire.
• Earlier, the contractors would play a role in these matters.
• Now, the employment period can be decided by the company  itself.
• Later, if the particular job gets redundant, worker can let go.
• For instance, if a welding professional has been hired, and the company is able to procure a machine to perform the  same function at a later date, this professional can be laid off.
• In the past, firing staff would lead to a dispute since there was  no concept of a fixed-term employment.

HOW  WILL  IT  HELP  EMPLOYEES?

• At present, labour disputes take a long time to be  resolved.
• The Industrial Relations Code has proposed setting  up of a two-member tribunal for settling labour  disputes.
• Earlier, there was a one-member team that led to  delays in getting a resolution.

• Further, a few government officers would also be  given the power to look into cases and also  impose penalties.
• This is expected to ease the burden on the  tribunals that are already handling several  thousand cases.
• This will ease the pain for employees who  otherwise lose pay while attending the often-  prolonged tribunal hearings.
• The social security benefits will be extended to all types of workers.
• This means that all company benefits including insurance and  leave encashment could be provided to these workers.
• Earlier, contractors would be passed on these benefits, and there  were reports of leakage of cash/insurance amount.

CONCERNS

• For workers, being relevant from a skilling perspective has been a  cause of concern in India.
• Re-skilling of staff will be a key priority under the new regulations.
• The government has said that there will be re-skilling fund that  will be utilised for crediting to workers.
• There is also the fear of retrenchment.
• While there was fear of only mid-sized companies (with 300 or  more employees) being mandated to take government permission  to retrench staff,
• The draft code has retained it for companies with 100 employees  or above.
• This means even if a small company/factory were to take a  retrenchment decision, they would have to get prior permission  from the government to do so.

CHALLENGE  FROM  STATES

• The biggest challenge will be in getting these labour  codes approved in the near term and persuading  states, to come on board,
• As it is under the concurrent list.

WHAT  THE  ECONOMIC  SURVEY  SAYS?

• This year’s Economic Survey made the point that- Units in states that have made the transition towards more flexible  labour markets were 25.4% more productive than their  counterparts.

WHY  THEY  ARE  VERY  IMPORTANT  FOR  A  COUNTRY  LIKE  INDIA?

• In an economy where 10 million young people enter the labour  market annually, there is indeed a strong case for greater  flexibility on these laws.
• Even more so considering that Vietnam, Indonesia and  Bangladesh are far more competitive in labour intensive sector and taking advantage of US-China trade war.

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