On Wednesday, Parliament passed three primary labour reform bills that will provide employers with greater flexibility in hiring and firing while maintaining workers ' social security. In the Upper House, the three laws, the Workplace Safety , Health and Working Conditions Code, the Industrial Relations Code and the Social Security Code, were passed by voice vote in the face of an opposition filibuster over the expulsion of eight members. In response to the debate on the three bills on labour reforms in the house, Minister of Labour Santosh Gangwar said: "The purpose of labour reforms is to provide a transparent framework adapted to the changed business environment."
The minister told the house that the threshold for closure, lay-off and retrenchment in firms of up to 300 employees without government approval had already been raised by as many as 16 states. "States have been granted flexibility to change labour laws according to their needs," said Gangwar. He argued that keeping the threshold low at 100 is not good for job generation because it discourages employers from hiring more jobs than this and they purposely keep the strength of their employees below it. "Investors will be inspired to build large factories and hire more and more workers," said Minister Gangwar, explaining the reasoning behind this provision. He said these bills would safeguard workers' interests and provide workers with universal social security by extending the reach of the Employees ' Provident Fund Organization and the Indian State Corporation of Employees.
Gangwar also claimed that a social security fund will be in place to cover about 40 crore of unorganised sector employees. Commenting on the Social Security Code, the Minister said that incentives from the Employee Provident Fund Organisation will now be utilised by all businesses with 20 or more workers as the current schedule specifying facilities has been removed. In addition , workers of companies with fewer than 20 staff will be eligible to join the EPF, while the government will also be able to expand the EPFO benefits to self-employed workers, "said the Minister." The Minister tried to mitigate the apprehension that, under the new Code, workers' right to strike had been revoked.
"The aim of providing 14 days ' notice before the strike is to allow workers and employers to reconcile during this time," he added. The codes have been embraced by industry. "The ambitious reforms guarantee that the entire regulatory system will be reset to support millions of employees and provide stability, accountability and clarification for companies," Chandrajit Banerjee, the director general of the Indian Industry Confederation, said. According to the Indian Staffing Federation, in the coming years, the greater effect of these laws will be smoother, quicker and more compliant management of the workforce in India. “In addition to growing workforce formalisation, the direct advantage of ease of doing business will make India a greater magnet for overseas investment in the products and transport sector, logistics, agricultural and agro industries, manufacturing and supply chains, "said Lohit Bhatia, president of the Indian Staffing Federation.
All trade unions, however, including the RSS affiliate Bhartiya Mazdoor Sangh, opposed the sweeping powers granted to bureaucrats under the Codes to make reforms while objecting to some clauses of the Code of Industrial Relations. Pointing to the new clause in the bargaining union IR Code, BMS claimed that it was an open effort to monopolise the single union and exclude all other unions. "BMS General Secretary Vrijesh Upadhyaya said," The subsequent National Conference of BMS to be held between 2 and 4 October 2020 will determine the future course of action on the anti-worker clauses in the Labour Codes.
Four codes were drafted by the Ministry of Labour to integrate 29 central rules. The pay code has already been enacted, but it has not yet been enforced. The three codes that Parliament has approved will now go to the President for his approval. The Code on Occupational Safety , Health and Working Conditions, 2020, will consolidate and amend the laws governing the safety , health and working conditions of persons employed in establishments and related matters. Under the code, the government authorised a single licence for staffing firms to employ contract workers in different locations rather than several previously mandated licences. Under the OSH Code, it has raised the threshold cap of contractor employees from 20 to 50 thus opening up the hiring of contract staff in all areas would ease employer compliance.
The Industrial Relations Code, 2020, aims to consolidate and amend laws relating to trade unions, conditions of work, investigation and resolution of industrial disputes in industrial establishments or enterprises. The government has increased the threshold of the number of employees needed in a company to 300 out of 100 for retrenchment and closure of facilities without government approval, dramatically improving the ease of firing for employers.
The Social Security Code, 2020, will update and reform social security regulations. It aims to provide all staff, including unorganised workers and gig and network workers, with universal social security. Together, they account for over 90% of India's total projected population of 50 crore.