Ministry of Labour & Employment
Union Labour Ministry Allays apprehension about Labour Codes as misfounded
Ministry says Labour
Codes aimed at expanding labour welfare measures not only to existing
beneficiaries but also to over 40 more workers in unorganized sector
Posted On:
28 SEP 2020 3:06PM by PIB Delhi
The
Ministry of Labour and Employment has today allayed all fears and
doubts about historical game changer reforms bills known as Labour Codes
passed by Parliament a few days ago. Union Labour Ministry has stated
that the criticisms being aired are misfounded. In a pointed
clarification on raising employee limit of smaller Units for closure to
300, the Ministry has underlined that Department related Parliamentary
Standing Committee had also recommended increase in threshold from 100
workers to 300 workers for seeking prior permission for retrenchment,
lay-off and closure. It is only the aspect of prior permission of the
appropriate Government which has been removed and other benefits and
workers’ rights have been kept intact. The workers’ rights such as
notice before retrenchment, compensation at the rate of 15 days wages
per completed year of service and pay in lieu of notice period has not
been compromised. Further, the IR Code envisages an additional monetary
benefit equivalent to 15 days of wages under newly created Reskilling
Fund. There has been no empirical evidence to suggest that higher
threshold promotes hire and fire.
The
Ministry also said that the Economic Survey, 2019 has analyzed about
the pain of dwarfism prevalent in Indian firms. Dwarfism refers to
firms which are surviving for more than 10 years but their growth in
terms of employment is stunted. One of the inhibiting factors in
creation of employment was observed to be the threshold of 100 workers
under the Industrial Disputes Act, 1947. It was observed that threshold
under Labour legislation creates perverse incentive to remain small. The
State of Rajasthan in 2014 had increased the threshold from 100 to 300
workers and done away with the requirement of prior permission before
retrenchment etc., in case of firms having less than 300 workers. The
impact of increase in threshold in the state of Rajasthan, showed that
average number of factories in Rajasthan having more than 100 increased
significantly as compared to the rest of India. The total output in
those factories also increased. 15 more States have already enhanced
threshold to 300 workers.
It
further said that following the example of Rajasthan, Sixteen States,
including Rajasthan, had already increased threshold under the ID Act
from 100 workers to 300 workers, before passing of IR Code. These
States include, AP, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat,
Haryana, HP, Jharkhand, Karnataka, MP, Meghalaya, Odisha, requirement
of permission before retrenchment or closure does not serve much purpose
but at the same time leads to accumulation of losses and liabilities of
the firm on the verge of closure.
Even
in the existing ID Act, 1947, the requirement of permission was only in
respect of factory, mines and plantation. The requirement of prior
permission does not apply in any other sector.
Refuting
rumours that Fixed Term Employment introduces hire and fire, Ministry
said that Fixed Term Employment has already been notified by Central
Government and 14 other States. These States include Assam, Bihar, Goa,
Gujarat, Haryana, Himachal Pradesh, Jharkhand (apparel and made up)
Karnataka, MP, Odisha, Punjab, Rajasthan, UP (textile and EOU), and
Uttarakhand.
Non-availability
of fixed-term employment implied that an employer had options to either
employ on regular basis or through contractual basis. The employment
of workers through contractual basis means higher transaction cost to
employer, lack of permanence of contract labour, untrained, unskilled
contract labour. It also lacked committed and long-term relationship
between employer and contract labour, as there are on ground two
employers, i.e., contractor and principal employer.
The
Ministry emohasised that Fixed Term Employment is pro-worker. It would
be possible for an employer to enter into fixed term contract directly
with the worker or the employee rather than going through contractor.
There have been allegations that the contractors charges full amount in
terms of minimum wage and other entitled benefits like EPF, ESIC but do
not pass the same to the contract labour.
Union
Labour Ministry also said that a fixed term employee has been made
statutorily entitled for all benefits and service conditions equivalent
to that of a regular employee. In fact the code on Industrial Relations
also extends benefit of gratuity even for an FTE contract on Pro-rata
basis which is five years in case of regular employee.
Talking
about definition of Inter-State Migrant worker, the Inter-State Migrant
Worker Act, 1979 has been subsumed in OSH Code. The various provisions
of the erstwhile Act have been further strengthened in the OSH Code.
The
definition of inter-state migrant worker was very restrictive in the
Inter-state Migrant Worker Act, 1979. It provided that a person who is
recruited through a contractor in one state for employment in another
state, to be an ‘Inter-state Migrant Worker’. The OSH Code expands the
definition of migrant worker to include those workers who would be
directly employed by the employer besides by contractor. Further, it
has also been made possible that a migrant, who comes on his own, in the
destination State, can declare himself a migrant worker by registering
on an electronic portal on the basis of self-declaration seeded with
Aaadhar. The registration on portal has been made simple and there is
no requirement of any other document except Aaadhar.
The
Ministry in this regard has also taken steps to develop a national data
base to enrol unorganised workers including migrants, which will
inter-alia help migrant workers get jobs, map their skills and provide
other social security benefits. It will also help in better policy
formulation for unorganised sector workers, in general.
A statutory provision for helpline for migrant workers has also been made.
The
migrant workers will also be able to enjoy the benefits of portability
in respect of ration and avail benefits from building and other
construction cess. They will also get all other benefits of ESIC, EPFO
and annual medical check-up etc.
Criticism
of provision for allowing night shifts for women, Union Labour said is
patently wring as OSH Code entitles gender equality in the New India.
The Code envisages that women shall be entitled to be employed in all
establishments for all types of work and they may be employed during
night also. However, sufficient safeguards for employing women at night
have been provided. The consent of the women for employing them at
night has been made mandatory. Further, the appropriate government shall
prescribe conditions for safety, holidays and working hours or other
conditions before permitting women to work at night.
Ministry
also said that for the Rights for Working Journalists provisions have
been made to strengthen the same. These include expansion of definition
Working Journalist to include Journalists working in electronic and
digital media and allowing Earned Leave for “working journalist” on full
wages equivalent to not less than one eleventh of the period of
service. The leave can be accumulated and accumulated leave can be
encashed or availed.
It
further said existing provisions for welfare of working journalists
retained. The definition of Inter-State Migrant worker is same in the
Social Security Code and the OSH Code. Rules drafted under Code on Wages
provide for constitution of a technical committee for Working
Journalist for fixing the minimum wages under the Code for the working
journalist as defined in clause (f) of Section 2 of the Working
Journalist and other Newspaper Employees (Conditions of Service) and
Miscellaneous Provisions Act, 1955.
Further,
Under Social Security Code, the eligibility for gratuity for working
journalist has not been retained but the eligibility period has been
improved to three years of service instead of five years for others.
The Ministry has also said that new Welfare provisions have been introduced in the OSH Code –
(1)
For establishment carrying on hazardous and life threatening
occupations, the Government can notify coverage even on establishment
having workers less than the threshold.
(2) ESIC has been extended to plantation workers.
(3) Appointment letter has been made mandatory.
(4) Free annual health checkup has been introduced.
(5)
Bipartite safety committee has been introduced for establishments in
factory, mines and plantation in place of hazardous factories.
(6) Activities of the plantation worker dealing with like insecticides, pesticides have been included as hazardous processes.
(7)
Strengthening of provisions relating to inter-state migrant worker
and including provision of annual journey allowance to visit home-town.
The
Ministry has also said that the position of Trade Unions has been
strengthened by introducing decentralised registration process. Ministry
has dubbed apprehensions regarding 14 day notice period as totally
misfounded. It has said that it only adds an opportunity for resolving
the labour grievance before going on strike mandating establishments to
attempt solving the issues.
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