Phased Introduction Of Labour Codes On Cards

The labour ministry is mulling over introducing the four labour codes in a staggered way, beginning with the least controversial and pro-labour codes.

The two codes which may come in from the next fiscal will be the Social Security Code and the Code on Occupational Safety, Health and Working Conditions. The idea is to get going on the codes, which have been pending for implementation for more than a year now, said people aware of the matter.

The Parliament had passed the Code on Wages in 2019 while the Code on Industrial Relations, the Code on Social Security and the Code on Occupational Safety, Health & Working Conditions were passed in 2020.

“There is a thinking at the highest level on implementing the codes in phases, though no decision has been taken yet,” a senior government official aware of the deliberations told ET on condition of anonymity.

Labour secretary Sunil Barthwal did not respond to a query from ET.

The Social Security Code, 2020 provides for a universal social security, starting with the gig workers who would be covered under the Employees’ State Insurance Corporation, besides paving the way for the government to merge all existing social security schemes under the code.

The Code on Occupational Safety, Health and Working Conditions (OSH&WC Code) provides for longer work hours, double the wages in case of overtime beyond the fixed work hours and a single licence for contractors and staffing firms, allowing them to operate pan-India under one registration, as against the prevailing situation where they have to obtain separate licences for operating in each location.

“Given the fact that the codes have long been enacted, the central government would introduce them in a phased manner and may reach out to states to fast-track framing rules across the Social Security Code and the OSH&WC code which are considered least controversial,” said labour expert KR Shyam Sundar.

The other two codes, the Code on Wages, 2019 and the Industrial Relations Code, 2020 have financial implications on the employer and hence the industry has been seeking more time from the government to tide over the Covid-19 crisis before it takes on any additional financial burden.

The Code on Wages provides for a minimum statutory wage for the entire country while capping the allowances to 50% of the wages, a move that will cost more to the employer and would require tweaking of existing salary structure.

The Industrial Relations Code, on the other hand, eases rules for hiring and firing for employers while limiting the power of the trade unions to negotiate and significantly reducing the scope for employees or unions to go on a strike.

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