Workers labour at a construction site in Dharamsala, India (Photographer: Sara Hylton/Bloomberg)

Government Seen Going Full Throttle On Labour Reforms Ahead Of 2019 Polls

The government will spare no effort to push through some key labour reforms in the new year and is expected to get Parliament's nod on at least two codes on wages as well as industrial relations before the upcoming general elections.

The labour ministry is already in the process of seeking the Union Cabinet's approval on amended wage code bill after its vetting by the parliamentary standing committee, so that it could be pushed for passage in the Parliament.

The Code on Wages Bill 2017 was introduced in the Lok Sabha on Aug. 10, 2017 and thereafter referred to the standing committee. Similarly, the Ministry of Labour and Employment is keen to push the passage of Code on Industrial Relations, in the run-up to the 2019 polls.

The ministry, however, has decided to remove certain provisions in the bill, drawing flak from trade unions.

In line with the recommendations of the Second National Commission on Labour, the ministry has taken steps for formulating four labour codes on wages; industrial relations; social security and welfare; and occupational safety, health and working conditions by amalgamating, simplifying, and rationalising the relevant provisions of the existing central labour laws.

Keeping the social security and welfare aspects of workmen better and intact, we are working in the direction of bringing reforms in various labour laws with objective of ease of doing business in new future. 
Santosh Gangwar, Labour Minister 

The minister also said that the government took several new initiatives in the labour and employment sector this year.

The ministry is also working on Code on Social Security & Welfare. A preliminary draft of the code was placed on the website of the ministry on Mar. 16, 2017, inviting comments of the stakeholders/public.

After considering the comments of various stakeholders, the ministry sought comments on a revised draft Code on Social Security and Welfare, 2018 on Mar. 1, 2018.

After tripartite consultations with unions and employers, the ministry has circulated draft labour code on Social Security & Welfare Bill, 2018 for inter-ministerial consultation recently.

Apart from this, the ministry is also pushing for subsidising paid maternity leave under a new scheme to encourage employers to employ women. The ministry had noted that the employment of women affected after increase paid maternity leave benefit.

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Maternity Benefit (Amendment) Act, 2017—which came into force from Apr. 1, 2017—increased paid maternity leave from 12 weeks to 26 weeks and benefited 18 lakh women employees.

In one of the initiatives, the ministry has proposed to bear seven weeks of salary to motivate employers. This policy will be finalised after approval by the competent forum.

The labour ministry also got the Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament this year which provides for hike in upper ceiling on tax-free gratuity amount from Rs 10 lakh to Rs 20 lakh.

The ministry also included the category of “Fixed Term Employment Workman” for all sectors in the Industrial Employment (Standing Orders) Act, 1946 and rules made there this year.

The objective of fixed term employment on one hand is to provide flexibility to the employers in order to meet the challenges of globalisation, new practices and methods of doing businesses while on the other, this would be beneficial for workers as it gives the “FTE Workman” the same statutory benefits as that of regular workers in a proportionate manner.

This would also substantially decrease exploitation of contract workers as the employer would directly hire the worker without any mediator in the form of contract for a fixed term.