Explained: Labour Codes, its Phased Introduction, and Upcoming General Strike

New Delhi: On Wednesday, a major Indian business newspaper reported that the Union Ministry of Labour and Employment was considering introducing the four controversial Labour Codes in a staggered way, beginning with the bringing in of at least two of them in the next fiscal.

The idea, according to the report which quoted a senior government official aware of the deliberations, is to get going on the Codes, which have been pending for implementation since more than a year now. This is even as no final decision has been taken on the matter as yet.

However, the latest discussion over Codes, if true, clearly indicates a crucial shift in the position of the Central government: from 2020, when the then Labour Minister Santosh Gangwar targeted to implement all the four Codes in one go by December of that year. Incidentally, the ministry has, since then, missed at least three more deadlines – April 2021, July-August 2021, and October 2021.

What has stopped the Central government from introducing the four Codes, which were once – and still – hailed by its mandarins as a “much-needed-reforms”  directed towards deregulating labour law restrictions to enable creation of “more jobs” as well as “ease of doing business”? What does the shift – if any – in its thinking also mean for central trade unions, which continue to remain up in arms against the subsuming of Central labour enactments into Codes?

Current Status on Four Labour Codes

Touted as “reforms” by the Narendra Modi –led Central government, the three Labour Codes – Industrial Relations Code; Code on Social Security; and Occupational Safety, Health and Working Conditions Code – were passed in Parliament in September 2020 without a proper debate. The other code, Code on Wages, was passed in 2019. In total, they are set to replace and subsume 29 Central labour enactments.

As on last month, according to one media report, more than 28 months after the Code on Wages was approved by Parliament, and almost 15 months after the other three codes on social security, industrial relations and occupational safety and health were passed, all States and Union Territories (UTs) in the country are yet to notify their draft rules for the implementation of the Codes.

This is because labour falls under the concurrent list of the Constitution and thus it is required for both the Central and the state governments to form rules for the implementation of a Central legislation.

While 24 States and UTs had framed draft rules for the wage code by December 15, as per information with the Union Labour Ministry, only 13 had framed draft rules for the occupational safety code. Likewise, for the industrial relations code, 20 States and UTs had drawn up the draft rules and for the code on social security, 18 States and UTs had prepared the draft rules.

What is Stopping the Central government?

While, prima facie, it looks like the challenges in introducing the four Labour Codes are at the level of the state governments, which are taking time to prepare the rules for the Codes, political observers have argued that the delay in implementation is intentional: to avert a potential cascading effect during Assembly elections last year – this is arguably true for the upcoming Assembly elections, too.

To understand why so, let’s take a look at what the four Codes entail for the working population.

The Code on Industrial Relations, which deals with industrial disputes, trade unions, and safeguards against retrenchments and lay-offs, proposes to do away with the requirement of framing standing orders for the workforce in companies that employ up to 300 workers. This legally binding document, constituting terms and conditions of a service, currently applies to establishments having 100 or more workmen.

Likewise, the Occupational Safety, Health and Working Conditions Code, dealing with matters relating to workers’ safety and welfare, and workplace-related, allows states to grant exemptions to new factories from any provisions of the Code “in the public interest that is necessary to create more economic activities and employment opportunities,” subject only to conditions that the respective governments “think fit”.

While, the Code on Social Security fails to emphasise social security as a right, while not stipulating a clear date for enforcement of schemes, according to one group of organisation, and experts argue that all is also not okay with the provisions under the Code on Wages.

Thus, enlisting similar issues, an economist wrote last year: “the Union government has realised that there would be a huge political ramifications if these four “anti-worker” codes are implemented before the upcoming assembly elections.” Another media report has also suggested the role played by pandemic-triggered economic difficulties in holding back the Central government.

Trade Unions Up In Arms

Moreover, there’s another challenge too for the Central government as far as the implementation of the Labour Codes is concerned. The trade union movement is emboldened after the “huge victory” of the farmers’ agitation that ensured the repeal of reform-oriented farm legislations earlier last year.

The working population representatives have been up in arms since many years now, arguing that the process of codification of labour laws will tilt the labour regime to benefit the employers.

The 10 Central Trade Unions have called for a two-day nationwide strike for February 23 and 24. Notably, earlier this month, the Samyukt Kisan Morcha (SKM), the umbrella body that spearheaded the farmers’ agitation, also extended its support to the TU strike call.

Building on the idea of a “united” fight against a “common enemy”, trade unions pin their hopes for waging a sustained struggle now against the Labour Codes. Recent events, such as celebrating the 40th anniversary of the first all India general strike by carrying a similar message, provide evidence to the same.

Hence, even if the Central government has seemingly shifted its position to bring the Labour Codes in a phased manner now, after facing multiple challenges since many months now, it will mean little for trade unions in the country, whose main demand is scrapping of all the four Labour Codes.