Ease Of Doing Business


Government should ensure labour does not lose a share of progress

On Wednesday the Parliament passed three key labour reform bills which are aimed at improving the ease of doing business and providing universal social security to workers at the same time. The three laws — the Industrial Relations Code; the Occupational Safety, Health and Working Conditions Code; and the Code on Social Security — along with the Code on Wages passed last year are intended to attract investments and create job openings by promoting ease of doing business. There is assurance from the government that these laws would safeguard the interests of workers by providing universal social security to them by expanding the ambit of Employees’ Provident Fund Organisation and Employees’ State Corporation of India. They are expected to provide a social security fund to around 40 crore workers in the unorganised sector. The central government has merged 29 different labour laws in the country and divided them into four codes for easy implementation under a transparent system to benefit all in the changed business environment.

The industry has hailed the reforms to reset the entire regulatory framework which will provide enterprises with flexibility, transparency and clarity. However, all trade unions, including the Bharatiya Mazdoor Sangh, an affiliate of the Rashtriya Swayamsevak Sangh, have objected to sweeping powers given under the newly formed codes to bureaucrats providing for changes. They have also objected to the new provision in the Industrial Relations Code with regard to trade union activities. The trade union bodies are of opinion that the new provision is aimed at promoting a single union and eliminating the others. The Industrial Relations Code also provides for removal of impediments to winding up of companies and allows firing of staff without government permission in business establishments with up to 300 workers as against 100 now. This provision already exists in 16 of 29 states in the country. The government is of opinion that this will help attract more investments and job creation but the trade unions and others are sceptical about it.

It has been provided under the changed laws that the benefits under Employee Provident Fund Organisation can be availed by all firms with 20 or more employees as the existing Schedule defining establishments has been done away with. However, with the government providing for closure of firms below staff of 300 workers, there is the possibility of irresponsible employers taking advantage of the amended law and leaving the workers in the lurch. It has to be noted that supervision of the firms by concerned authorities has been lax over the years and the changed laws could act to their advantage. Another provision in the amended laws that virtually takes away the rights of employees in the private sector to resort to strike in cases of disputes has not gone down well with the workers and trade unions as it provides for 14 days’ notice period.

It is necessary that steps should be taken for promoting ease of doing business by changing the laws, many of which have become obsolete, to give fillip to the economy and create jobs. However, care has also to be taken to protect the rights of workers, most of whom work in the unorganized sector and could be at the mercy of whims and fancies of those employing them. It is dismaying to note that the country does not have reliable data of its workforce, especially in the unorganised sector, as a result of which the hapless workers are deprived of benefits. Some cases of this were witnessed during the lockdown and subsequent march of the workers who lost their jobs and were forced to migrate to their home states as also in the case of farmers’ suicides. What the heartrending scenes of them walking for hundreds of kilometres on foot brought in focus was the total lack of security of employment of the workers in most of the sectors. Given the flexible nature of work, men and women employed in construction and other industries could lose out on benefits. While allowing ease of doing and promoting business, the government should establish a robust mechanism to make sure that workers are not deprived of the benefits by unscrupulous employers who could take advantage of the changes in laws.