Delhi, Oct 15,2020: Recently, the Parliament has cleared the three labour codes — the Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020, and Occupational Safety, Health and Working Conditions Code Bill, 2020. While the government claims to expand social security to the gig, unorganised sector, and migrant workers, experts fear that Industrial Relations Code Bill will diminish the employment security of the workers.

The Industrial Code Bill — The Problematic Provisions

The Industrial Relations Code states that the provision for standing order will be applicable for every industrial establishment wherein 300 or more workers are employed. At present, industries with 100 or more workers need to comply with standing orders. Further, an establishment having at least 300 workers (at present it is 100) is required to seek prior permission of the government before closure, lay-off, or retrenchment.

Gautam Khaitan says that this implies, the code would enable industrial establishments (with less than 300 workers) to introduce arbitrary service conditions for workers. It will provide greater flexibility to employers to hire and fire workers without government permission and too little protection to employees.

Industrial Relations Code Bill, 2020 will take away the rights of the workers to strike. It provides conditions on legal strikes right of the employees. It prohibits strikes without a 60-day notice, and while the legal proceedings are in the tribunals and 60 days after such proceedings are concluded,” he explained. At present, there are few restrictions on the legal strike only on the person employed in public utility service. The Bill proposes to extend the aforementioned limitations for all the industrial establishments.

The Other Two Codes

While criticising the Industrial Code Bill, 2020, Gautam Khaitan welcomed the Social Security Bill, 2020, and the Occupational Safety, Health and Working Conditions Code Bill, 2020. He says, “These two bills propose to expand the social security to the migrant workers. It also tabled the introduction of the establishment of the National Social Security Board to recommend policies and schemes on workers in unorganised sector to the government. Moreover, it also proposes that the employers will have to contribute 1-2 percent of their annual turnover for the social security of such employees.”

“The Occupational Safety, Health, and Working Conditions Code defines migrant workers as the ones who voluntarily came to other states outside the home state and obtained employment with an earning up to INR 18,000 a month,” he adds. Gautam Khaitan calls it the first step towards the comprehensive legal recognition of such workers in contrast to the present provision that only recognises contractual employment.

The End Note

“In the current and changed economic scenario post COVID-19 pandemic, the need of an hour is to balance the rights of workers as well as shaping India’s economic recovery. Bias towards one over the other will impact India’s prospects in long run. In a nutshell, these are pro-employer reforms that will facilitate ease of doing business in India,” concludes Gautam Khaitan

An eminent corporate lawyer, Gautam Khaitan is the Managing Partner of OP Khaitan & Co. With over three decades of experience in the field, he has handled various corporate and litigation work for various leading national and multinational companies, banks, and financial institutions all over the world.

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