Let labour laws ‘work’ for people

It has ramifications for employees across the board, from the shop floor to the top management. The four new codes comprising industrial relations, wages, social security and occupational health safety (OSH) and working conditions are set to streamline existing 44 central labour laws and the four codes are being planned for implementation in one stretch. For office-goers, what might come as a googly is the decision to increase the working hours - from nine to 12 hours, and if one punches in 12 hours, then the workweek is reduced to four days. 

Take-home salary will also be hit, as the new wage code mandates capping allowances at 50 per cent which will lead to as much as half the monthly pay being calculated as basic wage. An increase in the basic pay will lead to a higher PF contribution, which will curtail the salary one takes home, and increase employer liability. It is known that many employers choose to split the basic wage into multiple allowances to retain a lower PF contribution and a lower tax burden.

Observers remark that those in higher salary brackets might witness more significant changes to their pay structures, while reformative measures such as prohibiting work for over five hours at a stretch and improved provisioning of overtime benefits might offer relief to factory workers. To enable ease of doing business, businesses are allowed to retrench workers or shut down units without prior permission of the government. Ironically, the new codes have been introduced considering social security for vulnerable employees, a concept highlighted when the pandemic hit India. The migration of millions of inter-state migrant workers or ISMW who were rendered jobless and homeless once lockdowns were announced, was an indication of how broken our system was when it came to the protection of low-wage workers.

For corporate staffers, the revisions are the equivalent of old wine in a new bottle. At a time when economies globally are mulling hybrid work models that incorporate a healthy mix of telecommuting and in-person attendance, here we are harking back to a time when productivity was measured by the hours spent in the office. The pandemic has drastically upended work. Everyone we know is investing more time at work, whether it’s being done from home or office. And until a few months ago, there were few avenues to spend what was earned, considering the closure of recreational and social spaces.

Another troubling aspect of the Centre’s plans is that transitioning to the new system will pose challenges on the tech front. Digitisation is key to implementing any such long term initiative aimed at formalising the labour sector. As a silver lining, ISMWs are now treated on par with contract labourers as per the new code. And aggregators have been mandated to set aside one per cent of their annual turnover towards a social security fund to help gig and platform workers in emergencies. The new laws have taken steps to ensure minimum wage, and the payment of timely wages, while bringing all workers under the social security net, thanks to the enhanced ESI (Employees State Insurance) cover.

The idea is not to turn India into a manufacturing or warehousing hub, like how China has managed to do, at the expense of millions of frustrated factory workers, who have to be protected by safety nets placed outside the perimeter of high rises. India will need to expand its definition of productivity and long term growth, vis-a-vis the workforce. There are perils in embracing legislations drafted at achieving the status of an economic superpower in the shortest possible time - like turning India into a $5 trillion economy by 2025. Thinking things through could help us, in being not just a thought leader, but a leader in deed.