Indian Labor Laws: Should They Be Unified into a Single Workforce Law for All?

The Indian government should integrate all labor laws and come up with a single common workforce law for all industries, sectors, and enterprises, irrespective of enterprise size, gender, etc. There are more than 30 labor laws that need to be integrated into one common workforce law, i.e., the Indian Workforce Law.

Irrespective of gender, size of establishment, or location, the Equal Remuneration Act and the Maternity Benefit Act are crucial pieces of legislation to ensure fair treatment in the workplace.

Please share your thoughts on integrating these acts, with specific reference to the above.

Dear Friends, as you are well aware, under the Constitution of India, Labour Law is a subject in the concurrent list where both the Central and State Governments are competent to enact legislation. As a result, a large number of labour laws have been enacted catering to different aspects like occupational health, safety, employment, training of apprentices, fixation, review and revision of minimum wages, mode of payment, payment of compensation to workmen in accidents or causing death or disablement, bonded labour, contract labour, women labour and child labour, resolution and adjudication of industrial disputes, provision of social security such as provident fund, employees’ state insurance, gratuity, provision for payment of bonus, etc.

Similarly, there are different kinds of statuses regarding the registration of establishments/business entities like Factory, Shops, Traders, Contractor, Professional, Seasonal, Non-Profit earning organizations, etc. The working culture and scenario also differ based on geographical status.

So, it is very difficult to integrate the different establishments and different people into a single pattern. However, the integration of various documents like registers/returns in different labour laws is already in process. The Labour Office is issuing a UIN (Unique Identification Number) for every organization. Through the UIN, we have to fill the data in a single format which will serve the purpose of different registers/documents.

Please find attached a note (which I received from this site) on the same being issued from the Labour Office. Though I am unaware of the practical approach of the UIN, in the long run, it can be very useful for professionals like us. This will reduce similar nature paperwork of different acts in different forms.

In the early days of Mr. Modi's regime, I remember there was an attempt to repeal a few outdated acts and merge a few, such as the Payment of Wages Act and Minimum Wages Act, with a few other acts. I'm not sure what has been done on this front. It's always possible to merge/combine similar provisions contained in more than one act. Moreover, even acts in the concurrent list also have common provisions such as the Shops & Commercial Establishments Act, PT, Factories Act, etc., which could be consolidated into a single central act, leaving only the empowered state governments to enact schedules and rates applicable within the states. It's worth doing.

Why not have one common Act in India for working sections irrespective of the category of employment? We have the IT Act, Company's Act, EPF Act, ESI Act, MV Act, ID Act, Bonus Act, Maternity Act, Apprentice Act, etc.

V. Murali

It is correct that the Modi government tried to scrap, amend, and modify old acts and rules. The concerned Labour Ministry should take interest in this. A common or separate meeting of owners and workers' representatives is essential. Politicians are busy playing their games. Opposition parties, including the Leftists who are supposed to be experts or champions, are significant.

Regards

Yes, although the need for integrating all labor laws into a single labor code was felt long ago, every successive government lacked the will. The National Commission of Labor, headed by the former Chief Justice of the Supreme Court, submitted a comprehensive report on this, which contained recommendations on integration under categories like wages, industrial relations, social security, among other things. However, this and subsequent reports are gathering dust without any fruitful actions. The most irritating part of all labor laws is the widely different definitions of 'employee/workman' and 'wages', which have led to contradictory interpretations and numerous court cases. Hopefully, the Modi Government does something about it on a war footing.

Regards, V.L. Nagarkar
HR Consultant

Simplifying Labor-Management Relations in India

It is true that both the Centre and the State can pass laws on labor. The conditions in different states differ, and there are difficulties. But after 70 years of independence, we must all strive to simplify labor-management relations. It is really complicated now because of the plethora of labor laws. We can consolidate laws in 4-5 ways.

Consolidating Wages Laws

Firstly, wages laws should include the Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act, Payment of Gratuity Act, and Equal Remuneration Act.

Consolidating Administrative Laws

Secondly, administrative laws should include the Factories Act, Shop Act, Mines Act, Plantations Act, Motor Transport Workers Act, Building and Construction Workers Act, Bonded Labor Act, Child Labor Act, and Private Security Guards Act.

Consolidating Relations Laws

Thirdly, relations laws should include the Industrial Disputes Act, Trade Unions Act, Standing Orders Act, Bombay Industrial Relations Act, MRTU Act, Contract Labor Act, and Employment Exchanges Act.

Consolidating Social Security Laws

Fourthly, social security laws should include the ESI Act, PF Act, Employees' Compensation Act, Maternity Benefit Act, and Bombay Labor Welfare Fund Act.

We should also simplify the relationship. The one who works for another and for remuneration is a worker, whether permanent, temporary, contract, managerial, supervisory, or anyone. The one who asks others to work for him and pays for the work done is an employer, whether proprietary, partnership, limited company, government, NGO, or anyone. Finally, any dispute between the worker and employer must be settled or decided within 6 months, and the appeal within 3 months.

This will promote a bilateral relationship, a matured relationship, an all-inclusive system, no subsidy, no government intervention on a large scale, and no caste system in the industry.

Regards, Vibhakar Ramtirthkar

Yes, it is true that labor is in the concurrent list, allowing both the Centre and states to enact laws on the subject of labor. Notwithstanding this, the labor laws can be combined to reduce the number. The Central Government seeks to bring various reforms in labor laws, and simplification and codification of laws is one among them. The Indian labor laws have become archaic and need to be rationalized to facilitate the process of 'Make in India' to gain momentum. Hope this will happen soon.

Regards, B. Saikumar
HR & Labor Law Advisor
Navi Mumbai

Dear all,

Our law is sufficient to safeguard labor/workers. However, greedy advocates and the system/procedure of the courts undermine this. A disabled worker has been seeking justice in the Delhi High Court for 26 years, solely due to unethical and greedy advocates. What can be done? The need is to change the procedure. If a worker wins in the labor court, why is there a need for the High Court? Is the labor court's decision not sufficient?

There should be only one court, and there should be no appeal. This is one of the protections for labor, and time-framed decisions are a must.

Thanks

Integration of all labor laws is literally possible, and the Indian government needs to come up with an integrated "Indian Workforce Policy" rather than an Indian Workforce Law. "Law should be transformed into Policy" for the betterment of the economy, enterprises, and workforces.

The 2nd National Commission on Labour

In the current topic of discussion, it is pertinent to mention that the 2nd National Commission on Labour was set up on 15 October 1999 under the chairmanship of Ravindra Varma. This Commission submitted its report to the then Prime Minister Atal Bihari Vajpayee on 29 June 2002.

Recommendations and Labour Codes

This commission made certain recommendations to the Government. Consequently, the Government has taken steps for the simplification, amalgamation, and rationalization of Central Labour Laws, replacing them with four Labour Codes:

1. Code on Wages;
2. Code on Industrial Relations;
3. Code on Social Security & Welfare; and
4. Code on Occupational Safety, Health & Working Conditions.

Accordingly, our Government has introduced the Labour Code on Wages Bill 2015. This aims to consolidate and amend the law relating to wages and bonuses and the matters connected therewith or incidental thereto.

Draft Labour Code on Social Security & Welfare

The Government released a Draft of the Labour Code on Social Security & Welfare on March 16, 2017, by amalgamating all existing Labour Laws related to Social Security, totaling 15 Labour Laws.

It is a good move by the Government. However, the integration of all Labour Laws into one common Workforce Law is not possible. Even codifying it into four segments, as stated, will have a lot of difficulties, in my view.

Unification of Labor Laws: A Step Forward?

Sir, it is good that the government has come forward with the unification of various labor laws, and recently, the government has framed the Draft Code on Social Security & Welfare. Through this code, various independent departments like EPFO and ESIC will be merged with other social security laws presently in existence in various states.

Challenges in Implementation by State Governments

But past experience suggests that handing over various labor-oriented schemes for implementation to state governments is a total failure. Take the cases of schemes of labor welfare under Acts/schemes namely - BOCA, Unorganised Social Security Act, RSBY, etc., where the implementation, in my opinion, is a total failure. The contributions made for the welfare of the workers actually go to the government treasuries of the state governments. Either the said money is not spent for workers' welfare, or if spent, there is huge corruption. Even experts and seniors can see that the ESI Hospitals run by the state governments are primarily in bad condition, and the states are happy to run such hospitals on the same pattern as they are running their own civil hospitals.

Concerns Over State Control of ESIC and EPFO

Under the above Draft Code on Social Security & Welfare, ESIC and EPFO will be handed over to the state boards, which will be controlled by the concerned state governments, apparently according to their own whims and fancies.

Questioning the Usefulness of Unification

I must submit to the seniors and experts: what is the use of such unification of labor laws? I think, in the present scenario, EPFO and ESIC are providing the best services to the eligible working class because these departments are controlled by central boards and are independent of any political influences. The state governments are mainly influenced by populist schemes with the sole motto of catching maximum votes in the next general elections.

Compliance with ILO Standards

In addition, ESIC, which is controlling ESIS, is primarily based on the ILO convention of Social Security Minimum Standards. Will the state governments be in a position to comply with such standards and policies of the ILO and continue to make ESIS financially viable and workable?