The Central Government with an intent to overhaul the existing legislative framework has deliberated on the idea of reducing the number of legislations to just 5. The Government seeks to reduce the hardships that companies currently face under the current system, wherein they have to ensure compliances of a mammoth 44 labour laws. The Ministry of Labour believes that it will increase the interest of companies to do business in India, which has lost its pace in the past few months.
Certain officials from the ministry informed, without disclosing their identity that the Ministry plans to concentrate and aggregate the current framework into five major heads, namely, wages, social security, industrial safety and welfare, industrial relations and small factories.
The officials also informed, that the Ministry has already commenced its work on the proposal and the Bill shall be soon introduced in the Parliament. The Ministry believes that, the change ensuring the social welfare, shall not face much resistance from the opposition.
“Related laws will be merged to create labour codes for particular aspects of industries,” said one of the officials. For example, nearly a dozen laws related to social security, including the Employees’ Provident Fund and Miscellaneous Provisions Act, Employees’ State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees’ Compensation Act “will be merged to create a single social security law or code”, one of the officials explained.
Similarly, several industrial safety and welfare laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, will be merged to create a single code on industrial safety and welfare. Likewise, the Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act and a few others are being merged to create a “single legislation called Wage Code Act”.
The fourth law, the Labour Code on Industrial Relations, will combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.
The officials also informed that the objective of the entire exercise is to reduce the hindrances that companies face in the compliance of a plethora of laws. The same shall also reduce the unemployment rate in the country
“We are merging all 40 odd laws and creating five. Four will be labour code laws. Another will be for small factories as they need special treatment.”
It is a welcome change for the industry. Major market players which often face penalties for non-compliance believe it shall reduce the complexity of the system, which was the pivotal reason for such non-compliances. A Senior Vice President also added, that the change shall also bring homogeneity among the laws and reduce the arbitrariness.
The change also faced criticism from the All India Trade Union Congress, which believes that the intention behind reducing the number of laws is benefiting the rich people and also creating employment opportunities. However, the Union also stated that the same shall not be done at the cost of the safety and security of the labourers.