Initiatives taken towards rationalising labour laws

Relevance: Mains: G.S paper II: Polity: Governance & Sociology: Industrialization and Urbanisation in India: Informal sector, child labour.

Context:

  • That the archaic labour laws in India need to be amended is beyond debate.
  • Protection is for only a tiny section of the labour force, facilitated rent-seeking, and have laid the ground for the casualisation of the labour force, the phenomenon of the missing middle in manufacturing, and the substitution of capital for labour in a capital deficient and labour abundant economy.

Rationalising labour laws:

  • Rationalising labour laws has been on the policy agenda for decades.
  • Yet, labour reform hasn’t taken off because the debate has been framed in terms of empowering the management while curbing the rights of labour, as is evident from industry’s often-demanded concession of the power to fire workers without seeking government permission.
  • But now, a number of states have embarked on this politically contentious course again.
  • While efforts to reform labour laws should be encouraged, coming at a time of acute economic distress and labour insecurity, in a crisis that has exposed the lack of safety nets and the limited access of workers to healthcare, they must keep the concerns of labour at the centre.

Key initiatives taken:

  • Initiatives taken by states such as Madhya Pradesh — which aim to reduce the frequency of inspections, ease the registration and licensing process, and enhance the thresholds of when the regulatory architecture kicks in — are steps in the right direction.
  • As is the introduction of fixed-term employment to help companies sidestep the contractor system. But, removing firms’ obligation to comply with provisions of the Industrial Disputes Act constitutes blatant disregard for workers’ rights.
  • To be sure, certain parts of the Act which deal with the hiring and firing of workers have rightly been seen as impediments to flexible labour markets.

Degree of protection or redressal mechanism:

  • Yet, instead of rationalising or doing away with some chapters, giving firms a free pass over complying with the Act strips workers of any degree of protection or redressal mechanisms.
  • It further reduces the bargaining power of labour, their right to negotiate.
  • While fixed-term employment is a welcome half-step, states should ensure that these contract workers receive social security benefits similar to permanent workers, as is the case under the Centre’s model law.
  • If regulations designed to support labour are suspended, it can effectively remove the distinction between permanent and contractual workers. Such moves could trigger a race to the bottom.
  • They also raise questions over the architecture of the labour market of the future.

Conclusion:

  • Any shortsighted move now will only end up increasing workers’ vulnerabilities at a time of acute distress, when unemployment is likely to be at all-time highs, and when the national consensus is veering towards providing labourers safety nets.
  • Labour reform for long has framed labour as an adversary, now may be the moment to see it through their prism — this is the only way to make enduring progress.

 

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