‘Totally meant for business houses’: Senior advocate Gayatri Singh on new Labour Codes

Effective November 21, the four labour codes – Code on Wages, Code on Social Security, Industrial Relation Code, and Occupational Safety, Health and Working Conditions Code – seek to ease regulations, ensure social security and ensure uniformity in wage structure for workers/employees.

Edited excerpts follow:

Q 1. What are your thoughts on the new labour codes?

Singh: The codes are totally meant for the business houses; to make it easier for them to invest and operate their businesses. It is not in the interest of the workers because it takes away the rights, which were enshrined under various laws, which have been in existence for several decades, and some of them came into being after many protests and strikes by workers.

These new codes do away with all these 29 Acts and replace them with codes which do not provide any rights to the workers. It is certainly not a beneficial code in favour of workers.

Q 2. What’s the leap you notice from the existing labour codes?

Singh: The purpose of doing away with the 29 acts and introducing new codes was to make it simpler, easier for the workers according to the government. Condense all these acts into one and make it easier for the workers to take benefits under the codes, but that has not happened.

The organised workers who were covered under the earlier acts are in fact also going to suffer, because all the rights that were there in those acts with regard to their security of tenure, security of employment, regularisation, benefits with regard to termination, layoff, closures, standing orders, which benefited workers in terms of laying down working conditions and with regard to how misconducts are to be dealt with.

All these provisions with which were for the benefit of organised sector workers, which were a minuscule 3 per cent of the total workforce. All that has also been done away with.

On the one hand, the organised workers have not benefited at all, and on the other, as far as the unorganised sector workers are concerned, who the codes are supposed to benefit, have absolutely no protection. About social security, making it universal social security has also not taken place.

Minimum wages have also not been extended to the unorganised sector workers.

Then there is the issue of the definition of workers. If you really want to make it universal, if you want it to be applicable for all workers, whether organised or unorganised, then the definitions have to be clear.

In this case, the definition of a worker, definition of an employee, definition of an employer, definition of contractor is not only vague, but it excludes a large number of workers, for example, ASHA workers, even gig and platform workers.

There is a separate section for gig and platform workers, but they are not considered as workers and agricultural workers. A large segment of workers who are earlier, not covered under the previous act are actually excluded even under the present codes.

Q 3. What has changed with respect to minimum wages? How is it going to impact one’s take home salary?

Singh: The minimum wages under the Minimum Wages Act provided for a schedule under which various industries over a period of time were  covered.

Industries, where the working conditions were very bad or they were totally unorganised workers, not getting any benefits. Those industries were covered under the schedule, once they were covered under the schedule, a committee was to be set up to fix minimum wages.

Once minimum wages were fixed for a particular industry, then those minimum wages were to be revised from time to time under the procedure set out under the Minimum Wages Act.
Workers from several industries were actually supposed to be benefited because minimum wages were fixed, which were above the starvation wages existing.

In effect, the Minimum Wages Act was not implemented. Many industries, which were supposed to have minimum wages were not covered. All that was definitely there, but by doing away with the Minimum Wages Act. Now under the minimum wages code, it does away with all with the scheduled industry.

Under this code, there will be a minimum flow wage fixed by the Central government and after that the minimum wage will be fixed by the state, but they must be over and above the flow wage that is fixed.
The problem is as far as the flow wage is concerned, there is absolutely no criteria set out for how one can determine the flow wage.

Earlier before the wage code came into being, or while it was in process, the government appointed a committee, called the Satpathy Committee. It went into great detail to decide and determine what should be the parameters for defining flow wage.

They came to a figure of an average of Rs 375 per day. That recommendation was not accepted by the government because according to them it was too high.

They set up another committee, and that committee recommended Rs 178 as the base. Rs 178, even a per day, is starvation wages much less than the BPL (below poverty line) that is fixed by the government.

What will happen is that state governments, which have fixed much higher minimum wage for example Karnataka, have fixed Rs 300 to 500 per day?

Q 4. Do the new codes apply to new industry sectors such as online marketplaces which include companies like Amazon, Flipkart, Zomato? How does it protect the rights of gig workers?

Singh: It’ll apply to all industries, which are defined under the code. Now the problem is that earlier under the ID (Industrial Disputes) act, the definition of industry was not very clear. But there were judgments from time to time, from the early 80s, still till recently where the Supreme Court basically broadened the definition of industry to include even industries which were like, for example, charitable institutions, hospitals, societies.

Certain criteria were set out and they were considered as an industry. What has happened is not only have the codes removed the industrial dispute act from which purview by removing the definition of industry employer, which is there under the Industrial Dispute Act, but it also undos the the benefits of judicial pronouncements, which had broadened that definition.

All those judgments also go into the dustbin. Here, the under the new code industry is not clearly defined. It says that only those industries will be considered, which is defined under the code.

In effect, all these platforms will also be considered, but unfortunately there is a separate section under the Social Security Code, which sets out a separate section for gig and platform workers. Now, the problem here is that gig and platform workers are not considered as workers, but as a separate category.

That is what we have always been saying, that they should be considered as workers. Once they’re considered as workers, all benefits which workers get will flow to them.
What that means is that for the social security benefits they will be eligible to those benefits only under that particular section.

Q 5. How is this tackling gender disparity in the workplace, especially in terms of wages?
Singh: As far as gender equality is concerned, there is no gender equality provided because under the old acts there was an act called, Equal Remuneration Act. It said that all workers, men and women were entitled to equal wages for equal work.

There’ve been a number of judgements on what equal wages mean and equal work, that also set aside. In the present code, the Equal Remuneration Act is done away with.

The problem is under the definition of wages, which in the earlier act wages was very broadly defined to include. Right now it includes only basic salary plus DA and retaining allowance whereas under the old Act, under the minimum Wages Act, under the various other acts, wages was defined as not only basic NDA, but it also included various allowances, such as house rent allowance, leave allowance, and various other allowances.

By excluding these allowances, what happens is that, when, when you compare the wages of a male worker and a female worker, then the basic wage of the man and the woman might be almost the same who’s doing similar type of work.

For example, a male clerk might get the same basic wage as a woman clerk, but, if allowance had been included, the man might be getting a higher allowance. On house rent he might be getting Rs 2,000 whereas a woman might be getting Rs 1,000 rupees similarly on any other benefits allowances that workers get.

There’s a clear disparity between what a woman is getting and a man is getting, and therefore that would be unequal.

But now that allowance has been taken out, that disparity is hidden, and is not accounted for. That is one major problem.

Women are actually not being protected in terms of their wages and equal conditions of work.

Q 6. Were the existing labour laws implemented in true letter and spirit? What challenges need to be ironed out in implementation of the new codes?

Singh: Definitely they were not implemented and the problem with the earlier acts was that though they had several beneficial provisions, the employers were being allowed to violate them and there were no proactive measures taken by the state to prosecute the employers.

The burden actually fell heavily upon the state in terms of not ensuring that the provisions of those acts were being implemented. But that does not mean only because the acts were not being implemented, one will do away with the acts and now bring in something more.

The question is, what is better? The existing provisions which benefit and protect the workers, or taking away the protections that existed earlier and doing away with all protection and then saying “now we are going to do away with all this because it was not being implemented, and now we will make sure that it is being implemented naturally”.

Q 7. What are the positive takeaways from the new codes that you have noticed?

Singh: There is nothing good about the Codes. It leaves the organised sector workers defenceless, taking away their right to strike, form unions, and most importantly their right to collective bargaining. The registration of a union can be arbitrarily cancelled at the mere whims of the Registrar.

Though it is claimed that for the first time gig and platform workers are included in the Codes, a careful reading of the Codes will show that they are not recognised as “workers”. The only right that they have is the right to “register”.

But at the end of the day, there are no statutory rights that they enjoy. They are completely dependent on the schemes the Centre or the State governments may frame. What should be contained in the schemes is not clearly provided, leaving it to the discretion of the Government to frame whatever schemes they think fit.

While on the one hand these codes are seen as a major reform for India’s economic growth, trade unions and other stakeholders have flagged the compliances related to hire and fire, retrenchment, fixed-term employment, and curtailment of the right to strike.