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Industrial Relations Bill, 2020: A Critical Analysis

,In the thick of the Global pandemic situation, coupled with an unprecedented unemployment crisis, the Government is trying, by any means essential, to keep the economy afloat. With business shut down, manufacturing in turmoil, trade dwindling and old legislations ineffective in regulating the new-found discrepancies in the course of things, the Economy as a whole looked in a grim spot.

With the ongoing Worldwide chaos seem to stretch on perpetually, with no end in sight, Almost all areas of manufacturing, production and service are badly affected, while some worse than others. With the lockdown restrictions beginning got loosen in the past couple of months, and labours and workers engaged in Industrial Sector slowly and gradually returning to workplaces, after having hurriedly returned to their native places at the commencement of lockdown.

For the downside, the industrial sector, however, has turned into a highly unpredictive and scary terrain for the employers, who face the vulnerability of keeping their business going. Standing at the verge of negative growth, increasing costs of production and lower profitability at-par with economic instability, Factory and Industrial owners much needed an revival and assurance scheme which would help them get back to their feet.

To that effect only, the Parliament Enacted the Industrial Relations Code,Bill to consolidate the labour and employment regime in the Industrial Sector. Along with this, two other Labour, Health and Occupational Safety Codes have been given nod by three other Bills which seek to drastically reform the entire Labour and Occupational Sector.

After consolidating the laws relating to wage,pay and bonus by introducing the Code on Wages Bill in 2019, the Labour Ministry tabled a draft for Industrial Relations Bill and presented it in the House in September 2019, seeking to cover the remaining material aspects of the Labour and Industrial Sector.

The Industrial Relations Code, 2020 [1]

The Industrial Code Relations (IR) Bill has repealed and amended the following the following three acts:

  1. The Trade Union Act, 1926
  2. The Industrial Employment Act, 1946
  3. Industrial Disputes Act, 1947.
,
This bill is implication of complex sets of laws which were earlier at operation, this bill was the government last drove the final nail into Industrialist’s lacklustre agendas.The bill has adroitly expanded the definitions of “employer”, “inter -state migrants “, “ workers “, “ Industrial disputes “,” industries” ‘’Strike ‘’etc.

The Industrial disputes act, 1947 defines the term industries which includes and talk ‘ about any business trade or undertaking, the term “industries” under the act includes manufactures or any employers who have provided employment to the people, or any skilled worker who is using his skills to accumulate money or handicraft business will be coined as industries under the industrial disputes act, 1947.

Under the Industrial Dispute act 1947,co operative societies, clubs, khadi industries, educational institution, hospitals, charitable institutions were excluded from the definition. The new bill have also expanded the section 2 (zr) now in case of strikes the employer can send atleast 50 % work force on leave or can employee new workers.Gratuity has been made available to the worker who are serving under the contract for a fixed period of time its has been done by expanded the S.2(O)., the amended section will now also includes statutory benefits for fixed term workers equivalent to permanent workers.

Earlier the act dose not consider “contractor “ and legal representative of deceased employee “ to be employer but now under S.2(m) both contractors and legal representative will be considered as employers.t The present bill also makes mandatory for industrial establishment to comply with requirement of the standing order only if it has 300 or more workers, earlier their counting was of 100 workers. Under the act the strikers have to give notice of strikes within 60 days before the actual strikes.

The code bill introduced very important provision S.28 as under the section the present bill talks about the establishment of special industrial tribunal, the appointed members will be a judicial member and an administrative member, the tribunal will replace many adjudicating bodies like the court of inquiry, Board of Conciliation and Labour Court in India.

Perceived Upside
By far and wide, the Labour reform Bills passed by the Legislature have received a very welcome gestures from the Industry professionals. The bills have sought to simply the labour and employment regime in the country by consolidating almost 29 Labour codes under 4 broad heads. Speaking of simplification, the Occupational Safety and Health (OSH) Code is a major step in the direction of simplifying compliances and licenses which an entrepreneur needs to maintain in order to run their business. Earlier, OSH compliances contained 12 registrations and 4 licenses for and owner to posses, along with several Labour returns with authorities like ESIC, EPFO etc[2]. The OSH and Working Conditions Bill now bring these statutory registrations and licenses to only one.

The Code further aspires to to digitize the entire labour law compliance filing system, making the entire process smoother for entrepreneurs’ the other hand, the Code safeguards the safety and compensatory mechanism meant for the employees, whereby workers injured at the site of work would be entitled to receive half share of the penalty imposed upon the employer, in event of faulty work environment, along with the compensation awarded by the Court.

Additionally, the Code introduced a compensation system for employees who might face injury or accident while commuting to and from work, rather than at the site of work or on duty hours, which was not earlier available, stimulating a win-win situation.

The Labour Regime in the country had, by far, remained biased or favourable to one side, leaving the other in the lurch. Most of the times, it is the employee/labourer that face the hegemony of the employer. The bill has also sought to bridge the gender gap which persisted before. As found in national statistics, less than a quarter (23.6%)[3] of women aged 15 and above participated in the labour force, as compared to men (78%) in the same year of 2018.

Thus, this disparity would lead to women enjoying lesser opportunities, unfair treatment and pay – based discrimination for the same work which they do in comparison to their male counterparts. This rift in the gender has been majorly slacked by the OSH regulations in the way that the women will now be granted employment in all the sectors at-par with men, at unprecedented time slots – before 6 AM and beyond 7 PM, subject to their consent. Additionally, the Bill mandates the fair and just treatment of transgenders at workplace, statutory cap of 8-hour working limit on labourers, computation method of payment of bonus and other gratuities among a host of other benefits.

It would be a revolutionary step in the direction of providing on-the -job welfare to almost all natures of works, from agricultural labourers, gig workers, to migrant workers as well. Additionally, the Code on Social Security Bill,2020 will subsume the mass of 9 previous industrial security laws which covered all the renumeration schemes of the workers, hence affording better job and wage security to the labourers/workers in their course of employment.

Thus, The industrial code bill is designed to provide “gratuity “ and other statutory benefits to those employees who work on contact bases, employer infatuation with contract base employment started with the inception that they don’t have to provide any benefits to the worker as to the contrary if they hire a permanent employee.

Education, information technology, hotel management, logistics, are few sectors were there was a rising trend in contract - based employment, the only requirement to get these jobs is to perhaps is that one must commit chunk of your most precious commodity time and the worker is not even entitled to access basic benefits. This bill will ensure that if any body in any organization spending their precious commodity time to any organization they able to access the same amount of benefits as the other fellow employee is getting.

Perceived Downside
The Ministry of Labour and Employment have hailed these set of Codes as ‘revolutionary’, albeit in the midst of an oppositional backlash. The flip-side of these legislations too however, Is not unseen from the view of constructive criticism and inefficiency too. One of the foremost critiques of these labour and wage codes is that these laws follow the trajectory of a draconian and arbitrary set off measures which threaten to decimate freedom and fairness in the labour industry.

The Industrial relations Code,2020 for example seeks to consolidate and merge three of the most crucial laws related to trade unions, employment and dispute resolution in the industrial sector. The code would effectively restructure the functioning and impact of important institutions such as Trade Unions and worker welfare bodies by increasing the threshold on the maximum number of Unions maintainable by the workers at a workplace.

The Code recognizes only one single Trade Union comprising of the majority of the workers as members of the same Union. Further, the Bill also mandates the parties to serve a notice 14 days prior to going on a strike or lockout to the opposing party for a period of 60 days, thereby limiting the protesting capabilities of the workers. The new Labour policies appear quite synonymous with the decree passed by the Uttar Pradesh Government relating to suspension of all major labour and employment laws for a contagious period of 1000 days.

The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020, passed in May this year put almost all the major labour laws, except a few detrimental ones, in vogue, stating the ongoing coronavirus pandemic and a huge inflow of inter-state migrants back to the state post the lockdown as main reason.

This Ordinance was widely regarded as am authoritative and exploitative instrument that would severely injure the interests of the large population of migrant labour force which had returned to UP and would most likely seek employment in their home-state. Likewise, the Code threaten to undermine the worker – welfare regime by exposing them to exploitation by the hands of both the employers as well as respective state governments.

And most of all, The Industrial Relations Code,2020 has been condemned for it’s headlining modifications it brings to the industrial sector. The Bill permits employers employing 300 or more employees to hire or fire the same without the consent of the concerned state government. The threshold was earlier set at 100 employees, but it’s 3-fold surge now has caused serious concerns to the best interests of the fledgling party.

This threshold increase in the number of employees working in an industry from 100 to 300 would have serious implications as now larger chunks of small and even medium-scale factories/industries would be covered in this ambit. Not only would the raised threshold alteration discount government control from a major portion of industrialestablishments, but also give free-hand to the employers in matters of retrenchment, layoff and recruitment.

Bibliography,
  • The Code on Wages, 2019 (No.29 of 2019
  • The Industrial Relations Code,2020 (No. 35 of 2020) s.2(zr), 2(O), 2(m),28
  • The Code on Social Security,2020 (No. 36 of 2020)
  • The Occupational Saftey, Health and Working Conditions Code,2020 (No.37 of 2020)
  • The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020

Abbreviations Used,
  • IR – Industrial Relations
  • OSH – Occupational Safety and Health
  • ESIC – Employee’s State Insurance Corporation
  • EPFO – Employee’s Provident Fund Organization

,End-Notes:,
  1. Govt. of India, Ministry of Labour and Employment, (accessed on November 5,2020) https://labour.gov.in/sites/default/files/IR_Gazette_of_India.pdf
  2. Catalyst, Quick Take: Women in the Workforce – India, (OnlineAccessible at
    https://www.catalyst.org/research/women-in-the-workforce-india. (Accessed on November 6, 2020).

    Award Winning Article Is Written By: Mr.Akshit Gupta
    Awarded certificate of Excellence
    Authentication No: MA114060444332-20-0521

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