Labour codes to herald new wave of reforms in 2021; job creation likely to be major challenge

The implementation of four labour codes in one go from April 1 next year will usher in a new wave of reforms in industrial relations and also help in attracting more investments but employment generation will remain a key challenge in 2021.

This year has also been a challenging year for the workforce as well as for employers due to the outbreak of the Covid-19 pandemic. The government imposed a nationwide lockdown from March 25, which had an adverse impact on economic activities and resulted in the exodus of migrant workers from large cities to their homes in the hinterland.

Many migrant labourers lost their jobs and it took months for them to return back to their workplaces from their native places.

Bharatiya Mazdoor Sangh (BMS) Research Wing Head and former General Secretary Virjesh Upadhyay said that firstly, India will have to face a big challenge in terms of restoring jobs of a large number of workers who lost their livelihood due to the pandemic.

"Secondly, creating new jobs would not be a cakewalk because employment generation would be badly hit due to sluggish economy, automation and new concepts like Work From Home (WFH) evolved during the pandemic," he told PTI.

He is of the view that the government has done what it could have done in 2020 to provide relief to employees and employers. Now, the policymakers would also have to think about tweaking new labour codes set to be implemented in 2021 considering the new normal in view of the pandemic effect on the overall economy, he added.

According to him, the overall consumption in the economy would not improve unless people have jobs and merely boosting production would not alone help the economy to return to pre-Covid-19 levels.

However, during the pandemic, the central government was successful in getting Parliament's approval for three labour codes on Industrial Relations, Social Security and Occupational Health Safety & Working Conditions (OSH) this year.

The Code on Wages was approved by Parliament last year and its rules have been firmed up. But the implementation of the rules for Code on Wages was held back because the government wanted to implement all four labour codes in one go.

The government notified draft rules for the three codes for seeking stakeholders' feedback this year and the deadline for submitting the feedback will end in the first week of January.

The Ministry of Labour & Employment had also called a tripartite meeting for deliberations on the rules on the codes of wages and industrial relations on December 24. The next tripartite meeting is scheduled for January 12 to deliberate on codes on social security and OSH.

"We want to implement the four labour codes in one go from April 1, 2021. The deadlines for receiving feedback on codes on industrial relations, social security and OSH would be over by January," Labour Secretary Apurva Chandra told PTI.

With the implementation of these four codes, Chandra said the government wants to create a conducive environment for investors as well as to provide better social security to workers and protect their rights.

He also said that the main focus of the ministry would be to implement Aatmanirbhar Bharat Rojgar Yojana (ABRY) with an outlay of Rs 22,810 crore to boost fresh hiring and successful implementation of four labour codes in 2021.

The labour codes would not only provide social security to organised sector employees but also to informal sector workers like gig and platform workers. This means that the entire workforce of over 50 crore in the country would get social security coverage under the new legal framework from April onwards.

Gig and platform workers are those who are not on the rolls of an organisation and they are not entitled to get various social security benefits.

"I wish New Year 2021 will usher in a new era of development in the country and also ensure wage security, healthy and safe working conditions, social security and harmonious industrial relations consequent upon enactment of the new labour codes. It will be a year of hope, prosperity and growth for our 50 crore workforce as well as for our industry as both share a symbiotic relationship," Labour Minister Santosh Gangwar told PTI.

The minister also said that the Code on Wages, universalising the right of minimum wages to all 50 crore workforce was already enacted in 2019.

As a part of legislative reforms, codification of existing central labour laws into four labour codes is now a reality. These legislative reforms are in sync with the transformed work environment and seek to achieve the objective of securing the basic rights of the workers as well as catalysing employment generation by simplifying the complex compliance structure of present labour laws.

According to Gangwar, implementation of the labour codes will ensure ease of living for the workforce as it will universalise wage security, social security and safe working conditions to a large extent.

The minister also said the labour ministry has taken various initiatives like four all India surveys on migrant workers, domestic workers, employment generated by professionals and transport sector.

These surveys would help to create an online database of unorganised workers, including migrant workers, and collection of all statistical returns under the four labour codes by the Labour Bureau.

Director General of the Labour Bureau D S Negi said data collection work on the four surveys would begin by March and final reports would come out in October, which would help policymakers to design schemes, initiatives and interventions appropriately in sync with the need of the hour.

The lag in the data collection and its reporting has been an issue in the country as such a situation often misleads policymakers while taking calls on issues that need to be seen in the context of present times.

The government has also taken many initiatives to help workers affected adversely due to Covid-19. These steps include allowing withdrawal of non-refundable advance from employees' provident fund accounts, providing 50 per cent of three months' wages to insured persons who lost their jobs during the pandemic under ABVKY (Atal Bimit Vyakti Kalyan Yojana) and launching of ABRY to boost fresh hiring.

All said and done, how far the measures will help restore jobs and create fresh employment will have to be seen in 2021.