Labour Code Bill ignores Parliament committee report

Poornima Joshi New Delhi | Updated on July 23, 2019

The Code on Wages Bill entertains practically none of the suggestions of a Parliamentary Standing Committee and the Code on Security awaits oversight

The collective suggestions of various stakeholders and a Parliamentary Standing Committee, have been ignored in the proposed Labour Code on Wages Bill and the Code on Occupational Safety, Health and Working Conditions Bill introduced in the Lok Sabha on Tuesday.

Also read: Govt moves 2 Bills in Lok Sabha to overhaul existing labour laws

Sources said the government may concede to the Opposition’s demand to send the Bill on Code on Occupational Safety, that merges 13 central labour laws into a single code which would apply to all establishments employing 10 or more workers, to a parliamentary standing committee, as it has not yet been examined by one. However, the Code on Wages Bill has already been examined by a Parliamentary Standing Committee, and given the government’s majority in the Lok Sabha and its floor managers’ much-enhanced persuasive skills in the Rajya Sabha, it is likely to be passed, especially since the ongoing Parliament Session is expected to be extended by 10 days.

Fixing wages

While the RSS-backed Bharatiya Mazdoor Sangh (BMS) hailed the introduction of Code on Wages Bill describing it as a right step in streamlining and increasing minimum wage, the General Secretary of the Centre of Indian Trade Unions (CITU) Tapan Sen said it de-links the process of fixing the minimum wage from a scientific calorie-based formula and allows the Centre to ‘arbitrarily’ fix the wage.

“The government has arbitrarily set aside the minimum wage arrived at after prolonged deliberations in the Indian Labour Conference (ILC), which is a tripartite forum of the Centre, State governments and the unions. On July 10, the Government announced the minimum wage to be ₹178 per day, which is less than the wage being currently distributed in as many as 31 different locations across the country,” Sen said.

Pawan Kumar of the BMS said the most positive part of the Code on Wages Bill is that it streamlines the minimum wage and leaves no scope for the employers to pay less than the amount fixed by the Centre. “A Parliamentary Standing Committee has examined the Wage Code Bill. With regard to the Code on Occupational Safety, we will have to examine how many of our suggestions have been incorporated by the Government.”

The Code on Wages Bill was introduced in the last Lok Sabha on August 10, 2017, and was examined by a Parliamentary Standing Committee. However, the Bill lapsed because it could not be passed during the duration of the 16th Lok Sabha, that has since been dissolved. The government re-introduced the Wages Bill on Monday, and even a cursory clause-wise examination shows that the report of the Standing Committee which followed wide consultations with trade unions, State governments and industry representatives, has been more or less ignored.

In the proposed Wage Bill, the Standing Committee had suggested that offences and penalties by the employers be raised from ₹50,000 to ₹10 lakh in Chapter VIII. However, in the proposed Bill, the government has retained the penalty ₹50,000. Further, in the definition of the ‘appropriate authority’ without whose complaint no court can take cognisance of any offence under the proposed legislation, the government ignored suggestions of the Standing Committee with regard to strengthening this enforcement mechanism.

Terminology used

“… The Committee have felt that the use of the term ‘Facilitator’ instead of ‘Inspector’ in the Code gives the impression of diluting the mechanism and restricting the inspection which is the lifeline of enforcement… It is therefore recommended that under Clause 2 Sub Section (m) and Clause 51, the word ‘Facilitator’ be substituted by ‘Inspector’ in accordance with ILO norms,” said the Standing Committee report.

However, in both Clause 51 as also in Clause 2 Sub Section (r) which defines ‘appropriate Government’ in the proposed legislation, the term used is ‘Inspector-cum-facilitator’.

Another significant suggestion was with regard to definition of “worker” and “employee” on which there were disagreements between the industry bodies and the unions. While the unions were almost unanimously of the view that ‘employee’ is a much widely used term and allows a larger number of persons to access statutory benefits whereas industry bodies such as the PHD Chamber of Commerce and Industry were of the view that the definition should specifically exclude people engaged in managerial, administrative and supervisory nature of jobs. The Standing Committee felt that the Code lacked consistency in its use of both ‘worker’ and ‘employee’ terms and underlined that since minimum wage is a matter of right for every working person, a common and comprehensive definition of the employee/worker needs to be given in the Code.

“The Committee feels that the Code lacks consistency in the use of both terms at various clauses which may lead to confusion. They apprehend that the confusion may lead to employers misinterpreting these terms and perhaps also discriminate between the workers and employees,” it said.

However, in the Bill introduced on Tuesday, in Clause 2 Sub Sections (k) and (z) the definitions of both ‘worker’ and ‘employee’ have been retained, which the trade unions defined as a ‘hidden motive’ to leave an open avenue for the employers to misinterpret and also to discriminate between the workers and employees.

Published on July 23, 2019

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