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The centre in past few years is sparing no effort in pushing forward some key reforms in the field of Law Labour. The labour law reform as per the plans of current central government includes merger of 44 existing central laws into four codes. In the last concluded session of Parliament the code on wages bill was passed by the Rajya Sabha and following the assent of president will soon become an act. The second reform in this regard which appears to be highly likely is the labour law code on Industrial relations which will replace three laws governing the relationship between the employer and employees viz. The Trade unions Act, 1926. Industrial employment act, 1946 and The Industrial dispute Act of 1947. In this project I will be dealing with how the proposed changes will have an impact on the aspects of Industrial relations such as membership and composition of trade unions, the concept of hire and fire and the idea of strikes as compared to thepre-existing laws at place.
Important provisions of the draft bill and Proposed major changes under draft bill
The proposed Draft code which will replace the three acts in its present form consists of 107 sections spread over 13 chapters and 3 schedules which will deal with various issues of industrial relations such as registration of trade unions, standing orders, strikes, lockouts, notice of change of term of employment, layoffs, retrenchment amongst others.The draft bill has proposed some major changes to the current law. Some of the significant changes which will have deep impact on the industrial establishments has been discussed by me below. The changes can be classified under six heads.
The proposed draft bill has made changes to certain important words.
It largely borrows the definition of Industrial dispute from the pre-existingact[i] by making an addition and broadening the scope of the provision. The draft code has added that “in the cases of termination of any individual worker by the employer by way of dismissal, discharge and retrenchment will fall under the ambit of industrial dispute”.
The draft also expands the definition of employer in order to include any occupier of the factory under it[ii]. It also amends the definition as it is currently under Industrial Employment (Standing Orders) Act, 1946 by effectively making any Person or any authority which has ultimate control over day to day affairs of any establishment, “making such owner also to be liable as an employer under the bill.[iii] The definition of industry as changed in the year 1982 has also been finally incorporated under the bill.[iv]
The new draft code has also widened the definition of industry on the lines of the definition given in the Bangalore water supply case, however it goes against the opinion of the Supreme Court in the case of Coir Board Ernakulum and Jaibir Singh. But the aim of the legislature here is to make the umbrella to protect the workers a larger one.
By making Changes to the definition of wages the draft code has broaden the scope of persons to whom the wages are being paid. While the current industrial dispute act clearly specifies that wages are payable to workman only, the draft code while widening the scope says that wages are to be paid to any person employed under any employment or work done in such employment.
The word workman has also been changed into more gender neutral form that is “worker”, which is in accordance with the second national commission of labour[v], one more amendment the definition of employee brings in is that it excludes the apprentices from the scope of employee. Previously, apprentices were additionally enclosed within the scope of working person within the Industrial Disputes Act, 1947. (IDA) whereas the definition of workman [vi] As per ILO “workman” doesn’t embody those who utilized in a very superior capability, draw wages of 10 thousand rupees per month, the Draft Code removes the required quantity to wages as notified by the central government from time to time.
2. DISPUTES resolution
The court of enquiry[vii], the board of enquiry [viii] and the labour court [ix] has been done away with under the new draft code. This can be seen as a good move as multiplicity of judicial forums and the time period it took to solve any dispute appears to be very problematic for the aggrieved parties. By going away with the labour courts, the focus is now totally on the industrial tribunals.
As of Now The adjudication of disputes can start, barring exceptional cases, only after reference by the Appropriate Government under the ID act. The current scheme vests extraordinary power in hands of the political executive and this has hampered the autonomy of trade unions. However now under the proposed bill, the aggrieved person can file a suit directly before the tribunals.
Another area of focus under the new draft bill is Arbitration. This has been given a separate chapter altogether, pointing towards greater importance given to arbitration as a mode of dispute resolution. Empowering the parties to refer the disputes to arbitration at any time is a very important change[x]; as per the current law the route of arbitration can be taken only before approaching any labour court/tribunal [xi].
3. Strikes and lockouts
Except for one addition, the definition of strike is similar to that of the one as contained in the Industrial dispute act [xii]. As per the draft provision casual leave by more than 50% workers on any particular day will also amount to strike [xiii].
By imposing uniform restriction the draft bill seeks to eliminate any kind distinction between the public utility services & other industries.[xiv] It makes uniform for all kinds of industries to make submission of prior notice for lock outs and strike mandatory.
This can be seen as a positive step as such universalisation will help the concerned parties to get ready and prepare for such strikes and would reduce the impact of any kind of disruption caused by such coercive actions. The Committee on Freedom of Association OF ILO and the second National Commission on Labour advocated the requirement of prior notice.
4. Layoff retrenchment and closure
As per the draft code a prior governmental approval is required for any lay off, retrenchment and closure for all the establishments covered under it. However any company with workforce of less than 300 can take such decisions without the permission of the government. This is in change with the current limit of 100 employees.
5. Trade unions
The draft code appears to make a major changes in the area of Trade unions. It makes mandatory that at least 10% of the members of the Industrial establishment must be the members of the trade unions in order to get registered. Earlier 7 or more members were sufficient for the registration. It however makes compulsory that 10% or 100 members, whichever is less will be the applicants. It also makes compulsory that the all the office bearers of a trade union should be the persons actually engaged or employed in establishment which the trade union is concerned with The new draft code also prohibits person holding office in more than ten trade unions and the registration of any trade union may be cancelled if it fails to hold bi annual elections along with submissions of annual returns. [xv]In order to encourage workers to join trade unions a provision where all the workers who is not part of any trade union has to pay a subscription to a workers welfare fund established by either the employers or the government. [xvi]
6. Standing orders
The draft bill proposes an aim of reducing executive discretion to notify standing orders along with allowing greater transparency and predictability can be seen as noteworthy change as the provisions of this code cannot be made applicable to industrial establishment which has less than 100 workers as they can do now. The code however makes sure that in cases of such an establishment has already been notified, then it will continue to stay in force.
Further section 35 of the code lists out matters to be covered by Model standing orders which is drafted by the central government allowing the scope of unspecified matters under its ambit. It is a good step as the draft code envisages a more expansive list of specified matters than before and is commendable as it spells out certain acts which are decided while considered to be acts of misconduct.
The complaint by the Trade Unions are manifold. The primary concern of the trade unions is that by merging the four codes into one the government is acting to benefit the employers and hampering the interest of the employees.
However on the other hand the aim of the government appears to make laws more uniform and straight forward. It can be said that fewer laws will mean better monitoring as well as smooth compliance of laws which in turn will benefit the stakeholders i.e. both the employers as well as the employees. The major idea behind all these reforms is to make India an attractive hub for foreign investment and to increase the manufacturing capacity of our nation which is directly related to the idea of make in India. A simpler law will mean attractive work and investment environment and hence more industries. The only of the four labour codes which has got the support of some trade unions is the “wage code” which is already been passed by the parliament. The other codes are being vehemently opposed by the trade unions including Bhartiya Mazdoor Sangh which is associated with the ruling party.
It is highly likely that the new code will be soon sent to the Parliament by the government. However it is very important to keep the trade unions and workers in confidence before moving forward with any big step because ultimately they are the ones who have worked extensively in building our nation up to now and they should be the ones who should be treated fairly.
[i] Section 2(k), THE INDUSTRIAL DISPUTES ACT, 1947
[ii] Section 2(n),Factories Act, 1947
[iii] Section 2(1)(f), The Labour Code on Industrial Relations Bill, 2015
[iv] Section 2[l], The Labour Code on Industrial Relations Bill, 2015
[v] Section 2(1)(zf) The Labour Code on Industrial Relations Bill, 2015
[vi] Section 2 (s) of Industrial Disputes Act, 1947.
[vii]Section 5, Industrial Disputes Act, 1947.
[viii]Section 7, Industrial Disputes Act, 1947.
[ix]Section 6, Industrial Disputes Act, 1947.
[x] Section 50, The Labour Code on Industrial Relations Bill, 2015
[xi] Section 10(A), Industrial Disputes Act, 1947
[xii] Section 2 (q), Industrial Disputes Act, 1947
[xiii] Section 2 (1) (za), The Labour Code on Industrial Relations Bill, 2015
[xiv] Section 71(1), The Labour Code on Industrial Relations Bill, 2015
[xv] Section 25, The Labour Code on Industrial Relations Bill, 2015
[xvi] Section 9, The Labour Code on Industrial Relations Bill, 2015
ABOUT THE AUTHOR
Raja Reeshav Roy is a 4th Year law student at National Law University Jodhpur.
In content picture credit: Al Bawaba