All four draft codes being readied by the labour ministry with a view to reforming the country’s archaic labour regulations will be presented before the Cabinet latest by February, so that these can be tabled in Parliament in the Budget session, official sources told FE.
Two of these codes – one on wages and the other on industrial relations— will likely be approved by the Cabinet in the next couple of months, the sources added.
The labour ministry has recently informed the Prime Minister’s Office about the schedule of carrying out reforms aimed at improving ease of doing business and boosting employment, while also ensuring decent working conditions.
While the draft code on wages empowers the states to fix minimum wages and makes national minimum wages mandatory, the draft code on industrial relations proposes allowing establishments employing up to 300 workers (compared with up to 100 now) to lay them off without government approval.
The second code would also make it tougher to form trade unions and prohibit politicians from becoming union leaders in organised sector establishments.
The labour law overhaul by merging 44 extant laws into four codes is in sync with the Modi government’s objective of making India a global manufacturing hub, sources said.
These are also aimed at improving safety, security and welfare of workers, the sources added.
The codes on wages and industrial relations have already been sent by the labour ministry to the legislative department for vetting, along with the Cabinet note.
Outlining the reform proposals and preparedness so far, the Bandaru Dattatreya-led labour ministry has in
a recent presentation to the Prime Minister’s Office stated that the two other codes being drafted –- on social security and welfare and safety and working conditions – would also be sent for Cabinet approval latest by February next year.
The reform proposals have drawn criticism from trade unions. They called for a nation-wide strike on September 2 protesting against the “unilateral” initiatives of the government which they alleged would send 70% of the workforce out of the ambit of labour laws.
The labour ministry has also sent the final cabinet note on the Payment of Bonus Act which proposes to raise the salary threshold for mandatory bonus for workers from Rs 10,000 a month at present to Rs 21,000 and the minimum bounty from an annual Rs 3,500 now to Rs 7,000.
A source in the labour ministry said the Prime Minister’s Office has instructed the labour ministry to carry ahead with the proposals and the momentum should not get lost.