Government has little to show on labour reforms front

Huge expectations notwithstanding, the government seems to be faltering in the path of labour reforms.
Besides the introduction of fixed-term employment – first in the garment industry and then in all the sectors – it hasn’t made much headway. It is also unlikely that except the planned wages code, the other reform-oriented labour legislation will become a reality during the term of the current government.
Immediately after taking charge in May 2014, the Narendra Modi government embarked on the plan to amalgamate 44 central Acts on labour into four codes. This was touted to be a major labour reform initiative. However, the Centre could only introduce the wage code, which proposes universalisation of minimum wages, in the Lok Sabha, while the three other codes – on industrial relations, social security and safety and working conditions – are yet to be finalised.
RSS-affiliated Bharatiya Mazdoor Sangh (BMS) squarely blamed policymakers for neglecting the importance of tripartite mechanism needed to bring in large-scale labour reforms.
KR Shyam Sundar, a professor at XLRI, said the government’s efforts to introduce big-ticket reforms remained a non-starter due to complexities created in the codification process.
According to Teamlease Services co-founder and senior vice-president Rituparna Chakraborty, meaningful labour reforms, which encourage ease of doing business and attract new investments, would have helped the government to draw a sustained roadmap towards formal job creation.
BMS president Saji Narayanan said, “On many of the reform initiatives, neither employer organisations nor trade unions and the state governments are happy because those came from policymakers who have no idea about ground realities. The only way out to push forward the reform process will be through employer organisations and worker organisations sitting together and shaping their own destiny…”
Sundar, however, said “The NDA government has carried out minor and well-meant labour reforms, but their efforts to make big-ticket reforms remained a non-starter because of the complexities created in the codification process and absence of application of mind. As a result, the government is neither appreciated by the employers’ body nor the trade unions.”
Chakraborty said addition to formal jobs in the last one year was ushered in by a combination of fiscal boldness (note ban, GST implementation) and amnesty schemes (EPFO subsidy), rather than through impactful labour reforms. Sundar said the widening the scope of fixed-term employment was also a half-baked attempt. Lacking conformity with the international standards, fixed-term employment does not “spell out what should be the maximum and minimum period of one-cycle of fixed-term. There are many shortcomings.”
Chakraborty said the addition to formal jobs in the last one year was ushered in by a combination of fiscal boldness (demonetisation, GST implementation) and amnesty schemes (EPFO subsidy), rather than through impactful labour reforms. “While four labour codes have long been prepared – they are yet to see the light of the day and the amendments to the bonus Act and maternity benefit Act have continued to play to the protectionist card for formal job market insiders with little impact on those who remain in precarious informal work. This is a bold government; however, that spirit continues to elude the labour reform agenda,” she said.