The unilateral power to fix terms and conditions of employment by employers will impact wage bargaining, says K.R. Shyam Sundar, labour economist and professor, XLRI-Xavier School of Management
The recent labour reforms will help in job creation, but they will not be decent jobs, instead the wage premium will be a victim, says K.R. Shyam Sundar, a labour economist and professor at XLRI-Xavier School of Management. In an interview, Sundar said while labour reforms will attract investments and aid industrial growth, it should not be seen as a panacea for all problems. He argued that the new reforms have given employers the unilateral power to determine terms and conditions of service, and this will hamper wage growth. Poor income growth hampers poverty alleviation, he said. However, Sundar lauded the expansion of social security and universalization of formal employment contract among regular wage earners. Edited excerpts:
The labour codes have made provision for universalization of formal employment contract. What will this change?
It now requires employer to offer a formal written employment contract or appointment letter detailing the terms of contract. It will have three benefits: employment identity, assertion by workers of rights under the law, and provide clarity on the terms and condition of employment. It also reflects legislative poverty of the last 70 years, wherein a very basic requirement was not provided for. The NDA (National Democratic Alliance) government has made provision for it now, at least for regular wage workers. That way, it’s historic. In 2012-13, a little over 50% did not have formal written employment contract, and the 2017-18 official data shows, 71.1% of the regular-wage, salaried workers in the non-agriculture wage space, did not have written formal employment contracts.
Source: livemint
