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Make ‘Poor’ In India, Is That What The Amended Labour Law Is Aiming For?

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By Richa Priyanka

It came as no surprise that when reformed Labour Laws were proposed by the Ministry of Labour and Employment under the NDA led government, they were directed more towards the empowerment and autonomy of industrialists (most of who backed the party during elections), than for the protection of workers and labourers employed in the country.

indian labour
Photo Credit: Erik Parker

Whatever is happening now is part of a plan to erode the protection of the workers. It is a very deliberate strategy as the PM has promised foreign industrialists and big corporations in India that they should “Make In India” because that’ll offer them high-quality-low-cost labour. The only way to ensure low cost labour is to overwork and underpay them and ensure that they cannot unionize, that they cannot organize to protest,” says Kavita Krishnan, a political bureau member of CPI ML and the secretary of All India Progressive Women’s Association (AIPWA).

The new code received severe opposition by various trade unions all over the country like Rashtriya Swayamsewak Sangh’s Bhartiya Mazdoor Sangh, who also complained that they weren’t even consulted once during the formation of the Wages Bill. Further, parties such as AAP and Communist Party of India, led by the Trinamool Congress, have gone so far as to term the bill “anti-labour” and believe that the reform would demean the already poor status of workers in India.

Randomization Of Minimum Wages

In the absence of the National Floor Level Minimum Wage, as was set previously under the Minimum Wages Act 1948, the minimum wage set in different states will be arbitrary. Because of this, the states where the working class movements are weaker will be able to reduce the minimum wage to even below the minimum threshold. This is a severe problem in India, as there are a vast majority of workers available in the country who will be ready to work on extremely low rates because of the grasp of consuming poverty, and a lack of power to protest.

Laying-off Of Staff

The government claims that they will be able to create more jobs by laying off more workers, but, that is an absurd logic. “Hire and fire means that you will continuously be able to create disposable workers, you’ll dispose of one worker and create another worker. And you would claim to have given a job to both the workers, but, what you are doing actually is that you are rendering both of them insecure,” says Kavita.

Facilitators To Inspect Functioning

Instead of inspectors, or as the ministry had termed earlier as “social security officers”, facilitators will supply information and advice to employers and workers concerning the most effective means of complying with the provisions of the code. “The objective is to project a friendlier image to employers. The facilitators’ functions and powers are also proposed to be in keeping with this image,” said a person close to the development of the new code.

Difficulties For Trade Unions

It is going to be more difficult to form new trade unions as the new code suggests that a trade union shall have no more than two outside members while all the others should be company employees. Further, it does away with Section 23(2) of the Payment of Bonus Act 1965 which permits the trade unions to legally access audited accounts and balance sheets of employers. Rendering all the rights in the hands of the employers will threaten the security of the employees in India.

While most of these rectifications seem to be targeting the security of workers, some are required to make the law hassle-free for the industrialists. “India has long been criticized for its strict labour laws and burdensome business regulatory environment,” says the World Bank. Being the country with the largest population of under-utilized labour forces in the world, the stringent rules make it difficult for employers and industrialists to expand their businesses in a labour intensive fashion, while the industries keep growing in a capital intensive manner.

The reformed code is quite insufficient to strengthen Indian business standards, and might end up worsening the state of labour in the country.

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  1. AKHIL

    Look I’m not supporting the new labour law at same time i would like see a change in the existing laws, as I’m from a Business & Economics background by education and have learned labour laws in both U.G & P.G, there are certain things that we debate about our country’s labours and their laws. But do you thing the above said things are the only problems that we face? Well the answer is a BIG NO! and do you thing what CPI & CIP(M) is saying is correct? well no because they support socialism. Which means the companies have to pay their employees even if they are earning losses. How come that is possible? An MNC can pay well, but do you thing a small and medium scale company can pay like them, NO! The same is the case with other parties same old stupid reasons, but that is not the problem. We need a labour law where employee has his rights & protection for his job, but not harming the employer too. Which is not possible in India because, unlike other countries we have a 200 parties at state level and about 20 at national level, some follows socialism where as some follow Mixed or support capitalism. In one sentence, any govt in India cannot bring a labour law that is needed for our country as different parties follows different policies making it difficult to bring the change.! At the end of the Day we the citizens of the nation suffer!

  2. bishal manna

    Now let me argue with you . According to the Industrial Dispute Act 1947 , as soon you employ more than 100 workers you cannot fire a redundant worker without the government permission which is sans given . Now seeing your post I can make out that you want employment for our labour , but if a factory is not able to fire and hires its worker with ease it will either shut down or relocate to another country . Sorry government cannot control the market .

    Now what we are doing while proposing such laws is that we are force the firms to hire workers through contractors . Now contracted worker can still be easily be fired and are paid lesser salary . Moreover the firm doesn’t care for their training to make them more productive .Infact 93% of the workers are in unorganized sector , which are due to these laws . Now who are we helping with these laws , the firms are troubled and the workers are paid lesser . If we relax atleast the Industrial Dispute Act 1947 , it will be much better and nobody is forcing the labour to stick with a firm if they can get better wages in another firm naturally they will leave their previous firm . Its called the free market principle . And there will ofcourse be goons who force the labour to work at low wages , they need to be jailed or preferably hanged but opposing the labour laws reform is no way to do things.

    Now some stupid people propose that since most workers work in unorganized sector what is the need of labour law reforms . I laugh at such stupidity . Did you know that our country India is experiencing an enigma of growth , the gdp growth is high but the jobs are not increasing so well . Its called the jobless growth which means only salaries of highly qualified people have increased while rest did not experiencing anything .
    Now you can’t propose that the poor go to universities to get a degree they can’t even complete their primary education . To quote the world bank in its 2008 report –
    ” India’s labour regulations – among the most restrictive and complex in the world – have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labour regulations can attract more labour- intensive investment and create jobs for India’s unemployed millions and those trapped in poor quality jobs. Given the country’s momentum of growth, the window of opportunity must not be lost for improving the job prospects for the 80 million new entrants who are expected to join the work force over the next decade.”
    source –
    Since the inception of this country our politicians were never the go getters they always let time to get this country .Are we waiting for a time when our population will become too old to give impetus to growth . Then we will reform our labour laws. Even China which had been built on communist ideologies has much more pragmatic labour laws . Opposing labour laws reforms means obstructing growth to only middle and upper middle class .
    I sincerely hope later generation don’t curse us for our action like we curse our previous generations .

  3. bishal manna

    Why is my comment not showing

  4. Raj Sachdeva

    Admirable post and the way which you used to explain the topic is extremely nice.
    Raj Sachdeval

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