December 31, 2023

New Labour Codes Getting Ready for Enforcement

J S Majumdar

DURING the peak of the Covid-19 pandemic, when the toiling masses across the country were fully engaged in the struggle for their lives and livelihoods, the Modi-led BJP government seized the moment to advance significant initiatives in Independent India, including the corporatization of agricultural land and labour system reforms. In a week, from September 20 to 27, 2020, including a weekend, the government swiftly passed three farm bills and four labour codes through both houses of parliament. The bills received presidential assent on September 28, 2020, promptly becoming Acts.

However, the workers-farmers' resistance movement, jointly organized by 10 Central Trade Unions and SKM (Samyukt Kisan Morcha, comprising over 200 farmers' organisations), commenced with the historic nationwide general strike by workers on November 26, 2020, and the farmers' march to parliament. This movement included a farmers' indefinite blockade at all six entry points of New Delhi, widespread support from workers-farmers-people across the country, and, after a yearlong struggle, culminated in the prime minister's apology and the repeal of all three farm Acts. This marked a historic chapter in the workers-farmers-people's resistance movement.

Nevertheless, the commitment and active support of the BJP and Modi government to private corporates, particularly the influential big five – Ambanis, Adanis, Tatas, Birlas, and Mittals – should not be underestimated, as highlighted by none other than the former Deputy Governor of RBI, Viral Acharya, in his recently published paper.

While introduced concurrently, the withdrawal of the three farm acts contrasts with the ongoing implementation process of the four labour codes, awaiting the draft rules from state governments. The centre has already published its draft rules. Speculation arises that the enforcement of the labour codes might occur post the 2024 parliamentary elections.

While all other central trade unions are demanding for the withdrawal of all four labour codes, the RSS-affiliated BMS is advocating for amendments solely in the code on industrial relations.

The impending implementation of the four labour codes represents a comprehensive transformation of the entire labor system, undermining the legal rights of workers that were secured through years of struggles and sacrifices, both during the British regime and in Independent India. The introduction of these all-encompassing labour codes signifies a significant neoliberal economic shift.

In summary, the four labour codes, along with their draft rules, aim to: 1) increase working hours in factories, 2) exclude a significant number of factories from labour laws, 3)  introduce fixed-term employment, 4) lower wages, 5) impose hurdles in new union registrations and facilitate easy deregistration; and 6) create obstacles for strikes.

The code and its draft rules grant arbitrary power to the trade union registrar to grant or revoke trade unions' registration. The Factory Act within the code raises the threshold for the number of workers in a factory for the applicability of labour laws, potentially excluding about 75% of factories in the country from labour law coverage.

The groundwork laid by the labour codes also paves the way for a potential ban on strikes, deeming them illegal. Just before the introduction of the labour codes, the government enacted the Essential Defence Services Act (EDSA) in 2020 through the ordinance route. This not only prohibited strikes by civilian defence service employees but also, for the first time in Independent India, labelled strikes as a 'criminal act' with provisions for the imprisonment of participants and those advocating for strikes.

Moreover, the labour codes empower labour authorities to extend EDSA to any other industry/establishment, in addition to the Emergency Services Maintenance Act (ESMA).In the industrial relation code, the stringent conditions for strikes are outlined, requiring a 60-day advance notice, forbidding strikes if the dispute is admitted for conciliation, and imposing a 60-day prohibition on strikes after conciliation, among other restrictions.

The labour codes grant authority to the centre and the states to formulate rules within their respective jurisdictions, enabling the extension of work shifts to up to 12 hours (without increasing the standard 8-hour workday). This provision is inherently contradictory and opens the door for employers to potentially exploit a vast number of unorganised and non-unionised workers.

The labour codes have also introduced 'fixed-term employment,' gradually phasing out permanent workers and rendering retirement age and post-retirement social security irrelevant. Additionally, provisions enable the replacement of permanent workers by contract workers and contract workers by apprentices performing the same duties but at lower wages termed as 'stipend.' The concept of 'Agnipath' serves as an example of fixed-term employment. Exploiting the backdrop of significant unemployment, 'fixed-term employment' stands as a favourable measure for corporates under the Modi government.

Furthermore, the introduction of the 'floor level wage' through the labour codes, intended originally for agricultural workers by the agricultural commission, has now been extended to industrial workers. Notably, the 'floor level wage' is considerably lower than the 'minimum wage.'

It is noteworthy that Shahid Bhagat Singh sacrificed his life in opposition to the British government's attempt to declare strikes 'illegal' through the Trade Disputes Act of 1928. The labour codes eliminated all 11 industry-specific laws. Nevertheless, independent and united movements led by workers and farmers' organisations persist, advocating for the repeal of these four labour codes.


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