THE FOUR TRANSFORMATIONAL LABOUR CODES 2020, PASSED IN THIS MONSOON SESSION OF PARLIAMENT
PART-1-What existed for decades and the transformation brought in from 2014 to 2020 till the passing of the 4 consolidated Central Labour Codes
1.1.Though India was FORCED to dump the economy cocooned in the time expired Socialistic Dogma mixed up with Democracy in July 1991, for close to three decades (29 years to be exact), no Central Government was willing to reform our archaic Labour Laws because of the “perceived backlash” from the Unions in the Organised Sector!
1.2.The Subject of LABOUR falls in the CONCURRENT LIST (List-III of the Seventh Schedule to our Constitution).
1.2.1.This means that both the Centre and the States can make Laws on matters covered in the List—III—The Concurrent List
1.3.The Seventh Schedule is derived from Article 246 of our Constitution.
1.3.1.According to this Article, the Central Enactment shall prevail in the case of conflict or repugnancy between a Central and a State Law on the same Subject.
1.4.Again, some Subjects on Labour are reserved for the jurisdiction of Centre alone in List-I, the Union List in the Seventh Schedule.
1.4.1.Entry No.55. Regulation of labour and safety in mines and oilfields.—LIST I—UNION LIST, is one such example for this.
1.4.2.Entry No.61. Industrial disputes concerning Union employees.—LIST—I—UNION LIST, is another example.
1.5.Again, there are restrictions subject to which only the States can enact Laws on some subjects—see Table below:–
Entry No.7 Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.—LIST—I—UNION LIST
Entry No.52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.—LIST—I—UNION LIST
Entry No.24. Industries subject to the provisions of [entries 7 and 52] of List I—LIST—II—STATE LIST
1.6.The net result of this complex, overlapping maze of the Constitutional Provisions is that we have 44 Central Labour Enactments and over 150 State Enactments on LABOUR alone, with abundance of contradictions even between the Central Laws, let alone the State Laws!
1.7.Litigation up to the Supreme Court level proliferated beyond counting.
1.8.Even the SC Judgment in the 2019 judgement in the case of RPFC vs Vivekananda Vidyamandir and others & Surya Roshni Ltd & Ors vs The State of Madhya Pradesh EPFRPFC and Ors—2019 LLR 339 (SC) where, the Hon’ble Supreme Court have held that allowances other than those mentioned in the Judgment are to be considered as part of the basic wages u/s 2(b) of the Emp Provident Fund & Misc provisions Act,1952,for the purpose of determination of PF Contribution DOES NOT SEEM TO HAVE SETTLED THE PF LAW ON THIS EVEN AFTER 67 YEARS OF EXISTENCE OF THE ACT!
1.9.THE NET OUTCOMES OF THIS COMPLEX LABOUR LAW REGIME WERE THESE:–
1.9.1.No freedom to hire contract labour according to spike in production;
1.9.2.No freedom to retrench excess labour;
1.9.3.No freedom to even close down an undertaking without the permission of the “Appropriate Government” (the State Govt, which will never be given!).
1.9.4.The absence of a central law providing for a mechanism to determine the collective bargaining agent.
1.9.5.Our Trade Unions Act, 1926, is a colonial legacy!
1.9.6.Illegal strikes stifled economic growth and made our industry uncompetitive in the global market.
1.9.7.On the flip side, the unscrupulous employers got away with any violation through bribes.
1.9.8.Even the Central and State PSUs complied with the Contract Labour (Regulation & Abolition) Act (CLRA), 1970, ONLY IN ITS WHOLESALE VIOLATION!
1.9.9.Go to any big Central PSU and you will be surprised to find that they have stopped recruiting workmen directly even FOR THEIR CORE ACTIVITIES, employing Labour Contractors instead!
1.9.10.Of course they do ensure that the Contractors do comply with all the social security laws like the PF & ESI but the CLRA prohibits engaging contract labour for core activities of the Establishment!
1.9.11.Compliance with all these Labour laws became just impossible even for the large companies; the SMEs had to bear the brunt of the INSPECTOR RAJ until the PM MODI Govt stopped this anarchy.
1.9.12.For any foreigner, the labour Law Regime was nightmarish and many were unwilling to set shop in India due to this; consequently, we could not achieve the “Ease of Doing Business” ranking of 50 before the Covid-19 pandemic struck.
1.9.13.Not that the advanced democratic economies of say, Europe do not protect their workmen; Germany has one of the toughest pro-labour regime in the world but the difference is that the regime is predictable, corruption free and implemented in a fair but strict manner!
2.THE VAJPAYEE GOVT WAS THE ONLY ONE PRIOR TO 2014 TO INITIATE LABOUR LAW REFORMS
2.1. The (only) Second National Labour Law Commission was appointed by PM Atal Ji.
2.2. But the BJP, with just 182 seats in the LS did not have the majority on its own in 1999-2004 to act on the recommendations of the NLLC and carry out the changes in the laws.
3.PM MODI INAUGURATES THE TRANSFORMATIONAL ERA IN LABOUR LAW REFORMS FROM 2014
3.1.One of the first things he did was to ensure that no Central labour Inspector would enter your Establishment.
3.2.The Digital Revolution that he introduced in the administration of the PF and ESI Laws made the functioning of the Employees’ Provident Fund Organisation (EPFO) and the Employees’ State Insurance Corp. (ESIC) more transparent and people-friendly.
3.3. Universal Account Number (UAN)
3.3.1.UAN is probably the most significant of all the changes brought about by the EPFO.
3.3.2.As the name suggests, it is a unique identification number for a PF member irrespective of change in employer or employment location.
3.3.3.This facilitates seamless transfer of balance / linking of accounts on change of employment, mapping with new employer, preferring claims for advances or withdrawal upon retirement etc.
3.3.4.The UAN also acts as the user id for the member to login to the PF portal and access various services such as verifying the account balance etc. Introduction of UAN has done away with the requirement for a fresh registration on change of jobs and along with it the related time lags in contributions.
3.3.5.It has also ensured that a member has access to all accounts (should he have more than one) under the same UAN
3.4. SMS to track monthly remittances
3.4.1.Today, members can check if their employers have remitted the contributions deducted from their pay together with their share.
3.4.2.This is possible by enabling the SMS option to the mobile number linked to their UAN.
3.4.3.Through this, one can be assured of timely compliances by the employer and have the visibility to their PF account.
3.4.4. Earlier, one had to wait to receive the PF slips which would be issued after the interest was credited at the end of the relevant financial year, and which would be issued about a year after the end of the financial year to know the status of their respective PF accounts.
3.5.1.The next in the series of developments / digitisation is the facility to download one’s PF passbook.
3.5.2. Using UAN, a member can check and download the passbooks to their account/(s) at any time of the year and know their balances including interest earned.
3.5.3.This can be retained for record purposes and also help in prompt course correction should the member notice any discrepancy.
3.5.4.Needless to say that this process can also be done electronically.
3.6.Online facilities provided by EPFO
3.6.1.Most of the employee interface can be handled through the online process.
3.6.2.This includes transferring of balances necessitated due to change in employment, withdrawal or requests for advances, updating the KYC details, seeding the UAN with Aadhar, PAN, bank account details etc.
3.6.3.The UMANG app of the PF department is also highly popular and provides easy access to all of the EPFO’s online facilities.
3.7.THE SHRAM SUVIDHA PORTAL LAUNCHED ON 16.10.2014 IMPROVES EASE OF DOING BUSINESS
3.7.1. Shram Suvidha Portal: In order to bring transparency and accountability in enforcement of labour laws and ease the complexity of compliance, Ministry of Labour & Employment has launched a unified Web Portal ‘Shram Suvidha Portal’ on 16.10.2014, catering to four major Organisations under the Ministry of Labour, namely –
3.7.1. Office of Chief Labour Commissioner (Central),
3.7.2. Directorate General of Mines Safety,
3.7.3.Employees’ Provident Fund Organization; and
3.7.4. Employees’ State Insurance Corporation.
3.8.The Portal provides for allotment of a Unique Labour Identification Number (LIN) to establishments, filing of self-certified and simplified Single Online Common Annual Return by the establishments and also a transparent Labour Inspection Scheme through computerized system based on risk based criteria and uploading the inspection reports within 72 hours by the Labour inspectors.
3.9.Launching of the Shram Suvidha Portal has facilitated in bringing transparency and accountability leading to better enforcement of the Labour Laws. Transparent Labour Inspection Scheme has reduced the discretionary powers of the Inspectors and brought transparency in the inspection system thus minimizing the harassment of employers.
3.10. The facility of online registration for allotment of Unique Labour Identification Number (LIN) and the Transparent Labour Inspection Scheme was started on the Portal with its launch on 16.10.2014 itself.
3.11. Filing of Single Unified Annual Return for 8 Labour Acts (10 Central Rules) was launched on 24.04.2015.
3.11.1.It has facilitated in easing the compliance burden of the employers. Returns under the Contract Labour (Regulation and Abolition) Act, 1970, Inter-State Migrant Workmen (Regulation of Employment and conditions of Service) Act, 1979; and Industrial Disputes Act, 1947, which were half yearly / annually earlier, now need to be filed by all employers annually only.
3.11.2. This effort is an evidence of use of technology in order to enhance transparency and minimise harassment contributing to ease of doing business.
3.11.3.Online Common Annual Return filing under the Mines Act 1952 has also been facilitated on the Portal since 09.03.2016.
3.11.4.Common monthly return for EPFO & ESIC has also been facilitated on the Portal.
3.11.5.The Portal is multilingual, catering to 11 languages.
3.12. Common Registration Format on the e-biz Portal of DIPP: Ministry has launched on 9th March 2016 the Common Registration Format on the e-biz Portal of DIPP, for registration under 5 Central Labour Laws viz.
3.12.1.The Employees Provident Fund & Miscellaneous Provisions Act, 1952
3.12.2.The Employees State Insurance Act, 1948,
3.12.3.The Building & Other Construction Workers (Regulation of Employment & Conditions of Service) Act, 1996,
3.12.4.The Contract Labour (Regulation & Abolition) Act, 1970, and
3.12.5.The Inter-State Migrant Workmen(Regulation of Employment & Conditions of Service) Act, 1979
3.13. 56 Registers reduced to mere 5
3.14. Registration process for EPFO and ESIC fully online on real-time basis:
3.14.1.In EPFO the process of allotment of registration number to any employer is totally online with no manual intervention.
3.14.2.Once an application is submitted successfully the registration number allotted is displayed immediately within a few minutes.
3.14.3.There is no visit of any personnel from the EPFO for collection of any documents as the required documents are uploaded by the employer at the time of application submission itself.
3.14.4.Similarly, in ESIC, the registration under ESI Act is done online on real time basis without requirement of any inspection or physical documents.
3.14.5.No human intervention/approval is required for registration of employer.
3.14.6.Registration number is generated once the information is submitted successfully and Registration Letter can be printed from the same screen.
3.14.7.The Registration letter and password is also sent to the email id of the employer instantly.
End of part-1
To continue in four more Parts dealing with each of the 4 Codes