Implementation of Labour Codes
Over five years after being cleared by Parliament, the Centre has implemented four significant labour codes that cover wages, industrial relations, social security, and working conditions.
Main Features of Labour Codes
- The labour codes encompass the Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health and Working Conditions Code.
- These codes replace 29 Central labour laws, aiming to widen the social security net, including for gig and platform workers.
- Provisions include compensation for accidents during travel between home and the workplace and the introduction of an Aadhaar-linked Universal Account Number.
- They define a National Floor Wage and mandate timely wage payments.
- Provisions for fixed-term employment, retrenchment, and restricted strike rights have been contentious.
Key Changes and Provisions
- Fixed Term Employment (FTE): Enables employers to hire workers under fixed-term contracts while ensuring benefits akin to permanent staff. Workers become eligible for gratuity after one year of service.
- Wages: The Code on Wages aims to redefine wage structures to enhance the basic pay component, thus improving social security provisions.
- Social Security Contributions: Aggregators employing gig workers must contribute 1-2% of annual turnover for social security, capped at 5% of total payments.
State and Government Actions
- The Centre will provide a 45-day window for public comments on draft rules for the codes and plans to engage with stakeholders for finalizing regulations.
- States like Karnataka, Telangana, Bihar, and Rajasthan have initiated social security laws for gig workers, influencing the Centre's decision to implement the Social Security Code.
- Most states, except West Bengal, have made necessary legal changes to align with the new codes.
Implementation Challenges
Experts suggest the initial years of the codes' implementation will involve addressing challenges and refining processes to ensure effective execution. The codes aim to impact millions, particularly focusing on improving the conditions for gig workers and those outside existing welfare schemes.