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EDITORIAL ANALYSIS : In ‘India as Eden’ offer, the apple of diluted labour laws

 

Source: The Hindu

 

  • Prelims: Current events of national importance(Different social service Schemes, Labour laws etc)
  • Mains GS Paper II & III: Social empowerment, schemes for vulnerable sections, development and management of social sectors/services.

ARTICLE HIGHLIGHTS

  • The Tamil Nadu Assembly that amended the Factory Act of 1948, to extend the number of working hours in a day, from eight hours to 12 hours has announced the withdrawal of the legislation
    • A similar legislation was passed in the Karnataka Assembly.

 

INSIGHTS ON THE ISSUE

Context

About the labour codes:

  • The new set of regulations consolidates 44 labour laws under 4 categories of Codes namely:
  1. Wage Code
  2. Social Security Code
  3. Occupational Safety, Health & Working Conditions Code
  4. Industrial Relations Code.

 

 

The Code on Wages, 2019:

  • It applies to all the employees in the organized as well as unorganized sector
  • It aims to regulate wage and bonus payments in all employments and aims at providing equal remuneration to employees performing work of a similar nature in every industry, trade, business, or manufacture.

 

The Code on Occupational Safety, Health and Working Conditions, 2020:

  • It seeks to regulate the health and safety conditions of workers in establishments with 10 or more workers, and in all mines and docks.

 

The Code on Social Security, 2020:

  • It consolidates nine laws related to social security and maternity benefits.

 

The Code on Industrial Relations, 2020:

It seeks to consolidate three labour laws namely:

  1. The Industrial Disputes Act, 1947
  2. The Trade Unions Act, 1926
  3. The Industrial Employment (Standing Orders) Act, 1946.
  • The Code aims to improve the business environment in the country largely by reducing the labour compliance burden of industries.

 

Benefits of Labour Codes:

  • Reduce litigation: They expected to reduce litigation as it streamlines the definition of wages.
    • It will substantially reduce the number of minimum wages in the country from the existing more than 2000 rates of minimum wages.
  • Minimum wage: They ensure that every worker gets a minimum wage which will also be accompanied by an increase in the purchasing power of the worker thereby giving a fillip to growth in the economy.
  • Consolidation and simplification of the Complex laws: The three Codes (IR , SS & OSHW) simplify labour laws by subsuming 25 central labour laws.
    • It will boost industry & employment and will reduce multiplicity of definition and multiplicity of authority for businesses.
  • Single licensing method: It will give fillip to industries by ushering in substantive reform in the licensing mechanism.
    • Earlier, industries had to apply for their license under different laws.
  • Ease of Doing Business: According to the industry and some economists, such reform shall boost investment and improve ease of doing business.
  • Gender parity: The maternity leave is increased from 12 weeks to 26 weeks.
    • Women were allowed to work in mines under Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).

 

Issues with these codes:

  • Do not provide flexibility: The work hours provisions for regular workers do not provide flexibility to fix work hours beyond eight hours a day.
  • Part-time employment: The codes have also missed laying down uniform provisions for part-time employees.
  • Employee wages: There are also provisions that impact employee wages.
  • Fines on businesses: The labour codes also chalk out fines on businesses for non-compliance of provisions, second offenses and officer-in-default.
  • Impact of pandemic: After the current pandemic situation, a majority of small businesses are in no position to adopt and implement the labour code changes.

 

Issues with the Amendment in Factory Act of 1948:

  • The eight-hour working day, adopted by the International Labour Organization in 1919, is a hard won right by workers and trade unions
  • It clearly signals the intent of governments to house investments by transnational corporations (through their supply chains), by ramping up capacities and provisioning incentives.
  • Legacy of four labour codes which have weakened the labour protection architecture, lowered thresholds and squeezed collective bargaining, thereby effectively curtailing their actual operability.
  • The sustained processes of consultations with workers being short-circuited or ignored altogether.
  • It shows a top-down approach of governance.
    • It prioritizes a favorable investment climate over the well-being of workers.

 

What does Apple’s opening of  two retail stores in India(Mumbai and Delhi) depict?

  • Apple, and by extension, other transnational corporations too, thrives by tantalizing a race between India and China.
  • Through its suppliers it incentivises this artificial competition
  • Retaining the flexibility to operate across contending geographies and feeding on consumers’ tastes, who view the possession of its devices as a status symbol.

 

 

Way Forward

  • Under its ‘Make in India initiative’ and Production Linked Incentives scheme, the government aims to turn the country into a manufacturing hub, like China.
  • The electronics industry has received top priority and, within it, Apple has come to be considered the gold standard.
  • The central government has been working in close coordination with various State governments, including Karnataka and Tamil Nadu, to work out common strategies to capitalize on the company’s diversification plans away from China.
  • Foxconn has had a stable base in Tamil Nadu encouraging other Taiwanese companies in other sectors as well
    • As a part of its CSR obligations, it has even reciprocated by making massive financial contributions to the State government’s educational initiatives.
  • The growing indivisibility of time(economist Guy Standing), as marked by these legislative changes, is also illustrative of the present nature of the production-management systems and labour regime implemented in Apple-Foxconn across geographies.
  • The dormitory labour regime as practiced in Mainland China (which in effect looks to be recreated in India) blurs the socio-spatial boundaries between work and life.
  • A highly strictly controlled, constantly disciplining, just-in-time production system that demands orderliness and standardization from workers
    • The human costs of the squeeze are not only physical but also mental and emotional.

 

 

QUESTION FOR PRACTICE

  1. Account for the failure of the manufacturing sector in achieving the goal of labour-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.(UPSC 2017)

(200 WORDS, 10 MARKS)

  1. The paradigm driving employment and labour policies needs to change for better-quality livelihoods. Discuss.

(200 WORDS, 10 MARKS)