The draft rules released recently to put muscle on the framework of the four labour codes have hardened some of mechanisms notified in the codes last November. The codes that replace 29 legacy labour laws—on wages, industrial relations, occupational safety and social security—have been hanging fire since 2020, when they were passed by parliament. To make them operational, the rules now need to be finalised after taking on board the feedback received in the next few weeks.
At first glance, the proposed rules make the codes—promulgated to streamline laws and improve compliance, among other things—require excessive documentation, making implementation cumbersome. They propose stricter norms on minimum wages, with detailed provisions for calculating a ‘living’ wage. However, these include a minimum calorific equivalent of food under a calculation that has not been updated since 1957. By mandating that basic pay must be at least half the total compensation, they reduce the take-home amount even while guaranteeing delayed income like provident fund and gratuity. Significantly, the rules omit specifying the daily hours of work, leaving it to the states to notify limits. This effectively rolls back the historically-accepted eight-hour working day and opens the door for longer workdays that several state legislatures have cleared in the recent past.
The positive features include an Aadhaar-linked registration for unorganised workers aged 16 and above. This will enable them to access social security benefits across states even when they change employer or occupation. However, while re-balancing the rights of employers and employees, the aim seems to be to ensure a greater flexibility for the former. For instance, the paperwork and conciliation processes for holding a legal strike are so elaborate that it would be impossible to do so within 150 days of giving notice. On the other hand, no government permission would be required for lay-offs and closure for units with less than 300 workers. The rules, while extending some security to gig workers, make it tougher for them to seek benefits by requiring them be employed for at least 90 or 120 days with one or multiple platforms.
Now that the draft rules are open for feedback, this is the time to make them more equitable before they are set in stone. While doing so, the tough reality facing the average Indian worker must be borne in mind.