Issues in Labour codes

Issues in Labour codes

Context: The labour codes will only better India’s ‘ease of doing business’ ranking instead of improving conditions of employment

What is the Significance of Labour codes?

  • Will generate employment and secure the basic rights of the workers.
  • It will universalise the right to minimum wage of workers and social security entitlements.

Why, have the labour codes not been universally welcomed by workers?

  • Social Security net is not universal: The codes mandate benefits of Employees’ State Insurance (ESI) and Provident Fund (PF) only for workers belonging to establishments employing 10 workers or more. This leaves out nearly 80% of all Indian workers in the informal sector from the ambit of these benefits.
  • Inadequate hospitals and dispensaries under ESI
    • The ESI employed around six doctors per one lakh beneficiaries in 2016, as against the World Health Organization norm of 100 doctors.
    • With the new codes seeking to cover 20% of all workers, the membership would further increase to around 10 crore workers a three-time increase over the membership in 2019 (3.6 crore). The available capacity of the hospitals and dispensaries would evidently be inadequate.
  • Disparity on ESI coverage between states: The ESI coverage follows the map of industrial growth in the country. Thus, in industrialised States like Karnataka and Tamil Nadu, the ESI covered is around 20% of the population as beneficiaries in 2016 whereas, for Bihar the ESI covered is only 0.7%.
  • Abridgement of cess-based welfare boards: The new labour codes also does away with a number of existing cess-based welfare schemes. For example, the Beedi Workers Welfare Board which covers five lakh home-based women workers.
  • Fixed Minimum wage is meager: The floor wage announced more recently by the Finance Minister of ₹202 is way less compared to the Labour Ministry’s Expert Committee recommendation on Wage in 2019 i.e. is ₹375 per day.
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