Why India’s ‘historic’ new labour laws may not work for workers

New regulations aim to protect workers and cut red tape, but labour groups say many in the informal sector lose out.

India child labourer
Most Indian workers operate in the informal sector without contracts or other protections [File: Ahmad Masood/Reuters]

India’s parliament may have passed what it describes as “historic” labour laws that the government says help workers and business alike, but activists fear a loss of labour rights in a push for profits.

Experts said the laws – aimed at protecting workers and streamlining labyrinthine regulation – exempt tens of thousands of smaller firms, and rob workers of a right to strike or receive benefits.

Almost 90 percent of India’s workers operate in the informal sector with no security, low pay and little or no benefits.

The new laws, in the works for years, carry measures to meet the new challenges of COVID-19, which has seen millions lose jobs under lockdown and forced many to walk thousands of miles home where they struggled to find work.

The laws usher in a range of worker rights, such as health checks, home visits, emergency aid and written terms.

India’s labour minister Santosh Kumar Gangwar described the “historic” bills as a “milestone in labour welfare” in India, whose rapid economic growth was built on the back of a fast-expanding labour force working with limited rights.

Red tape, weak infrastructure and poor governance have held back growth, firms say, while advocates for workers’ rights say greater fairness is needed if India is to take a place among developed economies.

“After 73 years of India’s independence, complex labour laws will be replaced by simpler, more effective and transparent laws,” Gangwar said.

“Labour codes will protect rights of workers and make it easier for industries to function … To set up businesses, they won’t need multiple registrations and licences,” he said.

India had 44 labour laws that have been replaced by four labour codes, the first passed last year that guaranteed minimum wages to more workers.

On Wednesday, a sparsely-filled parliament passed the bills on industrial relations, health and safety, and social security, despite a boycott of proceedings by opposition leaders.

Out in the cold

Labour experts said the reforms would further expand India’s informal sector workforce of more than 400 million workers, leaving many without the protection of formal contracts and benefits such as paid holidays and healthcare.

Linking social benefits to the size of the establishment would leave out “millions of informal workers who work in small units, or perform home-based work”, said labour rights non-profit Aajeevika Bureau in a tweet.

The new laws related to layoffs and closures apply only to companies with more than 300 workers, leaving out millions of workers in smaller firms, campaigners said.

“The new laws are tilted substantially towards business,” said labour economist KR Shyam Sundar.

Source: Reuters