In an interview, Mr Santosh Gangwar, the union minister for labour and employment, stated: “The OSH Code seeks to establish a dynamic occupational safety regulatory framework in consonance with the changing technology and working conditions.” This was an extremely well thought out statement made by the minister – the Code truly lays down a ‘dynamic’ framework for safety standards – in other words, allowing employers to modify and amend standards of safety based on their need (defined in his statement as ‘changing technology’).
Hours of Work – Then and Now
This dynamic framework starts from the basic and core right to an 8 hour workday and overtime pay at double rate for any work done beyond those hours. The Code (section 25) states that “No worker shall be required or allowed to work, in any establishment or class of establishment for more than (a) 8 hours in a day; and (b) the period of work in each day shall be so fixed, as not to exceed such hours, with such intervals and spread overs, as may be notified by the appropriate Government.” Together sub-sections (a) and (b) are contradictory: If workers are not allowed to work for more than 8 hours in a day, why has the law left it open ended for appropriate governments to change the hours of work?
Many media outlets have mis-reported that the draft rules have allowed for the increase of working hours in a working day to 12 hours. What the draft rules state in reality is that the spreadover in a day can be extended upto 12 hours, which is no different from what the law was. But what the draft rules have not clarified is the process and conditions under which an appropriate government can change the period of work in a given workday, thus providing arbitrary power to governments both at the centre and the states to amend the statutory hours of work.
While the union government has made every effort to centralise power, in this specific respect, and a few others, they have allowed states to share the power to amend the critical right of workers to an 8 hour workday. This generosity comes from the fact that the centre is not willing to take the blame for changing the hours of work which might lead to a political crisis. Thus this power has been granted to the states such that when one state, whichever it may be, initiates the process of increasing the workday, other states will be forced to follow suit or live under the mortal fear of losing investment in their state, thereby triggering a ‘dynamic’ race to the bottom. Consequently the standard for hours of work will keep changing across the country without the union government taking its blame.
Who is an Employer under the Code?
The last two decades have been marked with struggles of contract workers proving ‘sham and bogus’ employment contracts of employers and winning regularisation battles. The attempt of employers to hire workers under the contract labour system thereby denying them the rights of regular workers were in many instances met with stiff legal opposition. Obviously this was not an outcome that employers envisaged as their rate of profit earned is critically linked to suppressing the wage cost (including employers’ contribution to social security and expenditure on workplace safety). The Contract Labour Act clearly held the principal employer responsible for all the duties of an employer vis a vis a workplace, irrespective of the nature of contract of the worker employed there. Thus hiring workers through a labour contractor was only profitable till it was challenged in a court of law. With even the judiciary on their side, the law was too rigid to allow employers to get away with their intent to deny workers their due.
The OSH Code has removed this ‘rigidity’ for the employers in one clean stroke. It has defined a contractor to be an employer. Thus principal employers are no longer responsible for the workers hired through a contractor – the contractor is responsible for them. Thus no contract is ‘sham and bogus’ under section 10 of the now repealed Contract Labour Act. No worker can claim regularisation from a principal employer even if they have worked at the same establishment through their life.
Further, with the introduction of Fixed Term Contracts along with this redefining of ‘employer’, no worker will ever be able to claim permanent status at any workplace. The introduction of compulsory issuance of appointment letter to all workers is like thick makeup over painful bruises. The long standing demand of workers for an appointment letter has been to establish their employment right. The present code allows employers the right to issue appointment letters to workers with the date of termination, without providing workers with a right to seek redressal. Technically, under the code, a worker can work in an establishment now for a lifetime without any continuity of service with a different fixed term contract for every day, with an appointment letter stating the same for each day. The benefits of workers being employed at the same job for years will now rest only with the employer where they will have access to experienced workers with skills to generate high productivity and yet not pay for that.
The Game of Death
Speaking in the Lok Sabha, Minister Gangwar stated that the applicability of these codes have been expanded to extend to over 50 crore workers across sectors. According to the World Development Indicators Database of the World Bank, India’s labour force was 517.49 million (=51.75 crores) in 2019. This implies that according to government, the labour codes will apply to the entire workforce. This sounds like a complete game changer insofar as most of the earlier labour laws only applied to the organised workforce which constituted less than 7% of the total workforce, with the remaining 93% being what we knew as the informal workers.
If we look closely at each of the codes we find a different story. The provisions of the OSH code that applies to workers in factories now applies to all establishments using power employing 20 workers or more, or not using power and employing 40 workers or more. Under the factories act, these parameters were 10 or more workers in establishments using power, and 20 or more workers in establishments not using power. By doubling the requirement for workers employed, the code allows all those establishments, that employed 10 to 20 workers in establishments using power and 20 to 40 workers in those not using power, that till date were regulated by the labour department to step outside the purview of regulation. Thus all workers in these small establishments who were earlier protected by law and hence fell in the so called ‘privileged’ 7% of the workforce, will now join the number of the informal workforce.
Making the process of registration of new establishments simple and in fact, automatic, if there is delay in verification, along with a single return filing for all statutory requirements, there is nothing that can stop all medium and large establishments from breaking up their production units into multiple small units below the threshold limit, thereby ensuring that all workers are outside the regulatory framework. Hence this amendment to the applicability read with the ease of registration and filing of annual return, will eventually shrink the entire ‘formal’ workforce.
The increase in the applicability norm for application of the section of the OSH Code that applies to Contract workers and Interstate migrant workers has the same implication as above.
In the case of Contract workers, the applicability has been increased from every establishment and contractor who employed 20 or more workmen, o n any day of the preceding 12 months as contract labour to every establishment and manpower supply contractor who employed 50 or more workers on any day of the preceding 12 months. This again as explained above means that all the workers who were protected earlier under the Contract Labour Act working in establishments or under contractors hiring 20 to 50 workers will now be outside the regulatory framework. In addition, the new provision for licensing of contractors allows for ‘work specific’ licences. The OSH allows issuance of ‘work specific’ licenses to contractors in cases ‘where the contractor does not fulfil the requisite qualifications or criteria’, to employ contract labour, or execute project through contract labour, only for a specific project as specified in the licence. For a contractor, this basically means: heads I win, tails you lose – even if the contractor does not fulfil the criteria required under this specific code for employing contract workers, that contractor can be provided a license to hire workers. Thus the law in itself puts in place a provision to violate the requirements of the law.
And finally, in the case of protection of migrant workers under the OSH Code, the increase in the applicability norm from every establishment or contractor which employed 5 or more inter-State migrant workmen on any day of the preceding 12 months to very establishment which employed 10 or more inter-State migrant workmen on any day of the preceding 12 months implies that the provisions of the Interstate Migrant workers act that was rarely implemented for migrant workers now will not even apply to many more contractors and employers. The OSH code has conveniently even dropped its applicability to contractors bringing in the migrant workers.
The covid induced lockdown revealed the true nature of the crisis of migrant worker with tens of thousands of migrant workers desperately trying to escape the cities where they lost their incomes to return to their villages as they had no protection from this kind of crisis. Employers took no responsibility, neither did the contractors for this huge section of the working population of the cities. Many would argue that all those who were walking back were not workers – many were self employed. This is true BUT these so-called self employed workers were petty producers such as a tea stall owner in a busy marketplace or a vegetable vendor or a hawker or a street side tailor who were all dependent on the functioning of the city. The lockdown ensured they lost their source of income. These are people who are part of the support system that keeps an economy functioning and yet there is no one who is responsible for their survival.
The media has reported that the interstate migrant workers have got special attention in the OSH Code. “… (from) allowing them to register themselves on an online database, from making provision for an annual “journey allowance” to the offering of portability option on public distribution system and construction cess benefits, the migrants have a lot to cheer …”. To clarify this claim: for those few interstate migrants who will fall under regulatory framework of the OSH Code, journey allowance was a right even under the Inter-state Migrant workers Act. In fact, under the latter, workers were entitled to a journey allowance:
- equal to an amount not less than the fare from the place of residence in the state of origin to the place of work in the other State of the migrant worker;
- payable by the contractor to the worker both for the outward and return journeys;
- along with payment of wages during the period of such journeys, as if the workers were on duty during the journey.
This has been changed under the OSH Code to a journey allowance:
- equal to an annual lump sum amount of fare for to and fro journey from state of origin to place of work;
- this amount is subject to minimum service period, periodicity and class of travel and other conditions as may be specified by government.
Even if we ignore the conditionalities for eligibility of the right to a journey allowance for a migrant worker, the provision of an annual lump sum amount implies that it will not matter what the amount shall be if a worker is a person from Assam working in the tea plantation of Kerala or a worker across the border from Tamil Nadu working in the same plantation. The provision in the Interstate Migrant workers Act for a paid fare aimed to allow migration from poorer states to better off states and urban centres to address interstate inequalities. The modification of this provision skews the balance further against workers coming from poorer states and interior locations.
Further, this journey allowance was supposed to be paid by the contractor who brought the migrant workers. The new code holds employers responsible for this. As far as migrant workers are concerned, no employer hires a ‘migrant’ worker – they hire a worker either directly or through a contractor. Their status as a migrant is irrelevant to an employer. Logically thinking, why would an employer hire a migrant worker, if they have to pay a special allowance to them? The reason for hiring a migrant worker is that they come cheap. So as far as an employer is concerned, no one is a migrant and for a migrant worker, no one will own up to be a migrant if that hinders their prospect to gain employment. It is only the labour contractor who brings workers themselves and supplies them to an employer through a contract. This establishes a direct relation between the contractor and the migrant worker. This was therefore the reason for licensing of the contractors and holding them responsible for payment of journey allowance to the migrant workers under the previous law.
In addition, the Interstate Migrant workers Act allowed for the provision of a Displacement Allowance to be once again paid by the contractor to every inter-State migrant workman at the time of recruitment, equal to fifty per cent of the monthly wages payable to the worker. This amount was not refundable and was meant to be in addition to the wages and other allowances payable to the worker. This provision has been wiped out in the OSH Code. So even in the case of migrant workers, once again we are back to heads I win and tails you lose for employers.
Minimum Government, ‘Smart’ Governance
India is a civilised democratic country – how is it then that these amendments are not seen as in violation of ILO conventions and the core labour standards?
This is where the smart governance comes in. No right has actually been legally taken away. Every right that used to be guaranteed are in place BUT the amendments are carefully drafted to make it easy for employers to get away with violation, and not pay for it. Every right that was earlier written in stone, at least in law, now comes with multiple riders that will make it impossible for workers to access and easy for employers to violate. For example, a contractor must have licenses for hiring contract workers and must also fulfil certain criteria to be issued such a license. This is no different from what it used to be and what we think is necessary. However, what the code now allows are ‘work specific’ contracts that do not require a contractor to meet these criteria for a license.
The code holds contractors responsible in cases where employers should be held responsible while the code holds employers responsible where contractors should be held responsible. Apparently this looks conflicting but the law very cleverly identifies the actual entity that should be held accountable and passes the burden of responsibility to those who cannot be held accountable. A contractor is now responsible for payment of wages, which is impossible to impose, as the contractor is only any intermediary dependent on the principal employer for payout. If the principal employer does not pay the contractor, the contractor cannot pay the workers. But the code puts the burden of payment of the wage on the contractor, and not on the principal employer. Similarly in the case of the interstate migrant workers act, the workers have a direct relation with their labour contractors who bring them and hence in this case, the contractors have been taken off the radar of responsibility and this burden of responsibility has been placed on the employer. All three codes reveal this kind of ‘smartness’ that tilts the balance completely towards employers and leaves working people of this country with toothless laws.