Perceived Changes in Welfare of Workers as a Result of Codification of Labor Laws

Abstract

Labour code on wages got the assent of the President on August 8, 2019 following which ministry of law and justice has published it in the gazette. In its wake it subsumes and repeals The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976. The Code on Wages is expected to regulate wage and bonus payments in the organized and un-organized sectors irrespective of their wage ceiling and type of employment. It seeks to universalise the provisions of minimum wages and timely payment of wages, which will be computed based on minimum living conditions. While the Central Government will continue making wage-related decisions for employments such as railways, mines, oil fields, central public sector undertaking etc., the State Governments shall make such decisions for all other employments including for private sector establishments. This code will impact 50 crore workers across the country. The codification of labour laws has removed the multiplicity of definitions and authorities, without compromising on the basic concepts of employee welfare and benefits. It is expected that this code will make it easier for employers, both in the organised and the unorganised sector to understand and thereby comply with the code.

However, there still are questions that need to be answered; for instance codification of labour laws is more of a consolidation of laws that retains most of the substantive provisions of the earlier laws. Though we have been able to zero in on a singular definition for the wage we have not been able to reduce the complicacies in structuring of wages. We have not been able to get around the problems of increasing unemployment or decreasing skill levels. Neither have we been able to find an affirmative action that can be taken to reduce the gender and other biases. This paper is an attempt to find out how employers in the unorganised sector feel about this codification of laws and their perception of changes in the welfare of employees. We try to find out if the employers feel that this codification will lead to an improvement of remuneration, living standards and in lowering of the rate of unemployment.  This study is only a brief survey of some 50 employers in the NCR and we seek to extend the survey to perception of workers.