Proposed changes in labour laws – pro-capitalist and anti-worker

The capitalist class and its spokesmen have set the agenda of implementing various changes in laws and policies governing the conditions of employment of wage labour, all with the aim of improving the “ease of doing business”. The performance of every party that takes charge of the government, at the centre and in the states, is being measured by how much it improves the profitable environment for capitalist corporations, Indian and foreign. Every pro-capitalist and anti-worker change in labour laws and regulations leads to an improvement in an index of the “ease of doing business”, designed by the World Bank.

In its first year after taking charge, the Modi government declared that it will combine 44 laws related to industrial relations and rights of workers, into just four laws, called labour “codes”. The four proposed Codes relate to (i) industrial relations; (ii) wages; (iii) social security; and (iv) safety, health and working conditions. The declared aim is to “simplify” labour laws, allegedly for the benefit of both capitalists and workers.

Apart from the proposed central labour codes, various other changes have been implemented by this government. The Apprentice Act was amended in November 2014 to legalise the practice of super-exploiting young workers without regularising their jobs. The government has also used various means, including notifications, ordinances and policy decisions to bring about anti-worker changes. Workers employed in start-up companies have been deprived of any legal recognition and protection of their rights. A system of “fixed-term” contracts has been introduced, to deprive workers of any semblance of job security.

The biggest capitalists of India and of the world have praised the Modi government for having improved India’s score in the ease of doing business index. At the same time, they are concerned at the lack of progress in implementing the proposed central labour Codes.

Enactment of the central labour codes has been blocked due to the united opposition of workers’ unions all over the country. Even the central trade union federation affiliated to the BJP has expressed opposition to the proposed Codes, pointing out that they are all pro-capitalist and anti-worker in content.

In this context, it has been recently reported that the Prime Minister’s Office has asked the Labour Ministry to postpone those proposed central labour codes which are perceived to be pro-capitalist and speed up the passage of “worker-friendly” labour codes ahead of the 2019 Lok Sabha elections.

The corporate news media have started doing the propaganda that the Code on Industrial Relations may be postponed while some of the others may be implemented in the coming year, allegedly because they are “worker-friendly”.

This propaganda is a blatant lie. None of the proposed central labour Codes are for the benefit of the working class. They are all designed to benefit the capitalist class.

Code on Industrial Relations

Even the bourgeois spokesmen admit that the proposed Code on Industrial Relations is anti-worker and cannot be expected to be implemented ahead of the 2019 Lok Sabha elections.

The Bill on the Code on Industrial Relations was introduced in 2015. It seeks to integrate three major laws – the Trade Unions Act of 1926, Industrial Employment (Standing Orders) Act of 1946 and the Industrial Disputes Act of 1947. In the process of doing so, it seeks to impose more restrictions on workers forming unions of their choice, including restrictions on “outsiders”. It also seeks to permit the majority of factories to lay off workers without seeking government permission, by raising the minimum number of employees required for seeking such permission from 100 to 300 workers.

Various state governments, including those of Rajasthan, Maharashtra, Madhya Pradesh and Haryana have already amended state specific laws related to industrial relations, to bring them in line with the proposed new central Code on Industrial Relations.

Code on Wages

The Bill on the Code on Wages was introduced in the Lok Sabha in August 2017. It seeks to combine into one code the Payment of Wages Act of 1936, the Minimum Wages Act of 1948, the Payment of Bonus Act of 1965 and the Equal Remuneration Act of 1976.

Workers’ unions have been demanding that the Minimum Wage be fixed according to the formula recommended by 44th Indian Labour Conference (ILC) in 2012 and reconfirmed by the 46th ILC in2015.

The ILC formula calculates Minimum Wage by adding the value of food, clothing, rent, transport, health, education and other basic needs of an average worker’s family at 2015 prices. Based on this formula, the Seventh Pay Commission recommended Rs 18,000 as minimum wage for Central government employees. Trade Unions are fighting that the national minimum wage be fixed at this level. The government refuses to do so.

The Bill on the Code on Wages permits each state government to fix minimum wages as it pleases, thereby laying the ground for states to compete with each other in lowering the minimum wage in order to attract capitalist investment.

One of the draconian provisions of the Bill on the Code on Wages is that a worker can be penalised by cutting 8 days’ wages for every single day that he is absent from work.

Code on Social Security

Workers’ organisations have been demanding that every single worker must be guaranteed social security as a matter of right. The Bill on the Labour Code on Social Security and Welfare, introduced in 2017, pretends to be extending social security to all workers. The proposed Bill will actually contribute to increasing the insecurity of workers as it seeks to replace 15 existing social security legislations without specifying whether all these benefits will continue under the new Code.

In reality, the majority of workers will remain excluded. Only those who have regular employment and pay contributions to the social security funds will be eligible. It even excludes women, who already have two children, from maternity benefits.

The two major existing schemes, Employees’ State Insurance (for health care) and Employees’ Provident Funds (for post-retirement) are restricted to workmen belonging to factories or institutions employing a minimum number of workers. They are also not applicable to all workers employed in such institutions, but only those at the lowest wage level.

The changes being proposed in the new Code include subjecting the hard-earned long-term savings of workers to “market risk”, by handing over these precious funds into the hands of private profiteering companies, under the banner of “public-private partnership”.

Code on Safety

Every day, reports come of fires and explosions in factories in which hundreds of workers die. Many of these factories are not even registered. The workers in these factories have no rights, not even minimum safety procedures are in place. Workers’ unions have been demanding that every factory must be registered and made to comply with safety norms.

The Bill on the Code on Occupational Safety, Health and Working Conditions, was introduced in March 2018. It does not include any step towards universal registration, as it will harm the “ease of doing business”.

One of the first acts of the Modi government, for which it received much applause from the capitalist class, was to ease the requirement for mandatory inspection of labour safety and health standards, in the name of doing away with the “Inspector Raj”.

The proposed central labour codes, taken together, would exempt factories employing less than 40 workers from having to comply with any labour laws or standards. Labour contractors employing 50 or less workers will also be exempt.


The capitalist class views workers’ organisations, their struggles, and the rights of workers as presently defined in law as roadblocks to the drive for maximum profits. To improve the “ease of doing business”, making it easier for Indian and foreign monopoly capitalists to reap maximum profits, they want to weaken and destroy the existing trade unions. They want to make it extremely difficult for workers in relatively new firms to organise themselves into unions. They want to deprive workers of rights won through decades of struggle.

Both the BJP and the Congress Party are committed to implement this agenda of the capitalist exploiters, to improve the “ease of doing business”.

The only way forward for the working class is to strengthen our fighting unity against the capitalist class and all attacks on our rights. We must strengthen worker-peasant unity against the program of globalisation, through liberalisation and privatisation. Our goal is to overthrow the rule of the exploiting minority, establish the rule of the toiling majority and carry out the transition from capitalism to socialism, reorienting the economy to fulfil human needs and not capitalist greed.

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