Finance Minister Nirmala Sitharaman on Friday made clear the government’s intention to bring in labour reforms as she proposed streamlining multiple labour laws into a set of four codes while presenting the Union Budget.
Proposing a uniform code on wages, Sitharaman said, “The government has proposed to streamline multiple labour laws into a set of four labour codes. This will ensure the process of registration and filing of returns gets standardised and streamlined. With labour definitions getting standardised, it is expected that there will be less disputes.”
The government had first proposed major reforms, including plans to reduce 44 labour laws to four broad codes, in November 2015 in an attempt to overhaul India’s archaic labour laws and make them compatible with the current needs of the labour markets.
Four of these proposed laws — the Industrial Relations Code Bill, Wage Code Bill, the Small Factories (Regulation of Employment and Conditions of Services) Bill, and Employees Provident Fund and Miscellaneous Provisions (Amendment) Bill — would deal with wages, social security and welfare, safety and industrial relations.
The first of these labour codes – Wage Code Bill – will likely be enacted in the ongoing budget session, paving the way for benchmarking minimum wage for different regions.
The bill, which the government will seek to get passed in the current session, aims to combine Payment of Wages Act, 1936, the Minimum Wages Act, 1949, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976 into one code. It has also proposed the concept of a statutory National Minimum Wage for different geographical areas. Once enacted, no state will be able to fix the minimum wage below the benchmark decided by the Centre for that region.
The code also provides for setting up of national minimum wage. The central government can set separate minimum wages for different regions or states.
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