Rebooting Economy 33: Where have the good old full-time decent jobs gone?

Part I of this two-part article traces the growth of temporary employment in government and the practice of keeping a larger number of posts vacant even in the face of a severe job crisis

Prasanna Mohanty | October 5, 2020 | Updated 19:05 IST

Instead of addressing the precarity of workers, the central government is adding to it by re-hiring more and more retired employees on contract

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  Rebooting Economy 31: Will new labour codes protect more workers or less?

It is amazing how India's high economic growth in the past few decades has brought in a far higher unemployment rate (it touched 45-year-high in 2017-18), disappearance of good old full-time (permanent) decent jobs. Their place has been taken over by casual, contract and gig jobs which are low paying and without adequate protections.

India's high growth is also marked by a sharp rise in inequality of income and wealth in which those at the bottom of economic pyramid rapidly lost their share in the economy. (For more read "Unravelling GDP growth I: More growth is producing more inequality and misery " and "Coronavirus Lockdown XII: Why the wealthy should be taxed more ").

The economic lockdown has added to their precarity as millions lost their jobs and other sources of livelihood. After the new labour reforms were notified recently, some experts from the India Inc. wryly commented that the social benefits to workers were "deceptive" and these reforms would eventually create "a permanent cadre of insecure and temporary employees".

The labour reforms expand social security marginally while providing more flexibility to hire on contract and also fire. Such flexibility has in the past worked to the advantage of private businesses at the cost of workers, as several economic studies have found. (For more read "Rebooting Economy 31: Will new labour codes protect more workers or less?" & "Rebooting Economy 32: Wage code leaves millions of workers out in cold")

Instead of addressing the precarity of workers, the central government is adding to it by re-hiring more and more retired employees on contract.

Centre's re-hiring spree of retired employees on contract

The Centre is not only promoting contract employment (temporary) in private sector through new labour reforms, which have expanded the scope of its use and added Fixed Term Employment, but is doing so in its own domain.

On August 13, 2020, the finance ministry issued an office memorandum (OM) to fix remunerations for contract appointments of retired central government employees as consultants (highly skilled and domain experts) beyond the age of superannuation (60 years).

Such hiring would be through "nomination" or "on open market basis". In the case of nomination, the re-employment "shall ordinarily be for an initial period not exceeding one year" but in case of open market basis, "shall not ordinarily go beyond 5 years". For the nominated re-employment, it proposed a "fixed monthly amount" as salary after deducting the basic pension but without scope for increment or Dearness Allowance (DA). For open market-based re-employment, there would be no such restrictions.

The OM reveals that though such re-employment was allowed by an order of 1986, the Department of Personnel and Training (DoPT) had disallowed it beyond the age of superannuation (60 years) in 2002, which it seeks to overturn. Now the retired government employees can be hired for up to 5 years beyond the age of superannuation.

In 2017, the DoPT issued a similar OM for re-employment of retired government officials who had retired before 55 years of age and included Defence Force personnel/officers.

Such practices are disquietening for at least two reasons.

First, the central government has kept a large number of vacancies unfilled as a matter of routine even in the face of high unemployment earlier and now when the lockdown has rendered millions jobless.

Also Read: Rebooting Economy XXX: Rural India in far deeper crisis than what govt data claims

6.84 lakh vacancies in central government when millions are jobless

On March 5, 2020, the central government told Rajya Sabha that it had 6.84 lakh central government jobs/posts (regular civilian posts) vacant as on March 1, 2018. That was 18% of the total sanctioned posts of 38 lakh. About 84% of the vacancies were in Group C: 19,896 in Group A, 29,333 in Group B (Gazetted), 60,305 in Group (Non-Gazetted) and 5.74 lakh in Group C.

The numbers were the same as the Rajya Sabha was told on November 21, 2019.  

The overwhelmingly high percentage of vacancies in Group C (84% of total) indicates the government's apathy towards those at the bottom of the economic pyramid.

The Rajya Sabha has been repeatedly told that the UPSC, SSC and Railway Recruitment Board had made "recommendations" to recruit 1.35 lakh (19.7% of vacancies) during 2019-20. There is no sign of actual hiring until now.

The monsoon session of Parliament (September 2020) revealed information on vacancies in central universities and government schools: 42 central universities had 6,210 vacancies in teaching and 12,437 in non-teaching posts as on September 1, 2020; vacancies of teachers in government schools stood at 1.06 million or 17% of the total sanctioned strength (6.18 million) during the 2020-21 academic sessions.

Not filling vacancies is not new

The 7thCentral Pay Commission report of 2015 had revealed that the vacancies in central government posts (regular civilian) stood at 5.51 lakh in 2006, 6.61 lakh in 2010 and 7.47 lakh in 2014.

It also said that the central government's sanctioned posts were on a decline since 1994 (post-liberalisation era): From 41.76 lakh in 1994 to 40.49 lakh in 2014. The Rajya Sabha response on March 5, 2020, revealed that these had fallen further to 38 lakh in 2018.

In the meantime, a new finance ministry circular of September 4, 2020, caused further disquiet by asking all central government ministries and departments to shed posts of consultants, cut costs, and also put "a ban on new posts, except with the approval of the Department of Expenditure". Later the ministry clarified that this didn't amount to a ban on filling vacant posts.

Also Read: Economy XXIX: Exposing farmers to unregulated market is more likely to harm them

Assurances regarding recruitments make little sense or difference when millions don't have jobs, either because the lockdown forced millions out of it or the earlier years of high growth which didn't produce proportionate jobs.

While the UPA era (2004-14) was marked by job-less growth, the NDA II era (since 2014) has been marked by job-loss growth - first the economic misadventures like the demonetisation and GST which caused a massive job loss and then the sudden, untimely and unplanned economic lockdown when virus count was too low (about 650).

In the meanwhile, the central government has admitted to gross apathy and abdication of its duty by telling the Parliament (during the monsoon session of September 2020) that it had no data on migrants' job loss or their deaths while walking home during the lockdown or how many MSMEs and start-ups shut shop due to its unwarranted lockdown on March 25.

Private business information portal CMIE reported on September 7, 2020, that 21 million "salaried" (regular and formal sector) jobs were lost due to the lockdown. The regular wage/salaried group of workers are the most privileged ones in terms of job and social security but constituted 23.8% of the total workforce during 2018-19, as per the PLFS of 2018-19.

The second disquietening aspect of the central government's re-hiring of retired officials on contract is the rapid growth of temporary (contract and casual) workers in the government sector.

Also Read: Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

43% government jobs were temporary (casual and contract jobs) in 2013

The central government has stopped publishing data on organised sector workers after 2012, reflecting a general apathy to the state of employment.

As a result, successive Economic Surveys, right up to the 2017-18 one released in 2019 carries the same old set of data on organised sector employment data up to 2012. The Economic Survey of 2019-20, released in January 2020, discontinued publishing even that.

Those data never revealed how many in the organised sector (government or private) were temporary - casual or on contract. There is no such data with the government.

Here is a private assessment, by the Indian Staffing Federation (ISF), the apex body representing the staffing industry, published in 2014. It traces temporary workers in central government, state governments, PSUs, and local bodies.

Since no direct data is available, the ISF collected data from government functionaries and secondary government databases like various surveys (ASI and NSSO) and various government reports to estimate the size of temporary workers, which it defined as casual and short-term contract workers (less than 3 years) with or without written contracts. It counted all contracts of 3 years or more as "permanent".

It found that the overall hiring in the government sector is on a decline and "temporisation" is increasing.

Also Read: Rebooting Economy XXVII: Fiscal mismanagement threatens India's economic recovery

Some of its revelations were shocking.

• 43% or 12.3 million government sector workers were temporary by the end of 2013.
• 2/3rd of the incremental formal workforce was temporary with 80% of them in casual jobs.
• Professionals and high-skilled workers form a substantial chunk of casual and short-term contract employment (showed in the extract reproduced below).
• At least 6.9 million (56%) workers worked in government programmes like ICDS, NRHM, NRLM ("honorary" workers like Anganwadi Workers, Anganwadi Helpers and ASHA workers who receive "honorarium", not salary or wage.)

The following extract from this report shows distribution of casual and fixed short term contract (FSTCs) of less than 3 years.

As the extract shows, high-skilled professionals and teachers constitute a significant part of the temporary appointments in government - casual and short-term contract. Architects, engineers, teachers in schools and higher education institutions are some of them.

Also Read:Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

In a country with more than 50% population or 659 million people living below the World Bank poverty line for a low-middle income country ($3.2 of per capita per day living expense) even before the pandemic struck and millions more joining them after losing their jobs to the lockdown, the central government's approach to employment is shocking to say the least.

Part II of the article will look at more data on the subject and academic studies showing how growth in temporary/informal sector hurts both workers and economy.

Also Read: Rebooting Economy XXVI: Derailment of economy is not 'Act of God', it is 'Art of Misdirection'

Also Read: Rebooting Economy XXV: How a series of economic misadventures derailed India's growth story

Rebooting Economy 32: Wage code leaves millions of workers out in cold

Neither the Wage Code 2019 nor the draft Rules 2020 notified in July 2020 under it links wage to labour productivity, strengthen implementation regime, make minimum wage universal or limit working hours to 8-hour a day to improve the lot of workers

Prasanna Mohanty | September 29, 2020 | Updated 14:08 IST

Neither the Wage Code Bill, 2019 nor the draft Rules 2020 link minimum wage to labour productivity, meaning workers would continue to be denied their fair share

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There is an age-old idiom: the proof of the pudding is in the eating.

The new Wage Code Bill, 2019 was notified on August 8, 2019, promising equity and welfare of workers through universal minimum wage on the one hand and ease of doing business to help setting up more enterprises, thereby creating more employment on the other.  

More than a year down the line, there is no sign of a national minimum wage or a national floor-wage to provide a minimum standard of living to workers.  

The national minimum wage continues to be Rs 176 per day fixed in 2017. It was raised to Rs 178 - a raise by Rs 2 - days before the Wage Code Bill 2019 was passed while an internal committee of the labour ministry had proposed Rs 375 per day a few months earlier. This raise by Rs 2 was never even notified.

Also Read: Rebooting Economy 31: Will new labour codes protect more workers or less?

There are plenty of apparent flaws in the way the Wage Code Bill, 2019 and the draft Code on Wages (Central) Rules of July 7, 2020 framed under it have been designed.

Denying workers their share of productivity growth

Why wage is a big concern is known. One is the apparent disconnect with labour productivity. That is, higher labour productivity should automatically mean higher wage but that is not what is happening. 

In August 2018, the International Labour Organisation (ILO) published "India Wage Report" drawing attention to the flaw in the wage structure of India.  

It said the "average labour productivity", as measured by GDP per worker, increased more rapidly than "real average wages" in the post-liberalisation era. "According to one estimate", it said, "the labour share declined from 38.5 per cent in 1981 to 35.4 per cent in 2013".  

This decline is captured in the following graph.

The ILO report helpfully explained that the implication of faster pace of profit, rent and other income from capital vis-a-vis compensation towards labour is that "income is concentrated in richer households, which in turn increases inequality among individuals".

Neither the Wage Code Bill, 2019 nor the draft Rules 2020 link minimum wage to labour productivity, meaning workers would continue to be denied their fair share.

Poor implementation mechanism for minimum wages

It is not as if minimum wages did not exist in India before 2019, howsoever limited in scope. The problem was in its implementation as the Economic Survey of 2018-2019 highlighted.

It showed a large number of workers -19.4% of regular workers and 42% of casual workers - received below the National Floor-Level Minimum Wage (NFLMW) in 2012 and emphasised on establishing a well-designed and effective implementation mechanism to decrease wage inequality, especially at lower levels.

Also Read: Rebooting Economy XXX: Rural India in far deeper crisis than what govt data claims

What does the Wage Code Bill, 2019 and the Rules 2020 provide which will improve implementation and deter violations?

The Wage Code 2019 sets maximum penalty for not paying minimum wage at Rs 50,000 and for a repeat offender Rs 1 lakh and/or three months of imprisonment. But there is no minimum penalty, which means a penalty of any amount - Rs 10 or even Rs 1 - can be imposed and is thus discretionary.

The Parliamentary Standing Committee, which examined the Wage Code (the Wage Code of 2017 introduced earlier) and submitted its recommendation in December 2018, said that in the current context this provision "is not substantial enough to act as a deterrent". Hence, it proposed to raise maximum penalty to Rs 10 lakh. This was ignored.  

What is the mechanism to detect violations?  

The authority directly dealing with violations has been turned into "inspector-cum-facilitator" from "inspector" earlier, who would generate "web-based inspection" and call for information "electronically" (Section 51(2) of the code). The responsibilities of this authority have been expanded to include supply information and advice to both employers and workers to enable effective compliance.  

Then the draft Rules 2020 says the Chief Labour Commissioner (Central) shall formulate an "inspection scheme" with the approval of the central government.

Also Read: Economy XXIX: Exposing farmers to unregulated market is more likely to harm them

Taken together, inspection is restricted to web-based information and self-certifications by employer (calling for information "electronically"). Physical inspection is ruled out even when "inspection scheme" comes in because the main law (Wage Code 2019) stipulates only web-based and electronic information gathering (self-certification) and the scheme would have to be circumscribed accordingly.

The Parliamentary panel did object to the changing of "inspector" into "facilitator" pointing at its negative connotations and sought to retain "inspector" "in accordance with the ILO norms", which was ignored.

Wage Code 2019 leaves out millions of workers

The Wage Code Bill, 2019 is not universal, contrary to the central government's claims.

Here is how.

Section 50 of the Wage Code Bill, 2019 excludes establishments with 5 or less workers engaged for "agriculture and domestic purpose" from maintaining "register" or "wage clip".  

Excluding agricultural establishments with 5 or less workers alone would exclude 98.6% of all agricultural establishments in India, according to the Sixth Economic Census released in 2014 (the last and latest one). Since agricultural establishments account for 22.4% of the total establishments (or 13.13 million establishments), as per this census, excluding establishments with 5 or less workers would exclude 22% of the total or 12.94 million establishments out of the minimum wage coverage.

Also Read: Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

The number of workers in these establishments would run into many more millions.  

Add to it workers working for "domestic purpose". And also add gig workers, platform workers and home-based workers since the definition of "worker" in the code does not include them. (They are included in the Code for Social Security 2020.).

Then there are the MGNREGA workers who are specifically excluded in Section 66. They numbered 76.7 million to 85.2 million in the past five years, including FY21, as per the official website.  

A large number of Anganwadi workers and helpers, ASHA and ANM (auxiliary nurse) workers engaged under various Central government sponsored programmes are also out of the coverage since they are officially considered "honorary workers" and paid monthly "honorarium".

There are 14 lakh Anganwadi centres in India employing one or more Anganwadi workers (AWWs) and Anganwadi helpers (AWHs). The ASHA workers number 10.47 lakh.

Taken together, the total number of workers to be left out would be more than 100 million.

Wage Code takes working time beyond 8 hours

When it comes to working hours, the new system undermines 8-hour working day.

Also Read: Rebooting Economy XXVII: Fiscal mismanagement threatens India's economic recovery

The Wage Code Bill, 2019 is silent on the 8-hour work schedule.

The draft rules 2020 speak about 8-hour work schedule but provides "spread over" working time to 12 hours in Rule 6(2) in normal times, even while saying that a maximum of 1-hour rest can be given, taking the total hours of activity and attendance to 9 hours in day.

In case of "emergency", "preparatory" and "complementary", Rule 9 says the "spread over" time can go up to 16 hours, without explaining what these words mean but saying that "either physical activity or sustained attendance shall not exceed 9 hours in any day". Who will check since the physical inspection has been done away with?  

In a strange provision (or is it an error?), Rule 7(4) says "no wages for the rest day shall be payable" if the minimum rate of wage is worked out by dividing the minimum monthly rate of wages by 26 or the actual daily rate worked out by dividing the monthly rate by 26.  

This would mean no wage for Sundays, usually the weekly rest day, because Section 3(2) says the monthly rate will be fixed by multiplying daily wage with 26.

Uncertain wage revision  

The Wage Code Bill, 2019 says minimum wage will be fixed on the basis of skills, nature of job (hazardous, arduous etc.), temperature and humidity etc., but does not spell out how it will be linked to a minimum standard of living for the workers.

Also Read:Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

The draft rules 2020 does that, retaining existing provisions of 2,700 calories per day per adult, and other requirements like housing rent, education, health and other expenses for 3 adult units (as against 3.6 units the labour ministry's internal committee had recommended). But the requirement of 2,700 calories per day per adult is missing from "fixing floor wage" below which no minimum wage can be fixed.  

The minimum wage is to be revised "ordinarily at an interval not exceeding five years" - both in the Code and the Rules - unlike dearness allowance (DA), which the draft rules 2020 say would be computed twice every year, once before April and October 1.  

An ILO discussion paper of August 2020 says such discrepancies in revising minimum wage and DA have cost wage workers dearly for 72 years. States would just revise DAs and leave minimum wage alone for years. It gives the example of Delhi and Maharashtra governments which revised their basic wage rates after 22 and 9 years, respectively, but got away because by revising DA, the overall minimum wage is also revised which short-changes workers by denying them adequate compensations.

Just like the other three codes - Industrial Relations Code of 2020, Occupational Safety, Health and Working Conditions Code 2020 and Code on Social Security 2020 - the Code on Wages 2020 is disappointing in its design to achieve what it promises to.

Also Read: Rebooting Economy XXVI: Derailment of economy is not 'Act of God', it is 'Art of Misdirection'

Also Read: Rebooting Economy XXV: How a series of economic misadventures derailed India's growth story

Rebooting Economy 31: Will new labour codes protect more workers or less?

 New labour codes severely reduce workers' security by increasing key thresholds for applicability of most protections; contractual employment has been expanded to add to workers' precarity and social protections for unorganised workers are vague

Prasanna Mohanty | September 28, 2020 | Updated 22:58 IST

Seen in totality, the three new labour codes are heavily tilted in favour of businesses (employers)

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On September 17, 2020, the International Labour Organisation (ILO) released a report, "Financing gaps in social protection", stating that developing economies (India is one) would need to invest "additional" $1.2 trillion or equivalent to 3.8% of their GDP to close the annual financing gap in 2020 due to the COVID-19 crisis.

This financial gap, it said, is the result of (i) healthcare services and "income security for workers who have lost their jobs because of lockdown and other measures" and (ii) reduction of GDP caused by the crisis.

Instead of providing better protections to its workforce fighting the pandemic induced health, job and income crises, India has reduced them further in three labour reforms - The Industrial Relations (IR) Code 2020, The Code on Social Security (SS) 2020 and The Occupational Safety, Health and Working Conditions (OSHWC) Code 2020.

Also Read: Rebooting Economy XXX: Rural India in far deeper crisis than what govt data claims

Here is how.

OSHWC Code 2020 to protect less than 0.7% of factory workers

The OSHWC Code 2020 promises to protect and expand coverage of workers' health and safety both in organised and unorganised sector by amalgamating 13 central labour laws, but it does the unthinkable.

It changes the very definition of "factory".

The new code defines "factory" as a manufacturing unit where 20 or more workers are working with the aid of power and 40 or more without the aid of power. Earlier, these thresholds were 10 or more and 20 or more, respectively.

How many workers would get excluded from this step alone?

The Sixth Economic Census, the last of its kind published in 2014 (conducted during January 2013- April 2014), data shows: 97.9% of total workers in manufacturing units (Code 06 or factories) employing up to 1-9 workers (less than 10), 99% of workers in units employing 1-19 workers and99.3% workers in units employing 1-29 workers.

This census does not say how many workers work in manufacturing units (factories) employing up to 39 workers.

Thus, this code will provide health and safety protection to muchless than 0.7% of workersin manufacturing units (factories) as against 1.1% earlier. Manufacturing units are the ones where workers face greater risks to health and life.

When it comes to establishments (a place where any industry, trade, business, manufacturing or any other occupation is carried out, and includes "factory"), the limit remains 10 or more workers and will protect only 1.7% of workers.

Though this threshold will not be applicable to an establishment where "hazardous or life-threatening activity is being carried out", what constitutes hazardous and life threatening is left for the central government to notify later.

The OSHWC Code 2020 also has Clause 127 with two provisions that represent a potential threat to anything good.

Clause 127 (1) says: "The appropriate Government may, by notification and subject to such conditions and restrictions, if any, and for such period or periods as may be specified in the notification, direct thatall or any of the provisions of this Code or the rulesor the regulations made thereundershall not apply to or in relation to any establishment or class of establishments."

Clause 127(2) says: "Without prejudice to the generality of sub-section (1), where the State Government is satisfied in the public interest that it is necessary to create more economic activities and employment opportunities, it may, by notification, exempt, subject to such conditions as it may think fit,any new factory or class or description of new factories from all or any of the provisions of this code...".

Taken together, Clause 127 says the government can exclude protections to workers in any establishment or factory.

Several years in the making, the code does not even provide minimum health and safety standards.

Also Read: Economy XXIX: Exposing farmers to unregulated market is more likely to harm them

Protection from hire-and-fire reduced to 10% of working factories

The IR Code 2020 expands the scope of hire-and-fire power of employers.

This is facilitated through Clause 28 which says the "Standing Orders" shall apply to industrial establishments with 300 or more workers - from 100 or more workers hitherto applicable.

"Standing Orders" are a mandatory provision under the Industrial Employment (Standing Orders) Act of 1944, which requires employers to "define with sufficient precision the conditions of employment" (nature of employment like permanent, temporary or probationers; wages and hours of work; termination of employment and notice thereof, means of grievance redressal mechanism etc.) and "make the said conditions known to workmen".

The "Standing Orders" become critical to stop arbitrariness in hiring and firing workers because written contracts are not a legal requirement (except for fixed term employment incorporated in this code). The last Periodic Labour Force Survey (PLFS) of 2018-19 says that69.5% of regular wage/salaried employeesin the non-farm sector "hadno written job contract". Not to talk of other workers.

Increasing the threshold for "Standing Orders" would leave a greater number of workers vulnerable to exploitation. Labour economist Prof. KR Shyam Sundar of the Xaviar School of Management, Jamshedpur, uses the Annual Survey of Industries 2017-18 data to show that around 90% of working factories and 44% of their workers will be left completely outside the purviewof new "Standing Orders".

Further, Clause 77 of the code increases the threshold for lay-off and retrenchment from 100 or more workers to 300 or more workers in industrial establishments for which no prior government approval would be needed. This would further expand the scope for hire-and-fire to more industries.

The compensation to workers, however, remains the same: 15 days of average pay for every completed year of continuous service (Clause 70). Clause 83 adds a "re-skilling fund" to which the employer will pay equivalent to 15 days' wages of a retrenched employee, which will then be passed on to the retrenched worker within 45 days.

Ironically, the fund is meant for "training of retrenched workers" without any training scheme or plan in place or even source of money for it, since the employer's contribution will be paid to the retrenched worker. The only other source of money for this fund will be "the contribution from such other sources asmay be prescribedby the appropriate Government" in Clause 83(2b).

Also Read: Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

Big push for contractual work to raise precarity of workers

The new labour codes expand the scope of contractual work.

First, Clause 45 of the OSHWC Code 2020 (Special Provision for Contract Labour and Inter-State Migrant Workers Etc.) increases the threshold for health and safety protections to establishment having 50 or more contract workers- from 20 or more provided in the Contract Labour (Regulation and Abolition) Act of 1970 - leaving a larger number of workers vulnerable in the process.

Though a contract worker is prohibited in "core activity" (defined as "any activity for which the establishment is set up and includes any activity which is essential or necessary to such activity...") in this code, it excludes works of "perennial nature" such as sanitation works, watch and ward services prohibited under the Contract Labour (Regulation and Abolition) Act of 1970 (Section 10).

Second, Clause 57 provides enough flexibility to hire contract workers for "core activity" under different circumstances and its sub-clause 2 says the government retains the power to determine if "any activity of an establishment is a core activity or otherwise". Clause 47(2) allows "work-specific licence" to contractors to supply contract workers even when a contractor "does not fulfil the requisite qualifications or criteria".

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Third, the SS Code 2020 expands the number of contract workers by providing for "fixed-term employment", defined as "the engagement of an employee on the basis of a written contract of employment for a fixed period".

No contractor is needed to hire a "fixed-term" worker. The employer can do it directly. Such workers will get the benefits available to permanent workers but their work will be limited to the contract period and non-permanent in nature. Social security and other benefits will, thus, be restricted to their (written) contract period, which typically runs for 11 months in auto industries, for example.

What happens thereafter to workers' job or social security linked to it?

Fourth, the IR Code 2020 removes the distinction between "contractor" supplying contract workers and "employer" by including the former in the definition of the latter. And then, it does not even define "contractor". This is a license to "employer" to act as a "contractor" and hire workers on contract.

The other two codes also define "employer" to include "contractor". Labour experts say this will absolve "employer" from any violation of the labour codes, particularly relating to contract workers, except in the case of welfare facilities under the OSHWC Code 2020 which specifically mentions that "principal employer" will be liable for violations.

It is no secret that contractual employment increases the precarity of workers because it is not permanent and restricted to the period of contract after which they lose jobs automatically, if not renewed. They don't need to be given any advance notice, compensation or even be told the reason for non-renewal of their contracts. Good performance is no guarantee of renewal of contract.

Also Read:Rebooting Economy XXVIII: Is India poised for agriculture-led economic turnaround?

Prof. Sundar writes that even though an under-estimate, the share of contract labour in the organised factory sector increased from 13% in 1993-94 to 36% in 2016-17, as per the Annual Survey of Industries. No economy-wide contract labour data is available, even though it is widely prevalent across sectors, including in the government sector.

Dr. Ravi Srivastava, director of the Centre for Employment Studies, Institute for Human Development, says: "The pandemic has exposed and highlighted the precarity of Indian workforce and its implications not only for workers but the entire economy in terms of holding up demand. Instead of aligning the labour codes to reduce precarity and increase formalisation of workforce, the Indian government has chosen to do the reverse."

Dr. Srivastava avers that contract work has an adverse impact on long-term productivity and skill development in non-core areas for an employer.

Limited social protection for unorganised workers

Even though unorganised sector workers, like migrants, gig workers, self-employed, home-based and platform workers etc. find a place in the Code for Social Security 2020, the actual security cover remains vague, not universal in nature or a worker's right.

For example, all of the existing thresholds - in terms of workers in an establishment and their monthly incomes - for applicability of PF, ESI, gratuity and maternity benefits etc., remain intact, thereby severely limiting benefits, rather than expanding. Even for inter-state migrant workers (ISMWs), protections under the OSHWC Code 2020 are restricted to establishments employing 10 or more workers.

Also Read: Rebooting Economy XXVI: Derailment of economy is not 'Act of God', it is 'Art of Misdirection'

Given the fact that the labour codes have been introduced during the pandemic induced financial crisis when millions of workers have lost their jobs and income, there is no provision of "unemployment allowance".

For unorganised workers, the code (Clause 109) says the central and state governments "shall formulate and notify" welfare schemes for them. There is no concrete plan yet, no timeline or definitive funding architecture yet. Such provisions did exist in laws that are being amalgamated and replaced.

Seen in totality, the three new labour codes are heavily tilted in favour of businesses (employers), rather than workers, as it is being sold to them by the central government.

Also Read: Rebooting Economy XXV: How a series of economic misadventures derailed India's growth story