India new labour codes: Unions ask for rollback after sweeping changes – BBC

Report on India’s New Labour Codes and Sustainable Development Goal Alignment

Introduction to the Labour Law Reforms

The Government of India has initiated the implementation of comprehensive economic reforms by consolidating 29 federal labour laws into four simplified codes. This legislative overhaul, approved by parliament in 2020, aims to modernize the regulatory framework governing industrial relations, social security, and occupational safety. The primary objectives are to enhance the ease of doing business and stimulate economic activity, directly impacting several Sustainable Development Goals (SDGs).

• Regulatory Simplification: The number of rules has been reduced from approximately 1,400 to 350.
• Reduced Compliance Burden: The number of mandatory forms for businesses has been cut from 180 to 73.
• Economic Context: The reforms are positioned as a strategy to attract Foreign Direct Investment (FDI) and integrate India into global value chains, contributing to sustained economic growth as outlined in SDG 8.

Analysis in the Context of SDG 8: Decent Work and Economic Growth

The new labour codes present a complex picture when evaluated against the targets of SDG 8, which promotes inclusive and sustainable economic growth, full and productive employment, and decent work for all.

Provisions Advancing Decent Work and Formalization

Several components of the new codes are designed to advance worker welfare and formalize India’s vast informal economy, aligning with SDG Target 8.3 (promote formalization) and Target 8.5 (achieve full and productive employment and decent work).

1. Uniform Minimum Wage: Establishes a consistent wage floor, aiming to reduce wage disparities and support SDG 10 (Reduced Inequalities).
2. Mandatory Appointment Letters: Formalizes employment relationships, providing workers with legal standing and clarity on their terms of employment.
3. Gender-Neutral Pay: Explicitly supports SDG 5 (Gender Equality) by mandating equal pay for work of equal value.
4. Expanded Social Security: For the first time, legal recognition and social security provisions are extended to gig and platform workers, addressing a growing segment of precarious employment.
5. Health and Safety: Provisions for free annual health check-ups for workers over 40 years of age contribute to SDG Target 8.8 (promote safe and secure working environments).

Contentious Clauses and Potential Risks to Labour Rights

Despite the positive aspects, trade unions and labour advocates express significant concern that certain clauses may undermine SDG Target 8.8, which focuses on protecting labour rights and promoting secure working environments.

• Increased Threshold for Layoffs: The threshold for requiring government permission for retrenchment has been raised from firms with 100 workers to 300. Critics argue this excludes a large portion of the workforce from crucial job security protections.
• Restrictions on Industrial Action: The requirement for workers in all sectors to provide a 14-day notice before a strike, previously applicable mainly to public utilities, is seen as a measure that weakens the collective bargaining power of workers, a fundamental labour right.

Implications for Broader Sustainable Development Goals

The impact of the labour reforms extends beyond SDG 8, influencing other critical development objectives.

• SDG 9 (Industry, Innovation and Infrastructure): Proponents argue that a more flexible labour market will encourage firms to establish larger-scale factories, boosting the manufacturing sector and fostering industrialization as per SDG Target 9.2.
• SDG 5 (Gender Equality): The provision for gender-neutral pay is a direct and positive step towards achieving economic equality for women.
• SDG 10 (Reduced Inequalities): The reforms have a dual potential. While formalizing the informal economy and establishing a minimum wage could reduce inequality, the perceived weakening of worker bargaining power could exacerbate the gap between capital and labour income.

Stakeholder Perspectives and Economic Debate

The reforms have elicited divergent responses from key stakeholders, reflecting a fundamental debate on the path to achieving sustainable economic growth.

• Business and Industry: The changes have been widely welcomed by companies, who view the previous laws as restrictive and a hindrance to manufacturing growth and competitiveness.
• Trade Unions: Unions have organized protests, describing the codes as an “aggressive abrogation of workers’ hard-won rights” and demanding their withdrawal.
• Economic Analysis: One school of thought posits that labour market flexibility is essential for attracting investment and creating employment opportunities. An opposing view holds that India’s primary economic challenge is inadequate consumer demand stemming from low wages, and weakening labour protections will not solve this core issue.

Conclusion and Forward Outlook

India’s new labour codes represent a significant attempt to modernize its economic framework. The success of this initiative, when measured against the Sustainable Development Goals, will depend on its ability to strike a delicate balance. While the simplification of complex laws was broadly considered necessary, the long-term impact on investment, job creation, and worker rights remains to be seen. The transition period will require careful management of compliance changes for organizations and continued dialogue to address the concerns raised by labour unions, ensuring that the pursuit of economic growth (SDG 8, SDG 9) does not compromise the commitment to decent work and protected labour rights (SDG 8.8).

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on India’s new labour codes addresses several Sustainable Development Goals (SDGs) by discussing economic reforms, workers’ rights, health provisions, gender equality, and institutional simplification. The following SDGs are relevant:

• SDG 3: Good Health and Well-being: The reforms include a provision for free annual health check-ups for workers over a certain age.
• SDG 5: Gender Equality: The introduction of “gender-neutral pay” is a key measure mentioned in the new codes.
• SDG 8: Decent Work and Economic Growth: This is the most central SDG, as the entire article revolves around labour laws, employment conditions, economic growth, and the rights of workers.
• SDG 9: Industry, Innovation, and Infrastructure: The reforms are explicitly aimed at boosting India’s manufacturing sector and encouraging the growth of larger factories.
• SDG 16: Peace, Justice, and Strong Institutions: The article discusses the simplification of complex laws to create more effective institutions and touches upon the challenges workers face in accessing justice through grievance mechanisms.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the details provided in the article, the following specific SDG targets can be identified:

1. Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services. The article mentions “free annual health check-ups for those over 40” as a new worker-friendly measure, which contributes to this target.
2. Target 5.1: End all forms of discrimination against all women and girls everywhere. The introduction of “gender-neutral pay” is a direct policy action aimed at eliminating gender-based wage discrimination in the workplace.
3. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation… and encourage the formalization and growth of micro-, small- and medium-sized enterprises. The article states the reforms aim to “ease doing business,” “attract more FDI,” and “help formalise India’s vast informal economy.”
4. Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men… and equal pay for work of equal value. The provision for “uniform minimum wages” and “gender-neutral pay” directly aligns with this target.
5. Target 8.8: Protect labour rights and promote safe and secure working environments for all workers. This target is central to the conflict described in the article. While the government claims the codes “protect workers’ rights,” trade unions argue they are an “abrogation of workers’ hard-won rights” by making it harder to strike and easier for companies to fire workers.
6. Target 9.2: Promote inclusive and sustainable industrialization. The article highlights that a key goal of the reforms is to counter the “atrophy in India’s manufacturing sector” and “encourage firms to build larger scale factories.”
7. Target 16.3: Promote the rule of law… and ensure equal access to justice for all. The article implies a challenge to this target by noting that “Pending grievance cases for labourers are already in millions” and “workers are not able to lodge their complaints.”
8. Target 16.6: Develop effective, accountable and transparent institutions at all levels. The reform’s primary action of “compressing 29 federal laws that regulated labour into four simplified codes” is a direct effort to make the regulatory institutions more effective and less complex.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article mentions or implies several quantitative and qualitative indicators that can be used to measure progress:

1. Indicator for Target 3.8: The “free annual health check-ups for those over 40” can be measured by the proportion of the eligible workforce receiving this service, which relates to Indicator 3.8.1 (Coverage of essential health services).
2. Indicator for Target 8.5: The implementation of “gender-neutral pay” implies the need to measure the gender pay gap, which is related to Indicator 8.5.1 (Average hourly earnings of female and male employees).
3. Indicator for Target 8.8: The new rule requiring a “14-day notice before going on strike” is a direct change to legislation governing collective bargaining. This can be assessed under Indicator 8.8.2 (Level of national compliance with labour rights), which tracks freedom of association and the right to collective bargaining.
4. Indicator for Target 9.2: The success of the reforms in boosting manufacturing can be measured by an increase in the sector’s contribution to the economy and employment, aligning with Indicator 9.2.1 (Manufacturing value added as a proportion of GDP) and 9.2.2 (Manufacturing employment as a proportion of total employment).
5. Indicator for Target 16.3: The article mentions that “Pending grievance cases for labourers are already in millions.” The number of pending and newly filed grievance cases serves as a direct indicator of workers’ access to justice.
6. Indicator for Target 16.6: The article provides concrete numbers for institutional simplification: the number of labour laws was compressed from 29 to 4, rules were reduced “from a staggering 1,400 to around 350,” and required forms were cut “from 180 to 73.” These numbers are direct indicators of reduced regulatory burden.

4. Summary Table of SDGs, Targets, and Indicators

Source: bbc.com