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The New Normal : Work from home and the changing dynamics of labour laws

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Sitting on a couch, a cup of tea/coffee beside your laptop placed on a neat/messy table, constant yelling from the family members, your cell phone vibrating with various messages and calls, a shirt and tie for the upper body and boxers/pyjamas/track pants making a debut for meeting.

The above mentioned paragraph, which used to be a utopian version a year ago has been now transformed into a reality for a majority of working professionals from the outbreak of COVID-19. Not just the working professionals, but just a few minor modifications and this is the lifestyle of the present-day students as well!

However, we shall focus ourselves just with the working professionals and via this article, we will understand and analyze the concept of WFH (Work From Home) and its relationship with the economy of the nation, be it the positives and the negatives coupled with the dynamics of the labour laws prevailing in the nation.

If we look at the history of WFH, this particular concept was found in medieval history, where the traders and the merchants used to build their houses in such a fashion that the house opened up to the shop and when you go inside, the house where the merchant/trader resides could be found easily. These types of houses were termed as ‘longhouses’. This particular thing witnessed a huge spike in number when the industrial revolution was at its peak and the nations were shifting their dependence from manual labour to machines. At this point of time, it was observed that people from different professions carried out their work from the place where they used to reside, right from a trader to their tenant. Travelling a bit further in time, we will observe that in the late 1970s, Jack Niles, a scientist at NASA coined the term ‘telecommuting’ which essentially means the practice of working from home, making use of the internet, email, and the telephone or Work From Home in modern day language. Also, in a book authored by Jack Niles, the purpose of ‘telecommuting’ or ‘WFH’ was to be practiced in order to avoid traffic on the roads. In a very similar fashion, when the oil crisis hit the world, Frank Schiff coined a new term, ‘flexplace’ in an article that he had submitted to The Washington Post which very much resonated with that coined by Jack Niles. However, the objective for the coining of this word changed with Schiff. The reason why Schiff wanted the citizens of his nation to stay at home was not in order to avoid getting stuck in traffic, but to save on gasoline/petrol. This was emphasised in order to save the excessive consumption of gasoline/petrol by the citizens.

Much to the surprise of the people, this very concept co-existed with the human beings around the world in a very discreet manner. Ignored yet followed by the human race, by various traders, merchants and entrepreneurs around the world, especially in India.

As we have now mentioned India, it is important to understand how this particular concept erupted like a volcano and then spread to the schools, companies and other institutions. To start off with, it was said that the spreading of COVID-19 won’t last much long and would get over within a month or two. However, the virus had another story to tell. With the increase in the number of the cases round the nation, a series of lockdowns were imposed in the nation and everything, including the working of these companies and the economy came to a halt. As a result, work stopped as well and the companies with each passing month started experiencing more loss and less profits because of the stringent measures imposed by the government for not visiting the workplace. Soon enough, a way was found in order to garner the lost profits back and then the companies started assigning work to its employees while they sit back at home as an experiment. Soon enough, people started to complete their work right from their home and applications like Zoom, Google Meets, Discord, WebEx, Microsoft Teams became a crucial part of the lives of many. Employees soon started their work from their leisure place and soon homes turned into a workplace for many.

Despite noticing a substantial growth in the profits of various companies, the concept of WFH is comparatively new to the Indians. Hence, the companies are trying their best to make their employees more and more comfortable and adaptable to this environment. The reason why the companies are pursuing this is because of the fact that they have to keep their growth intact and have to keep working on reducing the increasing stress levels of their employees which continue to grow due to the increased workload and the daily routine of their household.

In an interview given to Times Now News, the owner of two major business giants said:

“Employees are welcoming the flexibility as “collaborative meetings are a lot more democratic.” He also says, “Employees are able to incrementally innovate multiple elements and levers of productivity is present.”

Rajesh Gopinathan, CEO and MD, TCS

“In addition to encouraging our employees to work from home, we have also deferred all our internal events which require large gatherings and encouraged everyone to leverage technologies like – Tele-Presence and Video Conferencing adequately.

CP Gurnani, MD and CEO, Tech Mahindra

If we look at the comparison between the statements issued by the owners of these two business giants, we will notice that a clear promotion of Work From Home has been made with the intent of these supremos to make necessary changes to make it more and more comfortable.

However, as the famous english proverb goes, “every coin has two sides”. The very same thing is applicable here as well. Not just restricting this article about the IT sector, while the business houses around the world, be it small business houses or the big business houses, both the types faced the aftershocks of the loss of business. In order to cover for this, a common practice followed was to lay-off the employees, be it labourers or the IT professionals or teachers or any other working professional. According to the estimates, approximately 10.8 million jobs have been lost due to the outbreak of COVID-19. Much to the surprise of the readers, in the list of the worst-hit sectors, the IT sector takes the 6th position. Whereas, the other sectors include: travel and tourism sector, hospitality sector, aviation sector automobile sector and the retail sector. The above mentioned sectors are termed as the worst-hit because of their interdependence on their customers physically. This led to the closure of various restaurants, tours and travel offices, showrooms and so on. The revival of these sectors has been selective with the automobile sector and the retail sector taking a spike in their profits due to the festival season and the Indian mindset to invest during the festival season. As far as the recovery of the other sectors is concerned, it has been speculated that they can be revived only when the lockdown has been removed completely or the vaccine shots are available for the citizens of the nation. Also, it won’t be wrong to say that if the recovery measures do not start with the time, then there are chances that some business might not see the light of the day.

It is not just the working professionals or the business professionals whose businesses have been disrupted, but it is also the labourers who have been laid-off and have been migrated back to their hometown from their place of work on a mass scale. Nevertheless, we won’t enter into the political battle arena to determine whether the migration was done properly or poorly. Rather, we would now focus on the changes that were brought to the labour laws in order to attract the investment and provide for job opportunities to the unemployed.

On the day of 22nd September, 2020, the Lok Sabha passed three new versions of labour codes which includes:

  1. Industrial Relations Code Bill, 2020.
  2. Code on Social Security Bill, 2020.
  3. Occupational Safety, Health and working Conditions Code Bill, 2020.

The common change faced by the labour code introduced in 2019 and the labour code passed by the Lok Sabha in 2020 (the three labour codes mentioned above) includes the central government being the appropriate government for the Central Public Sector Undertakings (PSUs) which even includes those central PSUs where the holding of the central government is less than 50%. Secondly, the 2019 labour codes provided for the control of the central government in certain industries which includes railways, mining, telecommunication and banking. However, the Labour Codes of 2020 has widened the scope of the control of the central government by giving full power of the “controlled industry” and making the central government the appropriate government for the same. The definition of  “controlled industry” as per the Bills on Occupational Safety and Industrial Relations goes, as an industry on which the control of the Union has been declared by any Central Act in public interest.

Thirdly, the new labour codes have changed the system of settling (compounding) of the Industrial disputes as such.

The 2019 Bills allowed for compounding (settling) of offences which were not punishable with imprisonment, or with imprisonment and fine, subject to certain conditions.  Compounding was allowed for a sum of 50% of the maximum fine provided for the offence.  The 2020 Bills on Industrial Relations and Social Security state that the offences punishable with imprisonment up to one year or with fine will be compoundable.   For offences with fine, compounding is allowed for a sum of 50% of the maximum fine provided for the offence.   For offences with imprisonment, compounding is allowed for a sum of 75%.  In the Bill on Occupational Safety, 50% may be compounded where a ‘penalty’ is levied (e.g., for non-maintenance of registers) and 75% for ‘offences’ (e.g., for falsification of records).[1]

While such changes have been made to the Labour Codes, the contentions of the people stand with the Industrial Relations Code Bill, 2020. Before understanding the contentions, let us look into the highlights of the bill:

Exemption

  • The appropriate government may exempt any new industrial establishment or class of establishments from the provisions of the Code in public interest.

Standing Orders

  • Applicability of standing orders: The 2019 Bill provided that all industrial establishments with 100 workers or more must prepare standing orders on the matters listed in a Schedule to the Code.  These matters relate to: (i) classification of workers, (ii) manner of informing workers about work hours, holidays, paydays, and wage rates, (iii) termination of employment, and (iv) grievance redressal mechanisms for workers.  The 2020 Bill provides that this will apply to establishments with at least 300 workers.
     
  • Powers to the central government to revise the threshold: The 2019 Bill provided that the central government may make the provisions related to standing orders applicable to establishments with less than 100 workers through a notification.   The 2020 Bill removes this provision.  
     
  • Change in employee strength: The 2019 Bill provided that once an establishment is covered under the provisions related to standing orders, these provisions will continue to apply even if its employee strength reduces below the threshold (100 workers) at any time thereafter.   The 2020 Bill removes this requirement.

Closure, lay-off and retrenchment

  • Prior permission of the government: Under the 2019 Bill, an establishment having at least 100 workers was required to seek prior permission of the government before closure, lay-off, or retrenchment.  Lay-off refers to an employer’s inability to continue giving employment to a worker in the face of adverse business conditions.  Retrenchment refers to the termination of service of a worker for any reason other than disciplinary action.  The 2020 Bill provides that prior permission will be required for establishments with at least 300 workers.
     
  • Powers to the central government to revise the threshold: The 2019 Bill empowered the government to increase or decrease the threshold for the establishments to seek prior permission before closure, lay-off or retrenchment.  The 2020 Bill only allows an increase in the threshold through notification.

Negotiating Union and Council

  • Sole Negotiating Union: Under the 2019 Bill, if there were more than one registered trade union of workers functioning in an establishment, the trade union having more than 75% of the workers as members would be recognised as the sole negotiating union.  The 2020 Bill lowers this threshold to 51% of workers.
     
  • Negotiation Council: In case no trade union is eligible as sole negotiating union, the 2019 Bill provided that a negotiating council will be formed consisting of representatives of unions that have at least 10% of the workers as members.  The 2020 Bill raises this threshold to 20%.

New provision under the Bill

  • ■       Disputes relating to termination of individual worker:   The 2020 Bill classifies any dispute in relation to discharge, dismissal, retrenchment, or otherwise termination of the services of an individual worker to be an industrial dispute.  The worker may apply to the Industrial Tribunal for adjudication of the dispute.  The worker may apply to the Tribunal 45 days after the application for the conciliation of the dispute was made.[2]

The contentions arose with respect to the clause which mentions the standing order. This very standing order provides for an increase in the threshold of the workers relating to layoffs and retrenchment in industrial establishments having 300 workers from 100 workers or more at present which aims at giving more power to the individuals to adopt the policy of  ‘hire and fire’ policy without the intervention of the government.

To quote XLRI professor and labour economist KR Shyam Sundar from an article of Indian express:

“The increase in the threshold for standing orders from the existing 100 to 300 is uncalled for and shows the government is very keen to give tremendous amounts of flexibility to the employers in terms of hiring and firing…dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers. This is complete demolition of employment security,”

 This essentially means that the right of the worker(s) stands diluted when it comes to their protest against their employer due to the absence of the intervention from the government for the business which has less than 300 labourers as their employees.

The other contention lies with the Right to Protest granted to the labourers. The labour code has now introduced the provision of  “the time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present”. This essentially means a 60-day notice and during the pendency of proceedings before a Tribunal or a National Industrial Tribunal and sixty days after the conclusion of such proceedings by the person who does not work in any kind of industrial establishment for protesting.

Hence, these contentions are the ones that the people have been arguing about. The readers should also note the fact that the changes that have been made in order to attract more and more investment to increase the profits. Not just this, but the nation also witnessed the relaxation of labour laws by various Indian states in order to generate revenue and garner profits to keep the economy of the state and the nation running. 

To conclude with the article, if we draw a comparative analysis of the Work From Home people and the changes in labour laws, we would find ourselves in front of two constants:

  1. Change is in the very nature of nature and is inevitable.
  2. The human race adapts to the changes and learns to live with the said changes.

We can, by the above said information realise that the new black is not just Work From Home, but also the changing dynamics of the labour laws in the nation.

However, one important question which troubles the mind,

This change is coming through the land of the Indian subcontinent, but would this change last long or perish under the folds of changing time?


Abeer Tiwari – Writer Bharat Bhagya Vidhata

Reference -:

[1] Ministry of Labour and Employment

[2] PRS Legislative Research, the code on Social Security 2020

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