Labour Ministry seeks Cabinet approval for wage code Bill

The Labour Ministry has sought Cabinet’s approval for the wage code Bill that seeks to empower the Centre to fix a minimum wage applicable across all sectors in the entire country.

“We have already sent the wage code Bill for Cabinet approval. We will also send the Labour Code on Industrial Relations Bill in a week,” Labour Secretary Shankar Aggarwal said after a seminar on Labour Reforms. “We are trying to create a mechanism for minimum wage for all sectors in the country.”

At present, the Centre and states fix minimum wages for different categories of workers in various sectors under their respective jurisdictions.

Once it sees the light of day, the Wage Code will allow fixing a benchmark wage for workers, which will have to be adhered to by the states as well. This provision will ensure a minimum wage to workers across the country.

However, the states will be free to prescribe higher wages.

The Labour Ministry is likely to push the Code on Wages and Code on Industrial Relations in the Budget session of Parliament beginning next week.

Aggarwal said the ministry will finalise the Labour Code on Social Security and Welfare and the Labour Code on Safety and Working Conditions in a month.

Through labour reforms, the Centre intends to convert 44 labour laws into four labour codes — wages, industrial relations, social security and safety.

The ministry is pursuing labour reforms with a focus on increasing ease of doing business by providing flexibility to hire workers.

It’s a big challenge, according to Aggarwal, to create 10 million jobs every year, which can be a reality with changes in the labour laws.

“There are many rules and regulations which are stumbling blocks. We got to change labour laws created in 1926, 1936 and 1946. The government will play the role of an arbitrator,” he added.

Aggarwal also said retirement fund body EPFO and ESIC cover only 10 per cent of the workforce in the country and the government wants to provide quality (social security) products to all workers and people.

The ministry has also sent the Small Factories Bill for the Cabinet approval, which will exempt units with less than 40 workers from compliance of 14 labour laws.

These units will be able to buy health insurance and provident fund products from the open market.