Decriminalisation of labour penalties relieves employers

New Delhi: The implementation of the labour codes will relieve employers from the fear of imprisonment as the labour ministry has decriminalised all general penalty clauses under the four labour codes barring grievous cases while protecting the rights of the workers.

Further, imprisonment provisions under multiple sections of existing labour laws have been replaced with the compounding provisions, valid for three to five years, depending on the codes.

A senior government official told ET that implementation of the codes will significantly ease the woes of employers while enhancing their operational flexibility. "Labour being on the Concurrent List, decriminalisation of offences in central labour laws will automatically apply to areas falling within the jurisdiction of both state and central governments," the official added.

Money collected from composition of violations will be credited to the social security fund, which will be used for the welfare of the unorganised workers.

This, the ministry claims, will significantly bring down cases related to imprisonment of employers for violation of labour laws while enhancing the ease of operations for employers without any fear of penal action.

The four labour codes namely the Wage Code, the Code on Social Security, the Industrial Relations Code and the Occupational, Safety, Health and Working Conditions Code, are expected to be implemented soon as over 90% states have firmed up the rules across four codes.

The four codes have reduced the number of sections from 1,228 to 480. Of these, only 22 sections contain imprisonment as penalty for a first time offence and just four of them provide for imprisonment of one year.

Under the existing scenario, of the 1,536 laws that govern doing business in India, more than half carry imprisonment clauses. Moreover, of the 69,233 compliances that businesses have to follow, 37.8% or almost two out of every five carry imprisonment clauses, as per the recent report 'Jailed for Doing Business' by ORF and Teamlease.