Labour Laws Perform a Redistributive Function. Diluting Them Has Serious Consequences. -Rashmi Venkatesan

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published Published on Oct 4, 2020   modified Modified on Oct 5, 2020

In a world that is already grappling with crippling inequalities, weak labour market institutions will only further cause economic divisions.

The three labour codes passed in the Lok Sabha last Tuesday are the latest in a long line of labour law reforms that have been enacted recently and will almost certainly be followed by more in the future. All these ‘reforms’ have one objective in mind – to dismantle labour rights and protections of the past, to make the labour market more ‘efficient’, or more accurately, flexible.

While this has predictably provoked criticism from trade unions and activists, supporters of the reform argue that India’s labour laws are remnants of an archaic past – ineffective for workers and unnecessarily burdensome on the employer – and therefore, are best dismantled. But for us to meaningfully engage with the debate on labour reforms, we ought to first ask – what do labour laws actually do, or what are they meant to do? What role do they play in an economy?

The first, and perhaps obvious, function of labour law is to protect workers from wage fluctuations, sub-standard or dangerous working conditions, and precarious and insecure employment. But why is this protection needed? Because without them workers and employers would enjoy unbridled ‘freedom of contract’ as simply buyers and sellers of labour. This by itself is not undesirable, provided parties are equally placed. But freedom of contract between two greatly unequal parties would mean that the stronger party could indiscriminately impose their will on the weaker one.

Please click here to read more., 4 October, 2020,

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