Context:
Government to launch Labour Welfare and Employment Index (LWEI).
More on the News:
- This LWEI aims to establish a comprehensive ranking system for Indian states and union territories (UTs) based on key parameters such as employment, labour welfare, social security coverage, and productivity.
Key Features and Objectives of the LWEI
Ranking Framewor3k: The LWEI will likely consider a range of indicators, potentially including employment rate, social security coverage (health insurance, pensions etc.), minimum wage compliance, working conditions, and industrial disputes.
- By evaluating these parameters, the LWEI will rank states and UTs, fostering “healthy competition” and encouraging improvements in areas with inadequate labour law implementation.
Benefits and Expected Outcomes:
- Enhanced Policymaking: The LWEI’s rankings are expected to incentivize states to adopt and implement more consistent employment policies, particularly beneficial for businesses operating across multiple states.
- Improved Transparency: The index can enhance transparency in labour law implementation and promote uniformity across states, simplifying compliance for businesses.
- Strengthened Labour Welfare: By identifying areas needing improvement, the LWEI can encourage states to prioritize worker well-being and social security provisions.
Implementation and Challenges:
The Ministry of Labour and Employment is expected to launch the LWEI in the coming weeks, following consultations with stakeholders like state governments, NITI Aayog, and the International Labour Organisation (ILO). However, challenges may arise during implementation, such as:
- Data Discrepancies: Ensuring consistent and reliable data collection across diverse states is crucial for the LWEI’s effectiveness.
- State Resistance: States with less favourable labour practices might resist implementing reforms or improving their ranking.
Comparison with Labour Rights Index
- This LWEI index is similar to the Labour Rights Index by Wage Indicator, an international tool for evaluating labour legislation across 135 countries and assigns them scores based on ten indicators derived from the UN’s Decent Work Agenda.
- These indicators cover aspects like fair wages, working hours, safety, and social security.
- The LWEI’s primary focus is on ranking Indian states within the domestic context, aiming to drive domestic improvements in labour welfare and employment practices.
About the Labour Code
- The labour codes are a set of four codes that aim to simplify and streamline a large number of existing labour laws.
Four codes replacing 29 central labour laws:
- The Code on Wages, 2019
- The Occupational Safety, Health and Working Conditions Code, 2020
- The Code on Social Security, 2020
- The Industrial Relations Code, 2020
What they aim to do:
- Simplify compliance for businesses
- Improve ease of doing business
- Strengthen social security provisions for workers
- Ensure minimum wages and timely payment
- Enhance occupational safety
Current Status of Labour Code Implementation
- Currently, 24 states and union territories have established rules under all four labour codes.
- However, West Bengal, Meghalaya, Nagaland, Lakshadweep, and Dadra & Nagar Haveli have yet to formulate rules under any of the codes, according to a recent study by the government’s VV Giri National Labour Institute.