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February 10, 2021

Employees to have an option to work for four days a week

by CA Shivam Jaiswal in Compliance Law, Corporate Law

Employees to have an option to work for four days a week

For the past 10-11 months the COVID 19 pandemic had forced India into a lockdown. Most of the countries small businesses which relied on physical availability of customers have had the most hit. Small business revenues have plunged everywhere. The Government revenue has dropped significantly too. Now as the vaccine is being circulated across the nation, the country is slowly returning to its original state. The new labour codes being finalised by the government will soon offer companies the flexibility to choose a shorter four-day work week, albeit with longer shifts.

What would be implemented in the new labour code?

  • The Centre will offer companies the flexibility to choose four-day work week with a ceiling of 48 hours in a week in the final rules that would be notified soon.
  • Individual companies would be allowed to tweak daily work hours, with the consent of their employees, from 8 to 12 hours in a day, as long as the upper limit of 48 hours is not breached.
  • Employers will have to ensure that if they choose a four-day workweek, there has to be three-day paid leaves.
  • There would be flexibility for employers to give a four, five or six-day week. There has to be unanimity between employers and employees over a four-day week, it cannot be thrust on employees. 

What prompted this move?

The move has been prompted following concerns raised over the Centre’s proposal to increase the spread over hours to 12 under the Code on Occupational Safety. At present, employers have to take consent of the government to cut the number of workdays in a week which has been fixed at 48 hours for a workweek of six days and eight hours of work each day.

Comments by Labour Secretary

  • Labour Secretary Apurva Chandra said that unions would oppose the move only if companies did not allow employees a three-day consecutive leave.
  • Notably, the Centre had passed four labour codes in Parliament in September 2020, following draft rules formulated in December.
  • The government received comments concerning these rules in January.
  • Chandra said that the ministry was giving final touches to the labour rules and that states are also coming with the draft of their own rules.
  • Though India Inc had hailed the newly-enacted three labour codes, claiming it will spur much-needed investment and create more jobs in the country, some believe the law is tilted in favour of employers.

What would be the effect of the new labour law?

  • The labour law reforms make hiring and firing easy for companies.
  • It makes it difficult for unions to go on strike without prior 60-day notice. It will make the future uncertain for employees.
  • This may also lead to a day’s work converting into two shifts instead of three and reduce employment opportunities.
  • However, many employees are likely to be thrilled with the possibility of spending extra time on leisure activities and recover effectively from their weekly pressures.
  • It shall also benefit a new generation of workers who value ‘me time’ and would prefer working long hours for fewer days to get an extra off.
  • Companies can also benefit from lower office rental costs and more energized and productive staff.
  • It will benefit sectors such as information technology and shared services.
  • In the banking and financial services industry, 20-30% people can use the long working hours template for four or five days and enjoy a longer break.
  • Profiles like human resources and finance verticals can easily adopt such a practice faster.
  • Foreign firms will be the first to adopt it as this will reduce their real estate expenditure at one end and improve productivity of workers on the other

Government is likely to complete the process of finalising rules under the four labour codes soon. Once the new rules are implemented, companies will no longer be required to take government nod to move to a four-or a five-day working week if the employees give the green signal to the arrangement.

Further, the government is also likely to set up the web portal for registration of unorganised sector, including gig and platform workers and migrant workers by June 2021. Also, the Centre will allow employers to avail Employees’ State Insurance Corporation (ESIC) facilities for an annual check-up of its employees who are ESIC beneficiaries instead of paying from their pocket. The final rules will clarify this.

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