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Policy & Politics

Kerala watches political battles with a sense of déjà vu

Vinod Mathew

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They say politics is about swings and roundabouts. They also say what goes around, comes around. Both sayings hold good for what is happening in the Kerala political spectrum these days.  In the run-up to the 2016 Assembly elections, the last Left front had gone all out with a barrage of corruption allegations against the UDF government, leading the charge with a slew of controversial decisions taken by the UDF government, for which they coined a term from rubber cultivation. It was “kadum vettu” or slaughter tapping, the objective being harvesting as much latex as possible with least concern for the longevity of the rubber tree. An apt paradigm, as this mode of tapping is taken up when the time has come for replantation.

The UDF, led by Opposition leader Ramesh Chennithala, did not quite have to wait for the slaughter tapping period or the last year of its governance to mount counter attacks against the LDF. The Opposition leader in particular has been leading his typical brand of crusade against a series of misguided decisions by the CPM-led government. Though Chief Minister Pinarayi Vijayan has made a point to ridicule Chennithala and get applause from his fans by dismissing outright allegations, a closer look reveals remedial measures being taken as well.  

 The recent personal attack on Chennithala by CPI (M) state secretary Kodiyeri Balakrishnan immediately after a party state secretariat meeting late last month suggests worry lines have emerged in the party about its government’s image taking a beating. He said Chennithala wears the RSS hat and that he was the RSS sarsanghchalak in Congress. Following media reports about CPI(M) politburo member S Ramachandran Pillai’s dalliance with the RSS during his high school days, SRP came out with the clarification that he was indeed with the RSS till he was 15 years old but became a Communist party member when he turned 18. Chennithala’s response was that his four decades in public life was an open book and he did not require a certificate from the CPI(M) secretary regarding his DNA.

 It is yet another matter that any RSS link is still seen as a political liability in Kerala at a time when the BJP has a near-total sway over most of the country. Yet, both UDF and LDF trade charges against each other for maintaining a secret electoral alliance with the BJP. Even as the state political architecture continues to be governed by these boundaries, there seems to be no dearth of scams that keep popping with predictable frequency.

 Therefore, it was with a clear plan that Chennithala began picking on the LDF government’s misdemeanours, one after the other. While it has always been the chief minister’s position that these salvos from the Opposition were of no consequence, that is getting to be a zero sum game as the corrective measures being taken are getting noticed by the public. So much so that even staunch Left supporters are finding it difficult to turn a blind eye to these setbacks. Result: Pinarayi Vijayan is finding it increasingly difficult to dismiss allegations raised against his government by the Opposition leader.

The most recent issue raised by the Opposition leader is the unilateral manner in which the Chief Minister has granted special favours to PwC allowing to set up a backdoor office in the state secretariat, based on the recommendation of the State Transport Secretary. Chennithala kept volleying questions at CM, pressuring him to come clean on why the state government was sold on having PwC Private Ltd as a smokescreen and sign up Hess AG Switzerland as technology partner with a majority stake to build electric buses jointly with Kerala Automobiles Ltd.  

It was a meeting chaired by the Chief Secretary on February 17, with five PwC representatives in attendance against three from the state government and two from Hess, apart from a Swiss national of Kerala origin who brought together the potential partners to the negotiating table that gave an inkling on what was being planned.  

 Excerpts from the minutes of the meeting:

The project envisages the exports of electric buses/ cars to Australia and other overseas destinations through Cochin and Vizhinjam ports, thus making Kerala an electric vehicle hub.

After detailed deliberations, and presentations, the meeting directed the PriceWaterHouseCoopers (PwC) to submit the Detailed Project Report (DPR) by the end of March 2020. In the meantime, Kerala Automobiles Ltd. (KAL) can import chassis and start homologation works for approval of Automotive Research Association Of India (ARAI) to avoid delay. It was also proposed to sign MoU by the end of April 2020 after following all the required formalities.

 Following the ruckus raised by the Opposition, the state government said it had discontinued the services of PwC from the E-mobility project on July 18. But no such decision has been taken on Hess.  

“The cost that the state exchequer, struggling each month to pay it salaries and pensions, is phenomenal, as the CM keeps bringing in one international consultancy after the other. The `back-door’ office of PwC is being run by four `specialists’ and each one of them is being given a monthly remuneration in excess of Rs 3 lakh per month, more than what the Chief Secretary of the state is paid. All this cost is being borne to sanctify the entry of the Swiss electric vehicle manufacturer without a global tendering. It is clear there has been an underhand deal, giving rise to natural questions regarding kickbacks in the Rs 4,500-crore deal for 3,000 buses. Pinarayi Vijayan cannot keep saying I should not raise such corruption charges during the Covid-19 pandemic,” says Chennithala.

Chennithala has also been leveraging charges regarding the absence of transparency and propriety in the PwC-Hess deal to keep raising the lack of veracity and logic behind the LDF signing a two-year, Rs 8 crore consultancy deal in the second half of 2020 with KPMG for Rebuild Kerala, a project envisaged almost two years ago after the first floods ravaged the state in August 2018. It was first claimed KPMG was rendering its services free of charge but somehow all that changed and the CM had no qualms about hiring the MNC at a hefty fee when the LDF government had less than a year to complete its term.

Chennithala has also been voluble in non-stop demand for the resignation of Vijayan, right from the days he caught the government between a rock and a hard place on the unauthorised transfer of personal health data of thousands of unsuspecting citizens of the state to the New York-based data analytics company Sprinklr, with Keralite Ragy Thomas, its founder and CEO.

The state government defended the decision to rope in Sprinklr when a specific study on Kerala by John Hopkins University, Princeton University painted a scary picture of 80 lakh Covid-19 infections in April and data needed to be generated. But the Centre was severely critical of the state government, citing breach of the citizen’s basic right to privacy. It was a huge win for Chennithala as the issue also began shedding light on many such forays by the state IT department and IT secretary M Sivasankar.

 Later, when Sivasankar get embroiled in the gold smuggling case due to his difficult-to-explain links primarily with second accused Swapna Prabha Suresh and by extension with first accused Sarith P S and fourth accused Sandeep Nair, it gave credence to Chennitala’s allegations about the CM going out of the way to protect the proactive role played his principal private secretary in the Sprinklr issue.

 Chennithala says the Pinarayi government is aiming to execute its version of slaughter tapping with the Dream Kerala project, pegged to be LDF›s development plank for the 2021 Assembly elections. One sure fire candidate would be the Rs 63,941-crore Silverline project connecting Thiruvananthapuram and Kasargod with a 532-km high speed rail corridor. Yet another one likely to be featured alongside would be the Rs 1,548-crore K-FON (Kerala fibre optic network) project. This is apart from the controversial E-mobility project that plans to manufacture 3,000 electric buses for the state transport at a cost of Rs 4,500 crore with Hess AG as majority partner. And Chennithala has started picking holes in each one.

Consider some of the controversies flagged by Chennithala, which have got the LDF government backtracking:

October 2018: The LDF government, facing heat from Chennithala-led opposition or its decision to issue licences to private companies to set up distilleries and breweries in Kannur, Palakkad and Ernakulam, calls off the plan.

November, 2019: College students Alan Shuhaib and Thaha Fasal were booked under UAPA by Kerala police for alleged Maoist links. Following persistent criticism by the Opposition, spearheaded by Chennithala, the CM in February 2020 requested MHA to refer back the case from NIA to Kerala police. In retrospect, the state police had better things to do like tracking terror links flourishing on huge volumes of contraband gold smuggled in most of 2019 and early part of 2020.

June 2020:  People of the state were jolted out of their April-May lockdown inactivity with astronomical electricity bills from the state utility. The CM initially chose to ignore the public outcry justifying the bill. Once the Opposition started raising the decibel level about a cashless government looting the public, it was forced to climb down on June 18, the CM said up to said up to 50 per cent of the additional charge would be underwritten.

It is in this backdrop, the persistent line of questioning by Chennithala gains credibility, going beyond Vijayan’s initially successful strategy of belittling and thus diminishing the gravitas of issues raised by labelling him politically naive and harbouring ambitions of grabbing the chief minister’s chair.  It is this game plan belittling the persona of the one bearing news that is backfiring now, almost like a jammed gun with the used shell not ejecting properly.

All this would not have been a walk in the park as there have always been many voices trying to drown out each other from the Congress camp.

Evidently, Pinarayi Vijayan was trying to leverage this inherent party weakness while brushing aside the Opposition leader›s charges in the early days. Clearly, Chennithala has been mindful of this all along.

 In sum, there could not have been a more ill-advised move than the attack mounted by CPI(M) state secretary against Chennithala. Not only did it boomerang, forcing senior politburo member SRP to clarify his foray into the RSS before seeing light, in this case red, it gave the Opposition a moral victory. Because, the message that came across loud and clear was that Chennithala had managed to rattle the comrades with his dogged single-mindedness. And that is almost as bad as showing your hand to the opponent a game of poker.

Vinod Mathew is a senior journalist based in Kochi.

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Policy & Politics

The good, the bad and the googly: The curious case of the Air India data breach

SITA is a multinational information technology company based in Geneva, Switzerland, which has been furnishing IT & Telecommunication services to the air travel industry since 2016. SITA released a statement intimating the airlines it has partnered with, in March, 2021, that it has been affected by a cybersecurity attack to its system due to which customer-data has been leaked.

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The Good, the Bad and the Googly: The Curious Case of the Air India Data Breach

An indispensable virtue for humankind – personal data and privacy, unfortunately, wanders for sale in the dark web; with a substantial increase in data leaks over the recent years having become a central cause of concern for all and sundry. The equilibrium of data protection & technological advancement is in a disarray, attributable to the significant rise in the misuse of users’ information and the wildfire-like upsurge of incidents of data breach which have no plausible explanation to them.

All things considered, in light of the rampant instances of data breach doing rounds in the news, the issue of the Air India- Data Breach has posed an out-of-ordinary question of paramount consequence – legally, can a mechanism for monetary compensation exist for instances of data- infringement?

WHAT REALLY TRANSPIRED IN THE AIR INDIA DATA BREACH?

SITA is a multinational information technology company based in Geneva, Switzerland which has been furnishing IT & Telecommunication services to the air travel industry since 2016. SITA released a statement intimating the airlines it has partnered with, in March, 2021, that it has been affected by a cybersecurity attack to its system due to which customer-data has been leaked. Some of the notable airline companies which were compromised included behemoths like Lufthansa, British Airways, Finnair, and American Airlines, who individually issued statements to inform their customers of the breach in March itself. SITA, however declined to make a comment on the incident to the larger public and merely stated that it, “acted swiftly and initiated targeted containment measures. The matter remains under continued investigation by SITA with the support of leading external experts in cyber-security.”

Interestingly, a few months later in May, 2021, Air India (“AI”) released a statement revealing that it was one of the compromised airline companies due to the cybersecurity attack on the SITA Passenger Service System (“SITA PSS”), and that there was a data-breach wherein personal data of its customers for the period of 26thAugust 2011 to 20th February 2021 was infringed upon. The cybersecurity attack lasted for 22 days, affecting the personal data of 4.5 million passengers, wherein the data breached included their name, passport information, frequent flyer details, and credit card information – but did not affect passwords including CVV/ CVC info. The lax inaction of Air India is questionable, looking at the magnitude of the attack and the impact on data privacy & security concerns. Dubious also was the defence put forth – AI shielded itself by claiming they made an announcement regarding the attack on their website on 19th March, 2021, but it seems like their announcement did not reach the doorstep of the consumers, leaving them confused, enraged, and with an impending feeling of vulnerability.

WITH EVERY ACTION, THERE IS A CONSEQUENT REACTION: THE CLAIM AGAINST THE BREACH

Ensuing the delayed appraisal of the attack, the AI management was sent a notice, by one of the aggreived customers (a journalist from Delhi), seeking damages of Rs 30 lakhs. In the notice, the airline has been accused of “knowingly, intentionally and deliberately leaking the personal data and for breach of sensitive information” of its customers. A reference was made in the notice to the famous case of K.S Puttaswamy v/s Union of India, in which the right to privacy was held to be a fundamental right under Article 21, subject to reasonable restrictions. As per the unanimous understanding of the nine-judge bench in the Puttaswamy judgement, the right to privacy includes one’s autonomy over his/her personal decisions, bodily integrity, and very importantly – a right to protection of one’s personal information.

The notice as sent to AI expressly mentions that as a corollary of the cyberattack, there has been a loss of autonomy over personal data and hence the journalist contends that she has been subject to hardship because of the violation of her right to privacy and her right to be forgotten – which is an extension of the rights recognised by the Apex Court in its Puttaswamy judgement.

Upon a careful perusal of the judicial acumen behind the Puttaswamy judgment, one can analyze that the interpretation given by the Honourable judges to the right to privacy is wide in its scope, which leads to a range of claims arising as a direct consequence of breach of privacy can be admissible; thus, the demarcation of the extent of application of this judgment has to be determined on a case to case basis, depending on the facts and other associated factors. Nonetheless, the number of data breaches occurring in neoteric times, in light of the KS Puttaswamy judgement, indicate a pivotal focal point: the urgent and dire need for the introduction of a data protection law in India.

FACT VS FICTION: CAN COMPENSATION INDEED BE SOUGHT, OR IS IT MERE WISHFUL THINKING?

In the not-so-distant past, we have witnessed a lot many data breaches that have emanated in India – we have had the personal data of over 29 million job seekers which found its way to the dark web, and the expose of the sensitive data of over 7 million CSC-BHIM users last year, and the (in)famous Domino’s India data breach which affected over 180 million of its customers, to cite a few examples among many such instances which have come to light, and the plethora of instances which have not.

In light of such breaches and in the absence of a specific data protection law, limited safeguards are guaranteed by the existing legal regime. Section 43A of the Information Technology Act, 2000 (“IT Act”) specifies that the body corporate, which holds, handles or deals with the sensitive data or information of a similar nature of a particular person, and under whose oversight a data or information breach has taken place (i.e., concerning our discussion, Air India), would be held negligent and liable to compensate such aggreived person. The victim of a data breach can thereby approach the Adjudicating Authority established under the IT Act seeking redressal – with the only catch being that the victim will have to show that he/she has sustained a monetary loss of INR Five Crores or less.

To add on, the umbrella protection of Section 43A comes with one particular condition which can be misused by body corporates, which we find in the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (“2011 Rules”) – whereby, Rule 8 says that the body corporate is absolved of liability to a large extent if it has complied with reasonable security practices, standards, and procedures as specified by the 2011 Rules. Thus, when Rule 8 of the 2011 Rules is read with Section 43A of the IT Act, the threshold of the onus on the body corporate is consequentially lowered – and the single pit-stop defence of a body corporate having adhered to “reasonable security practices and procedures” could let it off the hook hassle-free.

This showcases that as per the current legal regime governing data breach-compensation in India, no aggrieved customer/consumer/user can seek compensation ‘ipso facto’ – even if a particular body corporate concedes to a data breach on its end.

However, this raises a crucially pertinent question – should the corporate under whose aegis the data breach took place be vindicated merely because it adhered to set standards of security as per the IT Act and the 2011 Rules?

An answer in affirmative to the immediate question is troublesome on two grounds – One, the standard of care & reasonability established in the years 2000 and 2011 are far outdated when viewed in contrast with the degree & magnitude of data and information breach that we witness in 2021 and thus, accountability goes for a toss since the body corporate has to merely prove that it has adhered to a yardstick of standard of care, which is archaic & obsolete to its very core, for it to go scot-free; and two, the ambiguity and vagueness in the definitional aspects of the IT Act and its aligned Rules, along with the dearth of an efficacious checks-and-balances mechanism, makes space for expansive legal incertitude. In turn, all of this would provide for a potential leeway wherein the interests of corporations supersede the interests of customers/users/consumers – thereby defeating the very purpose which brought to existence the IT Act, and subsequently, its allied Rules.

CONCLUDING REMARKS

The quandary remains – when one is left to fend for themselves, can the doors of justice be knocked to claim reparation for a data breach? This question needs to be addressed taking into consideration the Personal Data Protection Bill, which is still pending on the floor of the Parliament and thus doesn’t have the accord of being considered a law, yet.

However, not all hope is lost as the legislative machinery is keeping up with the digitisation trends and bringing accountability to data collecting corporates – we now have E-commerce companies brought under the Consumer jurisprudence and the BIS framework for data privacy assurance.

Although, India doesn’t have a piece of legislation that addresses the issue of compensation or redressal of consumers in cases of a data breach so far – nevertheless, this makes the Air India data-breach case of a high consequence since the Court’s ruling will pave the way for corporate accountability, especially in cases of data breach.

The quandary remains – when one is left to fend for themselves, can the doors of justice be knocked to claim reparation for a data breach? This question needs to be addressed taking into consideration the Personal Data Protection Bill, which is still pending on the floor of the Parliament and thus doesn’t have the accord of being considered a law, yet.

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Policy & Politics

An analysis of the New Labour Code and its impact

The effectiveness of the New Labour Code—which were supposed to see the light of the day this year but deferred by a year due to Covid-19 pandemic—will be tested in due times when the same will be implemented.

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INTRODUCTION

Labour, enumerated as entry 24 & 25, falls under the Concurrent List of the Constitution of India. Therefore, both Parliament and state legislatures are competent to enact laws regulating labour. The Union Government stated that there are more than 100 state and 40 central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security and wages, etc. Pursuant to the recommendations of the Second National Commission on Labour, which submitted its report in June, 2002, the union legislature passed The Occupational Safety, Health and Working Conditions Code, 2020 (hereinafter as the ‘Code’). It was re-introduced in Lok Sabha by the Union Minister of Labour and Employment, Mr. Santosh Kumar Gangwar, on September 19, 2020, with the new changes which lead to the withdrawal of the Occupational Safety, Health and Working Conditions Code, 2019 (hereinafter as ‘OSH Code, 2019’). As the OSH Code, 2019 was referred to the Department related Parliamentary Standing Committee on Labour, which suggested substantial number modifications to the code and also in the light of Covid-19 pandemic, the Union Government also proposed certain changes to the OSH Code, 2019. The Code consolidates 13 existing Acts regulating health, safety, and working conditions, which include the Factories Act, 1948; the Mines Act, 1952; and the Contract Labour (Regulation and Abolition) Act, 1970. The OSH Code intends to amalgamate, simplify, consolidate and rationalise more than 600 provisions of the 13 laws mentioned in a single code consisting of around 143 provisions.

EXTENT

The Code emphasizes on health, safety and welfare of the workers employed in various sectors such as industry, trade, business, manufacturing, factory, motor transport undertaking, building and other construction works, newspaper establishments, audio-video production, plantation, mine and dock-work and service sectors. It also aims to provide a broader legislative framework, thereby, enabling the workmen to secure just and humane working conditions and, enables the government at both the union and the state level to make rules and regulations in consonance with the emerging technologies and developments in the industrial sector.

IMPLICATIONS OR CHANGES IN THE LABOUR JURISPRUDENCE

The Code aims at reducing the burden of the employers as it replaces multiple registrations under various enactments to a single common registration, one licence and one return, ultimately creating a centrally consolidated database which will be helpful under ease of doing business policies of the Governments. The Code places an obligation on employers to conduct free annual health check-ups for their employees, to ensure the disposal of hazardous and toxic waste including e-waste, to issue an appointment letter to every employee on their appointment in the establishment.

CONSTITUTION OF ADVISORY BOARDS AT BOTH NATIONAL & STATE LEVEL

The Code states that the Central Government shall constitute a National Occupational Safety and Health Advisory Board which will discharge the functions conferred on it by or under the Code and to advise to the Central Government on the matters relating to standards, rules and regulation to be framed under the Code. The State Government shall constitute a similar type of board to be called the State Occupational Safety and Health Advisory Board which will advise on the matters arising out of the administration of the Code as may be referred to it by the State Government.

CONSTITUTION OF SAFETY COMMITTEES

The appropriate government may require a constitution of safety committees in certain establishments, and for a certain class of workers, consisting of representatives of the employer and the workers, however, the number of employer representatives shall not exceed the employee representatives. The function of these committees will be to act as a liaison between employers and employees. In any establishment which is a factory employing 500 workers or more, or a factory engaged in hazardous work employing 250 workmen or more, or a building or construction work employing 250 workers or more, or a mine where more than 100 workmen are employed in ordinary course; the employer will appoint safety officers according to the qualifications prescribed by the appropriate government.

In another welcome step towards providing some semblance of social security to the unorganised sector workers, the new Code provides for the establishment of a Social Security Fund. Any establishment having 100 workers shall have a canteen facility and that should be provided by the employer. For the appointment of welfare officers under the Code, the minimum number of workmen in any establishment is 250.

CONDITIONS OF EMPLOYMENT

Workers cannot be subjected to work for more than 6 days in a week, one day off every week and will be entitled to one day off for every 20 days of work. Workers or Employees are entitled to receive wages for the work done overtime at the rate of twice the normal wage rate as per the scheme of the Code. Under the Code provisions have been made for the employment of female employees by the employer for working beyond 7 pm till 6 am (basically night shifts) with their consent and conditions relating to safety, holiday, working hours. Furthermore, the women workers are entitled to be employed in all establishments for any kind of work including hazardous ones subject to the conditions that the appropriate government may require the employer to provide adequate safeguards prior to their employment in hazardous or dangerous operations. The Code provides that the wages to the audio-visual workers, shall be disbursed electronically and this will ensure transparency, thereby helping in keeping and maintenance of the records as well.

FALLACIES IN THE NEW CODE

As the Code consolidates the provisions of the 13 legislations related to the subject but at the same time it is unable to simplify them or be all inclusive while dealing with the matters dealt by those laws. These include provisions on registration, duties of employers, and filing of returns. It also includes additional provisions which are applicable to the specific types of workers such as contract labour, inter-state migrant workers, audio-visual workers, or those in mines, beedi & cigar workers, construction workers, factories, and plantations.

Major Safety Issues sidelined & some sectors left out

For example, the Code requires that any person suffering from deafness or giddiness may not be employed in construction activity which involves a risk of accident. The question to be posed here is why such a general safety requirement is not provided for all workers or why the legislature ignored such an important aspect. Similarly, the Code provides for registration of employment contracts for audio-visual workers, raising the question of why there is a special treatment for this category. Furthermore, the disputes related to the contracts of audio-visual workers will be resolved by the dispute resolution mechanisms devised by the appropriate government, if still the dispute remains unresolved the parties may invoke the jurisdiction of the Industrial Tribunal established by the appropriate government under the Industrial Disputes Act, 1947.

The Code under section 2(1)(zx)(a)(i) contains health and safety provisions for workers in plantations measuring at least five hectares. In its report on the OSH Code, 2019 the Department related Parliamentary Standing Committee on Labour noted an assurance of the Union Ministry of Labour and Employment, that workers in plantations measuring less than five hectares would be covered in the Code on Social Security, 2020. However, the definition of a ‘plantation’ in the OSH Code, 2019 retained the five-hectare threshold. This recommendation has not been incorporated in the Code.

NO PROPER FORUMS FOR APPEAL

The Code bars the civil courts from hearing any matters under the code. In some matters where persons are aggrieved by the orders of authorities such as, Inspector-cum-facilitator in the case of factories, or by the revocation of a license for contractors, the Code under section 119 (6) provides for an administrative appellate authority to be notified by the appropriate government. However, it does not provide a proper judicial mechanism for hearing disputes under the code but provides a quasi-judicial one to be notified by the appropriate government as opposed to the earlier regime, for example the functions and constitution of a labour court were clearly laid down under Industrial Disputes Act, 1947. It can be argued that the bar on civil courts from hearing matters under the code, deny aggrieved persons an opportunity to challenge certain issues such as relating to the contractual terms in case of contract labour before a civil court of competent jurisdiction, as such matters may be governed by the terms of contract falling under Indian Contract Act, 1872. The only judicial remedy available to a person aggrieved is to file a writ petition before the relevant High Court, as the High Court is vested with power of superintendence over the courts and tribunals functioning under its territorial jurisdiction.

WEAKENING OF THE INSPECTION SYSTEM

The Code weakens the inspection system in numerous ways. To make matters adverse, the code is silent on the powers of inspectors envisaged by ILO Conventions ratified by India, the provisions such as free entry at any time and without prior notice and as frequently as possible to secure effective application of laws by the establishments of Labour Inspection Convention, 1947 are diluted by the passing of the Code.

EXCESSIVE DELEGATION OF POWERS & REGRESSIVE APPROACH TOWARDS DEFINING KEY TERMS

Under the Constitution, the legislature is the law making organ and the executive is responsible for their implementation. It is often observed that the legislature enacts a law on a specific entry/subject within its domain covering the general principles and policies, and further, delegates detailed rule-making to the government thereby, allowing expediency and flexibility. However, time and again the courts have reiterated that certain essential functions and powers should not be delegated to the government which include, framing the legislative policy on a particular subject matter to determine the principles of the law. Also, it is the general principle that any rule made as a delegated legislation should also remain within the scope of the parent legislation. The Code in section 127, also gives the appropriate government the power to exempt any establishment for a period to be specified in the notification providing exemption. Further, it also enables the state governments to exempt any new factory from any or a group of provisions of the Code in the interest of creating more economic activity and employment. Therefore, the appropriate government has wide discretion in providing exemptions under the Code. Every factory generates employment, and public interest could be interpreted broadly. Also the exemptions could cover a wide range of provisions including those related to hours of work, safety standards, retrenchment process, collective bargaining rights, contract labour. The low numeric thresholds with respect to the number of workers would create adverse incentives for establishment sizes to remain small, in order to avoid complying with labour regulation and therefore the real intention of the legislature will remain unfulfilled as the laws will not be applicable to them. It is worth noting that the Factories Act, 1948 only permitted exemptions from its provisions during the cases of public emergency, and such exemptions were limited to three months. The Code under its scheme also envisages similar provision but however, the life of such exemptions is that of one year at a time. But the drawback here is the regressive approach of the legislature when it defines the phrase ‘Public Emergency’, in explanation to section 128 of the Code, as a state of a grave exigency, whereby, the security of the union or any part of territory is threatened due to war, or external aggression, or internal disturbance. Implications of this could be that in near future the government may invoke the internal disturbance condition to suspend the application of the code and this will be a severe blow to the rights of the workers across India.

Also, this situation could be done for indefinite time as the maximum life for a notification issued after invoking this provision is one year, but this would be circumvented by re-issuing the notifications.

CONCLUSION

The (in)effectiveness of the Code and the rules made thereunder, will be tested in due times when the same will be implemented. These reforms were to see the light of the day this year but due to another deadly wave of the Covid-19 pandemic, the Union has deferred the same by another year. Also passing of these new laws is nothing short of packing the old & aged wine, into some new bottles and displaying them, so that it may attract some new customers to the tavern.

The Code under section 2(1)(zx)(a)(i) contains health and safety provisions for workers in plantations measuring at least five hectares. In its report on the OSH Code, 2019 the Department related Parliamentary Standing Committee on Labour noted an assurance of the Union Ministry of Labour and Employment, that workers in plantations measuring less than five hectares would be covered in the Code on Social Security, 2020. However, the definition of a ‘plantation’ in the OSH Code, 2019 retained the five-hectare threshold. This recommendation has not been incorporated in the Code.

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Policy & Politics

An analysis on gig and platform workers: Code on social security

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The introduction of the social security code in India is an important step towards reformation of workplaces. Social security is commonly viewed as a sort of monetary assistance provided by the government to persons who are either inadequately employed or can’t be employed. In India, the term “social security” has a completely different connotation. Our social security system in India is made up of various labour laws that our state and central governments have enacted over several years. These govern salaries and benefits for workers, as well as safe working conditions and regulate labour and industrial relations.

The Code on Social Security, 2020, amalgamates eight previously existing labour laws of centre. These are the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; Payment of Gratuity Act, 1972; Employees’ Compensation Act, 1923; Maternity Benefit Act, 1961; Employees’ State Insurance Act, 1948; Workers Cess Act, 1996; Cine Workers Welfare Fund Act, 1981; Building and Other Construction and Unorganised Workers’ Social Security Act, 2008.

This Code isn’t just a collection of previous laws consolidated into one. It has expanded the coverage, made benefits available to all workers in the organised and unorganised sectors, incorporated notions of giving maximum benefits with minimal governance, and demonstrates consistency in approach. The Code aims to bring uniformity to the provision of social security benefits to employees, which were previously divided into different acts with varying applicability and coverage. The Code also attempts to give social security to a large group of workers by recognising and covering workers in the unorganised sector. Under this code, draft rules have been published by the Government.

The law also broadens the scope to include fixed-term contract workers, who will now be entitled for gratuities, whereas previously only permanent employees were covered. As per the Code, an employee is entitled to gratuity if they are terminated from their job after a continual service tenure of at least five years, which is the same as earlier. The events that would lead to gratuity are as follows: retirement, resignation, death or permanent disability as a result of an accident or illness, or termination of a contract under a fixed-term employment contract, or on the occurrence of any event notified by the Centre. In the eventuality of an employee’s death, the gratuity would be payable to the employee’s nominee or legal heir. As a result of the inclusion of the term “expiration of fixed-term employment”, now fixed-term contract employees too will be entitled for gratuity.

Under the new laws, these workers will be covered by social security benefits such as income services and health insurance. Several new terms have been developed, such as gig workers, platform workers, and fixed-term employees, which previously were not acknowledged by any labour laws. Gig workers and platform workers, who are part of the unorganised workforce, were not legally recognized by the Government for many years. Since these workers were not paid on a salary basis, they were deprived of many benefits such as Health Insurance, Provident Fund, etc. The new regulations provide gig workers a shared identity.

Definition of “Gig Worker”In India, the phrase “gig worker” is a relatively recent notion. Generally, a gig worker is someone who works hourly or does part-time jobs in various fields, ranging from catering events to developing software, and many more. The job is generally temporary and performed within a set timeframe under an unusual employment arrangement. The term “gig worker” is defined in the Code as, “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationships”. The legal identification of gig workers was urgently needed because the concept covers a large group of contract employees. Even a part-time professor can be covered in the gig economy. Contingent employees, freelancers, and independent contractors are just a few examples of prevalent names. The gig economy finds its origin and is mostly popular among youths in western countries. This model enables students to start working at a young age and get expertise in their chosen fields. The perks involved with such employment would inspire individuals in India to pursue these jobs and avail benefits that arise out of it.

Definition of “Platform Worker” In general, a platform worker is someone who works for an enterprise that offers specific services to clients, customers, individuals or organisations through an online platform. Uber, Ola, Zomato, etc. are some of its examples. According to the Code, a platform worker is, “a person engaged in or undertaking platform work”. In order to have a fuller insight, the definition of platform worker must be read in conjunction with the definition of platform work, which specifies what platform work is. It is defined as, “a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment.’’

WHAT’S THERE FOR GIG AND PLATFORM WORKERS IN CODE?

The Central Government has proposed to generalize benefits such as health and maternity benefits, as well as life and disability insurance. The state government is responsible for providing benefits to workers such as provident fund, skill upgradation, and accommodation. Nirmala Sitharaman, the Finance Minister of the nation, has also stated that all sorts of workers would now be subject to minimum wage regulations and that the Employees State Insurance Corporation, or ESIC, will apply to the government. The Centre also has no information about how many gig workers at present are now employed in India; however, some independent estimates put the figure at above 130 million. To reap the benefits of these planned incentives, the government has planned to create an online platform for all qualified unorganised workers in the country by June 2021. It’s mandatory for all the gig and platform workers to register on this portal. In order to be eligible, the worker must be over the age of 16 and under the age of 60. Also, they have worked for at least 90 days in the past 12 years. The worker would be required to submit a self-declaration, either online or offline, as well as additional documents, including the Aadhar Card. The Central Government could also choose five members for the unorganised sector to the National Social Security Board, which will frame policies and regulations for gig and platform workers. Furthermore, the Code requires aggregators, or employers in the case of gig workers, to donate a set proportion of their revenue to a social security fund for the unorganised sector’s welfare.

Amidst this pandemic gig economy has been a major help to the country. When we all were staying at our homes due to the fear of getting infected by the virus, various workers of online platforms like Zomato, Swiggy, etc, were providing services ranging from delivering food to delivering medicines.

India is now seeing a booming phenomenon where a lot of start ups are coming up and their business model rests on such kind of an arrangement where they are engaging these people on an independent contract basis meaning thereby, that there is no employer employee relationship with them and so they are not suppose to comply with all the labour laws that exist in the country because all of them focus on an employee so one concern is that if a recognition is given to these gig workers then even the business model of these organisations might collapse because they are engaging these people in thousands of numbers.

Second concern is related to these workers who have constantly been asking for certain minimum benefits for themselves. A couple of years back certain organisations of these workers came forward and filed a PIL in Delhi High Court asking for setting up of a committee that can examine whether they can be treated as an employee, whether they can get the benefits under labour laws but there was no headway on that front. So, its very tricky balance to meet. So, government has tried to do that by not saying that these are employees on one hand and on the other hand giving them atleast social security benefits meaning thereby providing life benfit, health benefit, benefit in relation to accidents. So, the government plans to formulate a scheme under the code on social security which will provide atleast these benefits to gig workers, platform workers there has been an attempt to balance both the interests.

CONCLUDING REMARKS

We are witnessing the rise in the trend of people using online platforms like Zomato, Uber etc. on a day-to-day basis and with the increase in the services provided by the online platforms there will be increase in number of people working for these platforms. So it becomes of utmost importance to formulate a robust scheme to safeguard the welfare of the people working for the online platforms.

Although, the government has recognized the workers working for online platforms by introducing the definition in the Code on Social Security but only the introduction of the concept is not enough there are many things needed to be done. First concern is that since that there is only one code that defines the concept of gig workers. Now, when we look at both the definitions of gig workers and platform workers one can interpret that Platform worker seems to be a narrower concept falling within the wider concept of gig worker. Now, this problem paired with the lack of definition in the other codes leads to confusion with regards to what gig workers can avail in terms of protections and minimum wages, etc. The lack of clarity in the definition also leads to large ambiguity allowing the platforms to decide who is a gig worker and a platform worker.

Secondly, the Judiciary should also give certain recommendations for the welfare of Gig Workers as till date we lack on judicial front when it comes to take steps for gig workers. On 19th February, the Supreme Court of the United Kingdom in Uber BV & Ors. v. Aslam & Ors. ruled that Uber drivers should be treated as employees rather than independent contractors, making them liable for all employment-related benefits such as minimum wage, annual leave, and insurance. No such issues with regards to gig workers have been dealt by Judiciary in India. In 2018 the Delhi High Court in the case Delhi Commercial Driver Union v. Union of India was posed with the question that whether these workers can be conferred with the status of worker but before this question could be answered the matter was eventually withdrawn, thereby pushing out employment status of gig workers in India to a later date. So, there is a need for proper guidance on the issue by the Judiciary so that a proper policy could be framed by which the interest of the workers and online platforms can be balanced.

The Central government has proposed to generalise benefits such as health and maternity benefits, as well as life and disability insurance. The state government is responsible for providing benefits to workers such as provident fund, skill upgradation, and accommodation. Nirmala Sitharaman, the Finance Minister, has also stated that all sorts of workers would now be subject to minimum wage regulations and that the Employees State Insurance Corporation, or ESIC, will apply to the government. The Centre also has no information about how many gig workers at present are now employed in India; however, some independent estimates put the figure at above 130 million. To reap the benefits of these planned incentives, the government has planned to create an online platform for all qualified unorganised workers in the country by June 2021. It’s mandatory for all the gig and platform workers to register on this portal. In order to be eligible, the worker must be over the age of 16 and under the age of 60.

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Policy & Politics

SURROGACY BILL AND REPRODUCTIVE RIGHTS: AN ANALYSIS

Atulendra Rathour

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To regulate surrogacy in India, the Surrogacy (Regulation) Bill, 2019 was introduced and was passed in Lok Sabha but was later sent to Select Committee. The Select Committee made some changes and introduced a draft of the Surrogacy (Regulation) Bill, 2020. Union Cabinet approved it on 26th February 2020. The bill is yet to be introduced in the Lower house in the upcoming session due to a pandemic its introduction is delayed.

The new bill allows any woman to surrogate willingly as the earlier bill only allowed close relatives to be surrogates. The clause defining infertility has also been removed to make access to surrogacy easier. This new proposed Bill is a better version of the previous 2019 Bill. Many of the loopholes related to the previous bill has been covered but still, it relies on a Need-based approach instead of emphasizing a Rights-based approach. The bill prohibits Commercial Surrogacy and promotes Altruistic Surrogacy. The bill aims to prevent further exploitation of surrogates and children born out of surrogacy. Even then, some clauses of the bill are contradictory with Women’s autonomy and their reproductive rights.

By completely prohibiting Commercial Surrogacy, also affects the bodily autonomy of women. The ethical (Altruistic) Surrogacy expects a woman to undergo the complete period of pregnancy that too without any compensatory benefit. Just in the name of compassion, love, and affection. Surrogacy is not a one-day issue to be taken so lightly rather it involves several Physical and Mental ups and downs. Banning commercial Surrogacy is also a strong move towards constraining the income of Surrogates as the $400 million – a year industry will come into its foot. This bill will further motivate surrogates not to go for surrogacy which will lead to the disappearance of surrogacy and will affect couples’ rights to avail child.

The bill also fails to pass the test of the “Golden Triangle” laid down by Apex Court in Minerva Mills Ltd. & Ors v. Union of India & Ors. The test checks the constitutionality of the laws based on Equality, liberty, and freedom of rights. The right to make reproductive choices forms a part of Article 21 of the Indian Constitution. Apex Court in Suchitra Shrivastava v. Chandigarh Administration said, “There is no doubt that a woman’s right to make a reproductive choice is also a dimension of personal liberty as understood under article 21 of the Constitution of India”. Similar contention of Supreme Court was given in the case of Devika Biswas v. Union of India. In another landmark Judgment of KS Puttaswamy, nine judges bench of Supreme Court held that Personal and bodily autonomy forms a part of the Right to Privacy under Article 21 of the Indian Constitution. High Court of Andhra Pradesh in B.K. Parthasarthi v. Government of Andhra Pradesh held that State’s interference in one’s procreation is a direct interference in one’s privacy. Right to livelihood also forms a part of Article 21 and banning commercial surrogacy will also violate this right as a large number are run their livelihood by becoming a surrogate of others.

Conclusively, it is said that the bill is an attempt to tackle the exploitation of surrogates on the other hand it is a clear violation of Women’s bodily autonomy and reproductive choices. The bill fails to overcome the patriarchal and traditional notion of society.

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Policy & Politics

RBI’S FINANCIAL STABILITY REPORT AND A CHECK ON BAD LOANS

Ishita Singh

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The financial stability report is released biannually and provides an account of collective assessment of the Sub-Committee of the Financial Stability and Development Council which is subsequently headed by the Governor of the Reserve Bank of India. As per the data the policy support and Vaccination has fostered the national recovery but the second wave of the pandemic has shown severe impacts on the economic activity. A major slip in the Gross NPA is expected in the entire banking system but furthermore the MSME is reported to be at risk as the retail loans given to the MSMEs or the quality of the credit is calculated to deteriorate which will serve a threat on the consumer credit.

Reserve Bank of India’s latest released financial stability report is like the grade card of its financial and banking sector throughout the pandemic. A preconceived notion of disruption of the banking sector has been proved inaccurate. As per the released report the banks fared much better and the non-performing asset ratio was systematically controlled and contained by the end of March 2021. The regulatory policies of forbearances and their strategic withdrawal have ensured limited impact on the balance sheets of the banks. The NPA ratio of banks stood at 7.5% for March 2021. The predictions given by RBI in July 2020 for NPA was the baseline scenario could range from 8.4 percent to 12.5 percent for March 2021, however the NPA settled at much better figures than the overestimation predicted.

Additionally, capital position of banks which is calculated as capital to risk weighted assets ratio (CRAR) was also reportedly deteriorated from 14.6 percent in March 2020 to 13.3 percent by March 2021. Banks incredibly raised capital through Public Issues and Qualified Institutional Placements resulting in an improved capital position during the financial year 2020-2021. The capital position of banks despite of the outbreak of the pandemic improved to 16% in March. Taking into ambit the stressed scenarios the Reserve Bank of India doesn’t anticipate the 46 banks to fall short of capital.

As per the report released by the Reserve Bank of India, banks have enough capital to recover from the collapse of any asset functioning or management. The allocated proportion of provisions to gross non-performing assets hiked from the figures of 66.2% in March 2020 to 68.9 to March 2021. There were various regulatory mechanisms announced by the central Government to strengthen and facilitate individuals who were hit by the pandemic and faced economic crisis due to lack of income facilities. The measures comprised of loan moratoriums, restructuring of loans, non-accounting of NPA and their timely withdrawal etc. has contained the hike in the non-performing assets. The cooperative ventures of the central Government and The Reserve Bank of India have facilitated and incentivized banks through instruments such as the Targeted Long Term Repo Operations (TLTROs) additionally aggressively granted the sectors that are most affected due to the pandemic.

The fragile spot and an important takeaway of the report is the MSME portfolio. Three loan restructuring schemes have been implemented since 2019 to assist the MSME sector but the stress on the MSME sector continued to remain elevated as the NPA ratio for Government owned banks stood at 15.9 percent for March 2021 compared to 13.1 percent in December 2020. A reported rise in the fiscal deficit is anticipated as there is a Rs. 3 Lakh crore burden which will eventually inflate the fiscal pressure to Rs. 14 Lac crore resulting in 3-4% to the current fiscal deficit of 9.3%. Furthermore, there can be an increased dependence on the government owned securities as per the reports as banks are finding recourse investing their liquidity in Government securities.

The two major elements that have resulted in the negative growth of the Gross Domestic Product is the Gross Fixed Capital Formation and the Private Final Consumption Expenditure. It is basically the expenditure that is incurred on the final consumption of Goods and services by the resident households. The Reserve Bank of India has incentivized the financial institutions with the credit support required during the pandemic. It has furthermore provided the banks with Collateral support and has opened new credit lines. The most important step of providing a moratorium and rolling it back systematically during the pandemic has helped in containing financial crisis.

WAY FORWARD

As per the advisory guidelines in the Financial Stability Report issued by the Reserve Bank of India the banks are to reinforce their capital and the liquidity positions to fortify their status against the balance sheet distress. The demands have to be generated in the economy to balance the currents scenario, the role of the financial institutions and significant leaders will be impactful in this process. Apart from this the need for Second Generation reforms have to be initiated which shall comprise of rural development inclusive of agriculture and allied sectors and small-scale industries should be predominant. The major objective of revival of the rural economy will result in the overall economic growth and development of the country. Furthermore, increasing the efficiency of the Government owned Banks are to be prioritized. The difference between the Private and the Public service banks are just 5% in terms of NPA. The private sector banks in the baseline scenario will get to around 6% whereas the public sector banks shall be double of it resulting to be 12%. The efficiency quotient of the public sector banks is indispensable, the process of privatizing can be implemented so as to achieve the same. The private sector banks as per the end results have been more efficient and have proven be less affected by the pandemic due to their high management and strategic policies. One of the solutions to bring the banking industry out of the crucial stressed management cycle is the establishment of Bad Banks. The Bad Bank is the Asset Reconstruction Company or an Asset Management Company that takes charge of the Bad loans of the commercial banks and furthermore manages them and achieves the objective of recovering the money over a targeted period. The SARFAESI ACT of 2002 also aims to diminish or nullify the Bad loans and accounts and has been effective in achieving the set target. More stronger capital positions, good governance adding on the efficiency in financial intermediation can be the touchstones of this endeavour so that financing needs of productive sectors of the economy are met while the integrity and soundness of banks and financial institutions are secured on an enduring basis.

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Policy & Politics

JOB RESERVATION ACT WILL NOT NEGATIVELY IMPACT INDUSTRY: HARYANA CM

The Chief Minister says that the state government is working towards reducing the cap of Rs 50000 per month gross salary as mentioned in the Act so that only unskilled and semiskilled labour come under the purview of this Act.

Tarun Nangia

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“The Haryana Employment of Local Candidates Act, 2020 will not negatively impact industry in the State,” said Manohar Lal, Chief Minister, Government of Haryana during a meeting with CII delegation over virtual platform, today.

Manohar Lal assured that the Government of Haryana is with the industry and the rules being prepared for the Act are such that there will be no harassment of units in the State on account of this Act. The Chief Minister emphasised that the state government is working towards reducing the cap of Rs 50000 per month gross salary as mentioned in the Act so that only unskilled and semiskilled labour come under the purview of this Act.

The Chief Minister mentioned that through the Haryana Enterprises & Employment Policy 2020, the State has provided a number of incentives to industry for promoting employment of local youth as well as ensuring development of backward areas and requested industry to come forward and work together with the State in achieving overall development of the State.

Appreciating the Relief & Rehabilitation work undertaken by CII and Industry during the first and second wave of COVID-19, Shri Manohar Lal said that it was good to see that the industry came forward and supported the State in this crisis. Highlighting the State’s preparedness for the third wave of COVID-19, the Hon’ble Chief Minister said that the State is working towards setting up oxygen generation plants in 136 Community Health Centres of the State and is also developing a mechanism so that there is no shortage of essential medicines as faced during the second wave of COVID-19.

Speaking on the occasion, Abhimanyu Munjal, Chairman, CII Northern Region & Jt. MD & CEO, Hero FinCorp Ltd requested the Hon’ble Chief Minister that to maintain business continuity, the State Government’s expectations from the Industry in such medical and health emergencies should be communicated well in advance. Sharing a brief of the relief

& rehabilitation work carried out by CII, CII Foundation and CII Members to support citizens during the second wave of COVID-19, Mr Munjal assured the Hon’ble Chief Minister that Industry has always been on the forefront to work shoulder to shoulder with the State Government in its fight against such crisis and will continue to lend its support.

Rajiv Gandhi, Chairman, CII Haryana State Council appreciated the undying efforts of the Government of Haryana for promotion of Industry and Trade in the State under the dynamic leadership of Shri Manohar Lal .

Gandhi emphasized that while Haryana has been able to attract huge investments with various industry friendly initiatives, the recent

Haryana State Employment of Local Candidates Act 2020 has put on hold investment and expansion plans of many business houses which is not a good sign. Mr Gandhi requested the Hon’ble Chief Minister that some alternate mediums can be considered to address issue of job creation for the Youth in Haryana and the Job Reservation Act should not be forced upon the industry in the State. Mr Gandhi assured industry’s full support in increasing the employability of the State’s youth through skill development and various other means as suggested by the State Government.

The meeting was attended by CII Office Bearers of the Northern Region and Haryana including Mr Anshuman Magazine, Deputy Chairman, CII

Northern Region & Chairman & CEO, India, South East Asia, Middle East & Africa at CBRE; Mr Rohit Relan, Vice-Chairman, CII Haryana & CMD, Bharat Seats Ltd; Dr Rajesh Kapoor, Regional Director, CII Northern Region and Mr Vivek Thakur, Director & Head – CII Haryana.

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