As India ushers new era of reforms with implementation of the labour codes, major companies have welcomed the development. The implementation of the new labour codes will significantly strengthen India’s export ecosystem by creating a more flexible, simplified and predictable regulatory environment.
Reacting to the four labour codes, Eternal Ltd formerly known as Zomato on Saturday welcomed the implementation. The company said that it will help strengthen the social security access for gig workers, including for it Zomato and Blinkit businesses.
Eternal, the parent entity of Zomato and Blinkit said it does not think the financial impact on account of these rules will be detrimental to long-term health and sustainability of its business. In a regulatory filing, the company further said that “to our shareholders - the exact financial and operational contours of CoSS will become clear only once the corresponding Rules are notified. We have been engaging with the Government over the years and providing inputs throughout this process, and we will continue to do so. We don’t think any financial impact on account of these Rules will be detrimental to long term health and sustainability of our business. We have been anticipating and planning for these social security related contributions in our businesses for a while now.”
Meanwhile, Amazon has also said that it is assessing the development. “We welcome the government’s intent of implementation of labour reforms and we are evaluating the changes which would have to be ushered in. The COSS is aligned with our existing priorities of providing safety, security, and welfare of our employees,” Amazon India spokesperson said.
The government on Friday notified the four labour codes, which have rationalised 29 existing labour laws. These will formalise employment, strengthen worker protection, and make the labour ecosystem simpler, safer and globally aligned.
The four labour codes are -- the Industrial Relations Code, 2020, the Code on Wages, 2019, the Occupational Safety, Health and Working Conditions Code, 2020 and the Code on Social Security, 2020.
Under the new codes, 'gig work', 'platform work', and 'aggregators' have been defined for the first time.
Aggregators will now have to contribute 1-2 percent of their annual turnover towards the welfare of gig and platform workers, with the levy capped at 5 percent of the amounts paid or payable to these workers. For the first time, Indian law formally defines the terms 'gig worker', 'platform worker' and 'aggregator'. The government has also announced that gig and platform workers will receive an Aadhaar-linked Universal Account Number (UAN), ensuring their welfare benefits remain fully portable and accessible across states, regardless of migration.
Talking about the impact of reforms on the company, Sowmya Kumar, Partner, Cyril Amarchand Mangaldas said, “Operational costs of aggregators will increase, as they will now have to contribute 1-2% of their turnover towards social security for gig workers. However, the extent of increase (including matters such as how turnover is to be contributed, frequency of contributions, how gig workers will benefit, etc.) will depend on the fine print in the scheme that the Government will now frame. We understand that the Government has already had discussions with stakeholders on the modalities of this scheme, which will cover different classes of aggregators (such as ride sharing services, food and grocery delivery services, logistics services, e-market place, etc), as specified in the OSH Code.”
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