Author: Swetha C

Image source: Indian Express

The bill passed in parliament got its assent by president on September 28,2020. Though opposition had vehemently opposed it and boycotted the session, Labour and employment minister Santhosh Kumar Gangwar was positive about the bill assuring it would balance the need of workers. India has 44 labour laws and 463 acts, with this bill it has now merged 29 acts and consolidated it into 4 labour codes-the Occupational Safety, Health and Working Conditions Code, 2020; the Industrial Relations Code, 2020; and the Code on Social Security, 2020 the first of such code, the wages code was passed in 2019.[1] For many years people were concerned about the labour laws being archaic and outdated raised voices for reform. With pandemic in run, concerns have raised to new high because of job loss, slow economy. So, reforms to the benefit of “all walks of employee” are must and the need of an hour.


The first of the code was passed in 2019 consolidated Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976 — into a single code. This code laid the principle of “state- minimum wages” to all employees, that is it obligates state to make the minimum wages for the establishments in the destined state, central government would fix floor wage of which the state and central minimum wage must be higher than that and bars any discrimination in respect of that. Collective agreements between employer and employee for the fixation, looking into the needs of workers and other economic factors prevailing in the state can be the elements for the wage fixation[2]. But sometimes collective agreements would fail to cover the broad majority of workers, in such case citing ILO minimum wage convention here open social dialogues presiding the authorities and collecting periodical wage statistics would be more effective for shaping the policy.[3] This code is yet to spiral.


State government to exempt any new factory from the provisions of the Code to create more economic activity and jobs[4]. This legislation has provision to include inter-state migrant who is either been recruited by contractor who shall not obtain fee from labourer and bound to common license or come on his own to where he works, to treat them as that of other worker and government is obligated to make schemes to migrants for availing benefits of PDS. Registration of such establishment compressed from 6 months to 60 days. This code which has merged 13 acts made special provision relating to women to have them work before 6 am and beyond 7 p.m. only with their consent and to make sure the adequate safeguard been made prior to their employment if it has dangerous for their health and safety. So, to providing adequate safety, healthy and working conditions for audio visual workers, mines, beedi and cigar establishment which shall have common license, building or construction, factories and plantation separate provisions have been made and in pursuit of its annual health examination should be conducted and no fee shall be collected for such. Government has provision to maintain social security fund for such and this applies also to unorganised workers. Employer in separate provision made responsible to maintain facilities for male, female and transgender for whom period of working hours is fixed to 8 hours, in case of overtime the wages can be twice. So, this code really has reformative element to it when women’s safety ensures equality in the working without compromising their working opportunity. And migrant workers were given importance when recently crisis happened because of pandemic. When people claimed this new code had diluted existing welfare provisions this code ensured by occupational safety board to conduct statistics that no such wrong would happen[5]


As second National Commission on Labour, which submitted its report in June, 2002 had recommended that the existing set of labour laws should be broadly amalgamated this one such code has merged 9 acts and extends in providing social security to unorganised workers, gig workers and platform workers in areas of fixing certain amount as compensation in case of fatal accidents and occupational disease , granting gratuity and maternity benefit in separate chapter from prohibiting women from employment during pregnancy to medical bonus this chapter covers all for maternity, various schemes like employee’s provident fund employee pension fund(old age protection) employee’s deposit linked insurance and to any other schemes for providing social security this code allows the levy and collection of cess by construction worker[6]. But when this code draft made public many people were in the verge of being jobless and no job security. Since this code includes security to even unorganized workers too it emerges as grip to them. This code establishes under it career centres which indicates every establishment to inform about the job vacancies which before been limited to only few. [7]

Image source: Indian Express


Labour is a concurrent subject so it implies that both central and state government can make laws regulating labour but under this code, central government will continue to be the appropriate government for a central PSU even if the holding of the central government in that PSU becomes less than 50% post the commencement of the Bills. This code powers the retrenchment of workmen up to 300 workers in an establishment which before was limited to only 100 without government approval. This code which combines 3 acts introduces fixed term employment and they should be treated with par to permanent employees. When this code was passed it took huge toll for ‘hire and fire workers’ but it isn't a new but the once already had a moderate run in Rajasthan[8]. Earlier we discussed the unemployment problems and job losses, but one of the causes for such would be labour inflexibility which held back business and foreign business. This code also ensured strike can be done after a issuing notice and failing such would disallow them to go for strike[9]. Despite having 32542 compliances 3048 filings reluctance in workforce is making the business run difficult here. MAKE IN INDIA would be possible if there is flexibility been given to employers by sacking their employee inspire investors to set up big factories and there will be greater employment opportunities. So this bill with all criticisms being answered is definitely a good to go policy.

The bills which was passed after 3 days from introduced in parliament had Labour Minister Santosh Gangwar saying that the purpose of labour reforms is to provide a transparent system to suit the changed business environment. 16 states have already increased the threshold for closure, lay off and retrenchment in firms with up to 300 workers without government permission.


[1] Zia Haq understanding the new labour codes, sept 24,2020 [2] K. Chandru a wage code that is hasty composition sept 30,2020 [3] https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_ID:312473:NO

[4] https://www.prsindia.org/billtrack/occupational-safety-health-and-working-conditions-code-2020 [5] 5 questions about the new Industrial Relations Code and the Occupational Safety, Health and Working Condition Code answered [6] THE CODE ON SOCIAL SECURITY, 2020 NO. 36 OF 2020 [7] Devika Code on Social Security, 2020 | Schemes for unorganised workers, gig workers & platform workers, Gratuity period for journalists reduced from 5 to 3 years, Scope of Social Security widened [Read More] [8] https://scroll.in/article/675644/hiring-and-firing-workers-was-never-difficult-in-rajasthan-data-shows [9] THE INDUSTRIAL RELATIONS CODE, 2020 NO. 35 OF 2020

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