India’s New Labour Codes
India’s New Labour Codes
India’s labour laws have undergone a significant overhaul with the introduction of four new Labour Codes aimed at simplifying and streamlining the country’s complex labour regulations. These codes consolidate and replace several older laws, making compliance easier for businesses while providing greater protection and benefits to workers. The new Labour Codes are set to transform the way employers and employees interact, ensuring a balanced approach to economic growth and worker welfare.
What are the New Labour Codes?
The four Labour Codes passed by the Indian government in 2019 and 2020 are:
1- Code on Wages, 2019
2- Industrial Relations Code, 2020
3- Code on Social Security, 2020
4- Occupational Safety, Health, and Working Conditions Code, 2020
Together, these codes consolidate 29 existing central labour laws into a more manageable framework. Let’s break down each of these briefly.
1- Code on Wages, 2019
The Code on Wages combines four key laws related to wage payments, including the Minimum Wages Act and Payment of Wages Act. Its key highlights are:
Universal Minimum Wage: Ensures a national minimum wage, making it mandatory for all industries and sectors to provide at least this baseline payment.
Timely Payment: Mandates that wages must be paid on time without delays.
Gender Neutrality: Equal wages for both male and female employees for the same type of work.
This code is designed to reduce wage-related disputes and ensure fair compensation across industries.
2- Industrial Relations Code, 2020
The Industrial Relations Code merges three laws related to trade unions, employment disputes, and industrial action. Its primary objectives are:
Easier Dispute Resolution: Simplified mechanisms for resolving industrial disputes, reducing the time for legal redress.
Stricter Strike Rules: Unions must give 60 days’ notice before going on strike in public utilities and large sectors.
Ease of Firing and Hiring: Establishes clearer processes for lay-offs and retrenchments for companies employing over 300 workers.
This code seeks to balance workers’ rights with ease of doing business, reducing conflicts between employers and employees.
3- Code on Social Security, 2020
The Code on Social Security consolidates laws regarding social security benefits like provident funds, insurance, and maternity benefits. Key features include:
Extended Coverage: Expands social security benefits like Employee Provident Fund (EPF) and Employee State Insurance (ESI) to gig workers, freelancers, and unorganized sector workers.
Maternity and Gratuity Benefits: Ensures improved coverage for maternity benefits and gratuity payments.
Social Security Fund: Establishment of a social security fund to provide benefits to workers in the unorganized sector.
This code aims to provide a social safety net to all types of workers, formal or informal, ensuring better financial security.
4- Occupational Safety, Health, and Working Conditions Code, 2020
This code focuses on ensuring safe working conditions and includes provisions for health, safety, and welfare at workplaces. Its key highlights are:
Uniform Working Hours: Standardized working hours across various sectors.
Mandatory Welfare Facilities: Ensures that establishments provide basic welfare facilities like clean drinking water, canteens, and separate restrooms for men and women.
Safety Standards: Enhanced safety norms in hazardous industries and stricter implementation of workplace health standards.
The code promotes a safe and healthy work environment across industries, prioritizing workers’ well-being.
Conclusion
India’s new Labour Codes mark a monumental shift in labour regulations, aimed at promoting worker welfare while simplifying compliance for businesses. These reforms not only focus on wage protection and social security but also ensure safer working conditions and a fair balance between workers’ rights and business flexibility.
As businesses adapt to these changes, workers across sectors will benefit from greater protection, standardised wages, and expanded social security. The new Labour Codes hold the promise of creating a more equitable and transparent labour ecosystem in India.
