Labour Codes

The government recently passed 3 bills which in the Lok Sabha namely (i) Industrial Relations Code, 2020 (ii) Code on Occupational Safety, Health & Working Conditions Code, 2020 & (iii) Social Security Code, 2020.

These bills have been introduced to give equal importance to ‘Shramev Jayate’ and ‘Satyamev Jayate’. By means of these bills, 29 labour laws are being subsumed in the simplified, easy to understand transparent 4 labour codes. Out of the 4 labour codes, Code on Wages has already been passed by Parliament and have become the law of the land. 

Highlights of these bills (also called the New Labour Code):

  • New Labour Codes to envisage covering over 50 crore workers from organized, unorganized and self employed for minimum wages, social security.
  • Social Security net of ESIC and EPFO to Widen opening up for all workers and self-employed.
  • Setting up of “Social Security Fund” for 40 Crore unorganized workers alongwith GIG and platform workers and will help in widening Universal Social Security coverage.
  • Pay parity to women workers as compared to their male counterparts.
  • Fixed Term Employee to get same service condition, gratuity, leave and Social Security as that of Regular Employee.
  • 50 % of the penalty in case of accident to go to the workers alongwith other dues.
  • “National Occupational Safety and Health Board” to be set up for providing international level safety environment.
  • Working journalists definition to include Digital and Electronic Media.
  • Plantation workers to also get ESIC benefits along with GIG and platform workers.
  • All migrant Workers Labour now to be covered instead of only those brought by contactors earlier.
  • Data base on Migrant Workers through Law to help better targeting, skill mapping and utilization of Governments Schemes by workers.
  • Migrant Workers to get journey allowance from Employer, to visit home town once a year.
  • Helpline to redress grievances of Migrant Workers.
  • The Codes to Promote Harmonious Industrial Relations for higher productivity and more employment generation.
  • Labour Codes will Establish transparent, answerable and simple mechanism reducing to one registration, one license and one return for all codes.
  • Inspector to be now made as Inspector – cum- Facilitator and introduction of Random, Web Based Inspection System to remove Inspector Raj.
  • Compulsory facility for Helpline for redressal of problems of migrant workers.
  • Making a national database of migrant workers.
  • Provision for accumulation of one day leave for every 20 days worked, when work has been done for 180 days instead of 240 days.
  • Equality for women in every sphere : Women have to be permitted to work in every sector at night, but it has to be ensured that provision for their security is made by the employer and consent of women is taken before they work at night.
  • In the event of death of a worker or injury to a worker due to an accident at his workplace, atleast 50 % share of the penalty would be given. This amount would be in addition to Employees Compensation.
  • Provision of “Social Security Fund” for 40 Crore unorganized workers alongwith GIG and platform workers and will help Universal Social Security coverage.
  • Pay parity to women workers as compared to their male counterparts.
  • Occupational Safety & Health Code to also can now over cover workers from IT and Service Sector.
  • 14 days notice for Strike so that in this period amicable solution comes out.
  • Vibrant mechanism proposed for speedier disposal by Labour Tribunals as “Justice delayed is Justice denied”.
  • The Codes to Promote Harmonious Industrial Relations for higher productivity and more employment generation.
  • Labour Codes to stablish transparent, answerable and simple mechanism reducing registration requirement to just one from eight; need of licence also to just one from three four under different laws earlier.
  • Inspector to be now made as Inspector – cum- Facilitator and introduction of Random, Web Based Inspection System to remove to Inspector Raj.
  • Penalties increase manifold; to act as deterrent. 

How will these changes in the labour code benefit the country:

The changes and reforms in the labour laws have been conceptualized keeping in mind the changing scenario over the years and also making them futuristic so that country marches on faster growth trajectory. With these the peaceful and harmonious industrial relations will be promoted in the country which in turn will lead to growth of industry, employment, income, balanced regional development and will bring more disposable income in the hands of workers. These reforms in the country will help our country to attract the Foreign Direct Investment and also domestic investment from the entrepreneurs and will end ‘inspector raj’ in the country and will bring total transparency in the system.

Important for Prelims:

  • The Second National Commission on Labour (Ravindra Varma, 2002) suggested consolidating all labour laws into four codes.

Source: PIB