The Three New Labour codes: Understanding Industries Flexibility In Doing Business

The Parliament of India has passed three labour codes on 23rd September 2020 merging 24 central labour laws in a dominant boost to labour reforms. The Codes are considered to bring significant change in the labour welfare reforms covering 50 crores organized and unorganized workers including the gig, platform and will be beneficial for social security to those in the self-employment sector.

Set Out Below is the Brief Overview of the Three New Labour Codes:

(i) Industrial Relations Code,2020, proposed to consolidate and amend three existing central labour laws relating to the conditions of employment in an industrial establishment viz., Industrial Dispute Act,1947, Trade Unions Act 1926 and Industrial Employment (Standing Orders) Act 1946. The Code intends to increase the threshold for applicability of the provision about the requirement of taking prior permission of the Government before retrenchment, lay-off and closure from 100 to 300 workmen. Further, the Code has made industrial strike more difficult by clamping new conditions and by broadening the definition of the strike to include “the concerted casual leave on a given day by fifty percent or more workers employed in an industry” which brings “mass casual leave” under its ambit.

(ii)  The Code on Social Security, 2020 intends to extend the social security benefits to all the workers and employees in organized and unorganized sectors including the “gig workers”. After commencement of this single Code, 9 central labour statues related to social security which includes The Employees’ Compensation Act, 1923, The Employees’ State Insurance Act, 1948, The Employees Provident Fund and Miscellaneous Provisions Act, 1952, The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, The Maternity Benefit Act, 1961, The Payment of Gratuity Act, 1972, The Cine Workers Welfare Fund Act, 1981, The Building and Other Construction Workers Welfare Cess Act, 1996, The Unorganised Workers’ Social Security Act, 2008 shall stand repealed.

 (iii)   The Occupational Health, Safety and Working Conditions Code, 2020 proposes to amalgamate and amend the laws which relate to the health, safety and working conditions of the employees in an establishment. It states the duties of employees and the employers while considering the safety standards for different sectors mainly focusing on working conditions of workers, health, hours of work, leave etc. It also provides for statutory benefits such as wages to fixed-term employees with their permanent counterparts. It subsumes and replaces 13 labour statues including The Factories Act, 1948,The Plantations Labour Act, 1951, The Mines Act, 1952, The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, The Working Journalists (Fixation of Rates of Wages) Act, 1958, The Motor Transport Workers Act, 1961, The Beedi and Cigar Workers (Conditions of Employment) Act, 1966, The Contract Labour (Regulation and Abolition) Act, 1970, The Sales Promotion Employees (Conditions of Service) Act, 1976, The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, The Dock Workers (Safety, Health and Welfare) Act, 1986, The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.

There are a total of 4 new labour Codes one of which is The Code of Wages,2019, which proposed the universalisation of minimum wages has already been passed by the parliament in 2019. The Codes jointly have been conceptualized keeping in view the dynamic scenario and futuristic approach so that the country makes its headway on a faster growth trajectory. The Codes collectively subsumes and replaces 29 central labour statutes with an objective of harmonious industrial relations, growth of industries, employment, balances regional development and brining more disposable income in the hands of workers.