New Labour Law Codes

In 2019, the Ministry of Labour and Employment introduced four bills namely, the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the Code on Occupational Safety and Social Security, proposing the consolidation of the existing 29 labour legislations.[1] The Lok Sabha passed the Code on Wages 2019, however, the other three bills were replaced by new bills after considering the Standing Committee on Labour’s reports.[2] These codes which are yet to be implemented aim to bring many changes to the existing labour law regime as discussed below:

  1. Inclusion of new terms: The new labour codes have defined terms like ‘contractor’, ‘contract labour’, ‘short-term labour’, ‘fixed-term employment, ‘gig’, ‘platform workers’, etc., thereby, increasing the protection ambit given under labour laws.
  2. Changes to previous definitions: There has been the specific exclusion of certain employment institutions from the definition of ‘industry’ and expansion in the definition of ‘cine workers’, ‘industrial dispute’, ‘strike’, ‘inter-state migrant worker’, ‘worker’, ‘employer’, etc.
  3. Access to work security by all: The new labour codes aim to provide benefits of the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS), and all types of medical benefits as provided under Employees’ Insurance to both organized as well as unorganized workers, thereby increasing the ambit of welfare provisions for all kind of workers. However, Aadhar is mandatory for availing of these benefits. [4]
  4. Floor Wages: The Code on Wages has introduced the term ‘floor wages’, whereby the government will fix wages based on the standards of workers, below which neither Central nor State Government could fix the minimum wages of the workers and the same has to be revised within five years. It also restricts both Governments from decreasing the minimum wage if it is already greater than the prescribed floor wages.
    These provisions have to apply to all the employees irrespective of their wages ceiling and sector. The wages must be mandatorily paid via bank transfer or online, and express permission will be required for using any other mode.[5]
  5. Recognition of Trade Unions: For the first time, there has been a provision introduced for the recognition of trade unions as ‘negotiation unions’ or ‘negotiating councils’.[6]
  6. Enactment of Standing Order or Service Rules: There has been an increase in the requirement of the minimum number of workers from 100 to 300 for defining the standing order or service rules as per which the service condition of a worker has to be governed including provisions on hire-fire, retrenchment, etc.[7]
  7. Mandatory notice for Strike and Lock-out: Now, workers are required to send a prior notice before going on strike or lock-out in any establishment. The validity of the notice for a strike has been increased from 42 days to 60 days.[8]
  8. Changes in dispute resolution mechanism: The Code has abolished the reference system and all other adjudicating bodies except the Industrial Tribunal which will now deal with all industrial disputes. The new Industrial Tribunal will also consist of an administrative member along with a judicial member for some specific cases as prescribed in the Rules.[9]
  9. Changes in working conditions: The worker can avail of 180 days of leave annually and has to work for 6 days a week and 8 hours per day. However, the Central Government has to decide the maximum working hours for mine workers. Further, the Central Government can prescribe working journalists a maximum of 144 hours of work during four consecutive weeks and not less than twenty-four consecutive hours of rest during seven consecutive days.[10]
  10. Employment of Women: Women can consent to work in any employment and work during the night shift. However, if the employment consists of dangerous operations, the Central Government can make rules to be followed by the employer to provide safety and facility to the women.[11]

Endnotes:

  1. New Labour Code for New India: Biggest Labour Reforms in India.
  2. Overview of Labour Law Reforms.
  3. The Industrial Relations Code, 2020, The Occupational Safety, Health, and Working Conditions Code, 2020, and The Code on Social Security, 2020.
  4. The Code on Wages, 2019.
  5. id.
  6. The Industrial Relations Code, 2020.
  7. id.
  8. id.
  9. id.
  10. The Occupational Safety, Health, and Working Conditions Code, 2020.
  11. id.