All About the Labour Law Reforms in India Passed by the Parliament

The Lok Sabha passed new Labour Law Codes on Monday, and Rajya Sabha passed it on Wednesday. The new labour codes contain several game-changing provisions to reform the current labour laws. The Rajya Sabha passed three labour bills for reforming the labour laws in the country.

The three labour bills passed are the Industrial Relations Code 2020, Code on Occupational Safety, Health & Working Conditions Code 2020 and Social Security Code 2020. The parliament has already passed the Wage Code. These three labour codes, along with Wage Code consolidate and comprise the present labour laws. They contain the current twenty-nine labour laws in a simplified, easy to understand and transparent manner. 

With parliament approving these four codes, it replaces the current twenty-nine labour laws with just four labour codes throughout the country subsequently. The Labour Minister Santosh Gangwar said in Rajya Sabha at the time of passing the labour codes that “It’s the demand of the changing time and changing requirements. It balances the labour welfare and industry welfare.”

The highlights of the three labour codes are many. They contain several new clauses which are not present in the current labour laws. The new labour codes envisage covering 50 crore workers from the organised, unorganised and self-employed sector for minimum wages. It widens the social security net of ESIC and EPFO to open for all workers and also the self-employed sector.

Also Read: Parliament Passes Essential Commodities (Amendment) Bill 2020

These codes aim to broaden the universal social security coverage by setting up a ‘Social Security Fund’ for 40 crore unorganised workers along with GIG and platform workers. Even the plantation workers will receive ESIC benefits along with GIG and platform workers. 

These three codes also provide to minimise the pay parity to women workers as compared to their male counterparts. The fixed-term employee gets the same service condition, gratuity, leave and social security as that of the regular employee. In case of any accident takes place in the workplace, a 50% penalty to be paid by the company for workers. A ‘National Occupational Safety and Health Board’ will be set up to provide an international level safety environment. The changes will include Digital and Electronic Media in the definition of working journalists. 

The present labour law covers only the workers bought by contractors. Now, these codes cover all migrant workers. A database on migrant workers is to be created through the law to help in better targeting, skill mapping and utilisation of Government Schemes by these workers. Migrant workers will get a journey allowance from employers to visit home town once a year. It provides for setting up helpline grievances for them. 

The new labour codes promote harmonious industrial relations to achieve higher productivity and more employment generation. They establish a transparent and straightforward mechanism to reduce to one registration, one licence and one return for all four codes. The Inspector under the labour laws to be amended to be the Inspector-cum-Facilitator. It also introduces a Random, Web-Based Inspection System to remove Inspector Raj.

The four new labour codes which consolidate twenty-nine present labour laws introduce historical changes in labour laws of the country. These codes provide labour welfare reforms in the country which did not happen in the last 73 years.

The new labour code provides for simplified laws, replacing many current labour laws which complicated matters as they were too many provisions. The current labour laws will allow flexibility in doing business, hiring and firing and making strikes difficult in industries. They promote fixed-term employment, reduces the influence of trade unions and expands the social security net for all workers.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in