KANIKA PARASHAR
ASSISTANT PROFESSOR
- 2019 Code on Wages: The Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act, and Equal Remuneration Act are all combined under this code. It creates a standard definition of wages and guarantees that all worker groups receive their payments on time. The code also stresses equitable compensation for men and women doing the same work and establishes a national minimum wage.
- 2020 Industrial Relations Code: This code, which combines the Trade Unions Act, Industrial Employment (Standing Orders) Act, and Industrial Disputes Act, regulates employment conditions, trade unions, and dispute settlement. In an effort to lessen industrial unrest and promote a more flexible labour market, it makes reforms such increasing the bar for obtaining government approval prior to layoffs or strikes.
- Social Security Code, 2020: Nine social security legislation, such as the Maternity Benefit Act, the Employees’ Provident Fund Act, and the Employees’ State Insurance Act, are combined under this code. It creates a social security fund for unorganized workers, broadens the scope of social security coverage to include gig and platform workers, and streamlines employer and employee payment procedures.
- The 2020 Occupational Safety, Health, and Working Conditions Code: This code combines thirteen statutes related to workplace welfare, health, and safety. It covers measures for the welfare of migrant workers, mandates yearly health examinations for hazardous workers, and applies to all businesses with ten or more employees (formerly twenty or more).
Important Aspects and Consequences
- Uniformity and Simplicity: The government has simplified labour legislation by combining several laws into a few codes. Employers and employees can better grasp their rights and responsibilities with uniform definitions and procedures.
- Flexibility for Employers: The Industrial Relations Code gives firms, particularly major corporations, more operational flexibility by raising the government permission threshold for layoffs and retrenchments from 100 to 300 employees. By lowering administrative barriers, this modification is meant to promote investment and employment growth.
- Incorporating Workers in the Informal Sector: Extending social security benefits to gig, platform, and unorganized sector workers—who make up a sizable portion of India’s workforce—was made possible by the Social Security Code. Acknowledging the shifting nature of labour in the digital economy is reflected in this extension.
- Focus on Women and Equal Pay: Gender equality in the workplace is reinforced by the Code on Wages, which expressly requires equal compensation for men and women. Additionally, it introduces rules for prompt salary payment, which is essential for the financial stability of employees.
- Improved Welfare and Safety of Workers: In an effort to promote safer and healthier workplaces, the Occupational Safety, Health, and Working Conditions Code expands the scope of safety requirements, incorporates provisions for yearly health examinations, and enhances welfare measures.
Difficulties and Reactions: The revised labour regulations have drawn criticism from a number of groups despite their progressive intent:
- Rights and Representation of Workers: Raising the bar for strikes and layoffs, according to certain trade unions, diminishes collective bargaining power and dilutes workers’ rights. They worry that this would result in fewer worker safeguards and employment instability.
- Implementation and Enforcement: Efficient implementation is critical to the codes’ success. Ensuring uniform application is still difficult given India’s varied economic landscape and various state-level enforcement capacities.
- Central versus State Jurisdiction: In India, labour is a concurrent topic, which means that both the federal and state governments have the authority to enact laws. For the codes to be adopted smoothly and to prevent contradictory regulations, coordination between the federal government and the states is crucial.
- Awareness and Capacity Building: It’s possible that many employers, particularly those in the unorganized sector, lack the knowledge or ability to adhere to the new rules. To ensure a seamless transition, training and support systems will be required.
Effects on the Economy and Labour Market
The labour market in India is anticipated to be significantly impacted by the new labour codes:
- Workforce Formalization: Better job security, benefits, and working conditions can result from formal employment, which is encouraged by easier compliance and increased social security coverage.
- Attracting Investment: Unambiguous and unified labour rules enhance the business climate and draw in both foreign and domestic investment, which is essential for job creation and economic expansion.
- Social Security and Worker Protection: Improved social security benefits raise the standard of living for workers, especially those in gig economy and informal employment, and promote inclusive growth.
- The climate of industrial relations: By striking a balance between worker protection and business flexibility, the regulations may lessen labour disputes and promote a more cooperative workplace.
In conclusion:
The new labour rules in India are part of a broader reform aimed at updating and harmonizing labour laws to reflect modern social and economic realities. These laws have the potential to revolutionize the Indian labour market by streamlining the legal system, expanding worker safeguards, and encouraging ease of doing business. However, successful implementation, stakeholder participation, and continuous adaptation to new difficulties will be necessary for their eventual success.
