New Labour Laws In India

 · 6 mins read

India’s labour laws have been under discussion over the past few years. The pandemic has also produced a plethora of financial opportunities. The working environment has also suffered. As a result, numerous state governments have started the process of updating their labour laws in order to support efforts to create jobs as well as prepare for the arrival of investment. Investigating the state of Indian labour law is appropriate in this circumstance.


• British Management

The protection of the interests of British enterprises was the primary objective of the industrial and labour legislation passed by the British. British economic interests were given top attention while some of these early pieces of law were being written.

The first British labour laws to create eight hours of work, prohibit child labour, restrict the employment of women in nocturnal jobs, and implement overtime pay for work over eight hours were the Factories Acts of 1883 and 1893.

The first Indian law to regulate the relationship between an employer and his employees was the Trade Dispute Act of 1929. (Act 7 of 1929). There are limitations on the use of strikes and lockouts in this Act, but there is no conflict resolution process.

• Post-independence labour legislation

The Industrial Disputes Act of 1947 served as the cornerstone of free India’s labour law system since independent India demanded a clear cooperation between labour and business. All participants in a tripartite conference in December 1947 unanimously supported the establishment of this collaboration. At this conference, labour would receive a fair wage and working conditions in exchange for capital receiving the harmonious labor’s collaboration for continuous production and higher productivity as part of the strategy for national economic development.

The British Raj is where many labour law provisions got their start. But when times changed, many of them either lost their effectiveness or ceased to be relevant. These clauses created challenges for workers rather than serving to defend their interests. Workers have to complete four forms due to the complex web of laws in order to claim a single benefit. As a result, the current administration has repealed the outdated labour laws. 4 Labour Codes now exist as a codification of 29 Labor Laws.

• New Labour Law Codes

New 4 Codes are advantageous to everyone The Central Government has combined 4 laws in the Wage Code, 9 laws in the Social Security Code, 13 laws in the Occupational Safety, Health and Working Conditions Code, 2020, and 3 laws in the Industrial Relations Code to ensure workers’ rights to minimum wages. The Central Government has taken steps to fundamentally alter the standard of living for employees by securing the passage of the Bills by the Parliament. The impact on workers and nation-building will be favourable and far-reaching. The country’s ease of doing business will improve as a result of these labour reforms. The production of employees and the development of new jobs will both improve. Both organised and unorganised sector workers will be able to take use of these four labour codes. All employees will now have access to Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS), and coverage for all medical benefits under Employees’ Insurance.

The Social Security Act, the Industrial Relations Act, the Code on Wages, and the Code on Occupational Safety, Health, and Working Conditions will all replace the current 29 labour laws. The 50 crore workers in India make up more than 90% of the unorganised sector. And the government wants to make sure that everyone has access to the protections of social security and minimum wage legislation through these codes.

The Center and the States both need to set the regulations because labour is a concurrent concern. No state has notified the necessary rules under these statutes, despite the Center notifying them in September 2020. The draught rules have only been released by 12 states so far. The codes will therefore be put into effect as soon as all the states agree. Let’s now examine each of these codes in turn.

The Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act, 1965, and the Equal Remuneration Act are all incorporated into the Code on Wages, which was notified in August 2019.

It is applicable to all businesses and workers in both the organised and unorganised sectors. This code envisions the timely wage payment and minimum wage requirements being applied uniformly to all employees. It introduces the idea of a floor pay, which will be decided by the Center after taking into account the workers’ minimal standards of living, which may vary depending on where they are employed. Under no circumstances may the state government set a minimum wage that is less than the floor rate established by the federal government. The code forbids discrimination in the remuneration paid to men and women for performing the same work.

Nine statutes are merged into the Code on Social Security, which gives the Center the authority to announce various social security programmes including the EPF, EPS, and ESI for the benefit of workers in all industries. Additionally, it gives the Center the authority to create any additional programmes for family members of self-employed, unorganised, gig, and platform employees. Under this legislation, employers with more than 20 employees are required to post open positions online. The Code contains provisions for the establishment of a social security fund for unorganised sector employees. A four-day workweek may be available to employees, per some reports, as long as the total number of working hours for the full week is at least 48.

The Code on Industrial Relations combines three previous laws and broadens the definition of a worker to encompass anyone working in physical, technical, operational, and clerical jobs, whether they are skilled or unskilled. Additionally, individuals working in managerial positions and making less than Rs. 18,000 per month have been included in the criteria. The code adds a new clause for fixed-term employment that gives employers the freedom to hire someone based on a written contract. Employees on a fixed-term contract will receive the same perks as permanent workers.

Additionally, the new industrial relations legislation would make it easier to conduct business by allowing companies with up to 300 employees to proceed with layoffs, retrenchments, and closures without seeking approval from the government. Currently, no company with fewer than 100 employees is required to obtain government approval prior to conducting layoffs, retrenchments, or closing. Last but not least, the Occupational Safety, Health and Working Conditions (OSH) Code, which unifies 13 current labour regulations, is applicable to factories with at least 20 employees when manufacturing is done with the use of electricity and 40 employees when manufacturing is done manually.

This rule mandates that employers give free annual health examinations or tests to specific kinds of workers and ensure that the workplace is free of hazards that could injure or afflict them with occupational diseases. Employers are required to give interstate migrant workers a yearly travel stipend if they must travel back and forth to their home state. Furthermore, it is now required to give the employees appointment letters.

Some of these codes’ clauses have also drawn criticism, such as the one that permits businesses with up to 300 employees to retrench and close without getting approval from the government. Experts do, however, agree that these reforms will open the door for worker welfare in both organised and unorganised sectors. They will go a long way toward resolving both the companies’ and the workers’ worries.

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