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The Newly Introduced Labour Codes

  • The newly introduced Labour Codes

Empowering workers is not just a necessity but a critical stride toward fostering a prosperous and self-reliant India. Despite 73 years of Independence, a staggering 90% of the workforce is in the unorganized sector, lacking comprehensive social security. Addressing their welfare is paramount, with a workforce exceeding 50 crores, comprising both organized and unorganized sectors. Remarkably, for the first time, a government has demonstrated genuine concern for the well-being of workers and their families across both sectors. The erstwhile labyrinth of multiple labour legislations that ensnared the working class has now been dismantled, thanks to the Central Government’s ground-breaking move to consolidate 29 Laws into 4 Codes. 

  • 2002: The Second National Commission of Labour submitted its report, emphasizing the need to consolidate multiple labour laws at the central level into 4 or 5 Labour Codes.
  • 2004-2014: No significant initiative was taken toward labour code consolidation during this period.
  • 2015-2019: The Ministry of Labour and Employment initiated extensive discussions on labour reforms. Draft Labour Codes were uploaded on the Ministry’s website for stakeholder and public consultation as part of the pre-legislative consultative policy. Nine tripartite discussions were organized during this period, inviting Central Trade Unions, Employers’ Associations, and representatives of State Governments to provide their opinions and suggestions on labour reforms.
  • GST Implementation: The brainstorming on Labour Codes gained momentum when the Goods and Services Tax (GST) was implemented as "One Nation One Tax." This was done with the strong will of Hon’ble Prime Minister Modi Ji to take tough decisions for "Sabka Sath Sabka Vikas aur Sabka Vishwas" (Collective Efforts, Inclusive Development, and Trust of All).
  • Post-GST Implementation: Labour law reforms were accelerated in alignment with the progressive thinking set forth by the GST implementation and the commitment to inclusive development.
  • 2019 or later: The four Labour Codes were introduced, consolidating 29 laws into these codes. The Bills underwent examination by the Parliamentary Standing Committee, which provided its recommendations to the Government.

To ensure workers receive fair wages and rights, the Indian Government has combined related laws into four codes. The Wage Code covers four laws; the Social Security Code includes nine laws; the Occupational Safety, Health, and Working Conditions Code, 2020 consolidates thirteen laws; and the Industrial Relations Code integrates three laws. This simplification aims to make regulations more transparent and robust in wages, social security, workplace safety, and industrial relations.

In 2019, a new Labour Code (Wage Code) was introduced to benefit workers in India. After 73 years of Independence, efforts are being made to ensure wage, social, and health security for 50 crore workers in both organized and unorganized sectors. The code guarantees minimum wages for all 50 crore workers and includes a review of minimum wages every 5 years. It ensures timely payment of wages and equal remuneration for male and female workers and extends this right to around 40 crore workers in the unorganized sector. To address regional disparities, a floor wage provision has been introduced. Determining minimum wages is now based on factors like skill level and geographical area. Additionally, the Payment of Wages Act increased the wage ceiling from Rs. 18,000 to Rs. 24,000 starting August 28, 2017.

The Social Security Code ensures that workers can access free medical treatment in ESIC (Employees’ State Insurance Corporation) hospitals and dispensaries through a modest contribution. This benefit is now extended to workers across all sectors, including the unorganized sector. ESIC facilities, including hospitals and branches, will be expanded to reach district levels, increasing coverage from 566 to all 740 districts in the country. Any worker involved in hazardous work is eligible for ESIC benefits, which extend to platform and gig workers in new technology fields. Plantation workers are also included in the ESIC coverage. Additionally, institutions operating in hazardous areas are required to register with ESIC.

The OSH Code of 2020 brings worker-friendly changes:

Inter-State Migrant Workers: Simplified registration on a national portal for legal identity and social security benefits. Employers provide an annual traveling allowance.

Worker Welfare: Mandatory appointment letters. Employers offer free annual health check-ups. Construction workers get benefits when moving across states.

One Nation - One Ration Card: Inter-State Migrant Workers access ration facilities in their working state; families access benefits in their home state.

Grievance Resolution: Helpline facilities in each state. Creation of a national database.

Leave Entitlement: Workers get one day of leave for every 20 days of work after 180 days.

Women Empowerment: Women can work in all establishments. Night work is allowed with consent, with employers ensuring safety and facilities.

The Industrial Relations Code of 2020 introduces significant measures for worker welfare, including the Atal BimitVyakti Kalyan Yojna, providing financial aid to organized sector workers facing job loss. In cases of retrenchment, workers are offered 15 days’ wages for re-skilling, directly credited to their bank accounts. The Tribunal ensures expeditious dispute resolution, committing to settling issues within a year. Industrial Tribunals are now equipped with two members for swift case disposal. Recognizing the pivotal role of Trade Unions, establishments witnessing a union with 51% votes grant it the status of the sole negotiating union authorized to make agreements with employers. When no union attains 51% votes, a negotiating council of trade unions is formed for constructive contracts with employers.

In conclusion, the New Labour Codes introduced in India mark a significant step towards enhancing the welfare and rights of workers. These codes address issues ranging from minimum wages and social security to occupational safety and health, bringing about comprehensive reforms in labour laws. By streamlining regulations, ensuring timely benefits, and prioritizing worker empowerment, the codes contribute to fostering a more equitable and progressive working environment in the country.

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