Article by – Rishab

The implementation of new 4 labour laws are one of the most discussed topics these days. Most of the employees working in the organised sector and unorganised sector are curious to know about the reforms and the impact of reforms on their present jobs.

India,a labour surplus economy has cheap and skilled labour should be protective of its workers rights but the reforms in labour law was major demand by foreign investors for their business operations in india.Employers in india and trade unions were also aspecting such reforms because the previous labour laws were called too restrictive by some employers which create hindrance in the business growth and expansion.

The central government on 23rd sep 2020 passed the 3 labour law reforms bill in parliament.the Wage code bill was already passed by the parliament in 2019.the labour law in india comes under concurrent list which means that both central and state government can make laws on it.The government objective is to simplify and modernise the labour regulation.

The 4 labour code to be implemented by the government are:

1:-Code on wages bill 2019

2:-Occupational safety health and working conditions code 2020

3:-Code on social security 2020

4:-Industrial relations code 2020

Code on wages bill 2019

The main feature of this bill is that central government will set national minimum wage floor which will be followed across the country.different state government  cannot set minimum wages lower than the national minimum wage.

The bill also introduces the feature that overtime shall be paid to the employees if he works 15 min more than the normal working hours and the overtime pay shall be at least twice the normal rate of wages. The bill also allows setting of an appellate authority for speedy resolutions of any disputes which arises between the employers and employees

Occupational safety,health and working conditions code 2020

This bill replaces the 13 existing labour laws related to safety and health and define new provisions regarding inter state migrant workers.The bill define a worker as inter state migrant workers if he comes to another state for employment and earn upto rs 18000 per month.The code also allows staffing firms to hold a single license for recruiting workers on contract basis across different geographical locations instead of multiple licenses as required earlier.

Code on social security 2020

For the first time,the code on social security tends to provide health and income security to all workers employed in the unorganised sector.Earlier this social security code provisions were applicable to the workers of organised sector,but now all the migrant workers, gig workers and platform workers will be covered under the code on social security.Almost 50 crores employees working in unorganised sector will get benefit from this.

The bill also proposes to set up a national social security board having the objective of giving advice and recommendations to the central government for formulating schemes for the organized workers, unorganized workers, gig and platform workers. Also Aggregators employing gig workers will have to contribute 1-2 percent of their annual turnover for social security.

Industrial Relations code 2020

This code is the most discussed and debated bill among the four labour codes proposed by the government.

The main purpose of this bill is to improve the working conditions of the contract workers and bring them on par with the regular employees.This code merges 3 central labour acts including the trade union act 1926,industrial dispute act 1947 and the industrial employment act 1946.The code also proposes fixed term contract employment structure so that employers would not deal with any third party contractors but could hire workers on contract for a fixed tenure.

The most debated point on this bill is making the hire and fire policy easy. The government has increased the threshold limit of 100 workers to 300 workers employed in organisation, then the employer can lay off workers without the government permission. The code also prohibits strike by trade unions without prior notice. The unions have to give notice informing about the strike prior 60 days.

According to trade unions this has made their right to protest and strike difficult.The new industrial relations code also made certain provisions to define trade unions.the code defines that if there is 1 trade union in organisation then this particular union will be the sole negotiator with employer,but if there is more than 1 trade union then union which has majority support with 51%percent employees,then that particular union will be the negotiating union.

Government has decided to implement these labour laws from 2021.Will these new labour laws be beneficial for the workers and trade unions, it will depend on how well they are executed and implemented by the government and employers.