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New Labour Codes,2020

The Parliament has passed three Historic and path-breaking Labour Codes which are:
  1. Industrial Relations Code Bill, 2020
  2. Code on Social Security Bill, 2020
  3. Occupational Safety, Health and Working Conditions Code Bill, 2020
While the government proposes to increase the ambit of social security by including gig workers and inter-state migrant workers, it has also proposed measures that will provide greater flexibility to employers to hire and fire workers without government permission.

Do You Know?
  • These three bills have been re-introduced after incorporating 174 out of 233 recommendations given by Standing Committees
  • These three bills are part of four labour code envisaged incorporating 29 labour laws. First code on wages has already been enacted. All the labour laws (29 in number) being amalgamated into 4 labour codes are:
Name of the Code Amalgamated laws
Wage Code 4 laws:
  1. The Payment of Wages Act, 1936
  2. The Minimum Wages Act, 1948
  3. The Payment of Bonus Act, 1965
  4. The Equal Remuneration Act, 1976
IR Code 3 laws:
  1. The Trade Unions Act, 1926
  2. The Industrial Employment (Standing orders) Act, 1946
  3. The Industrial Disputes Act, 1947
OSH Code 13 laws:
  1. The Factories Act, 1948
  2. The Plantations Labour Act, 1951
  3. The Mines Act, 1952
  4. The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
  5. The Working Journalists (Fixation of Rates of Wages) Act, 1958
  6. The Motor Transport Workers Act, 1961
  7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  8. The Contract Labour (Regulation and Abolition) Act, 1970
  9. The Sales Promotion Employees (Conditions of Service) Act, 1976
  10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  11. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
  12. The Dock Workers (Safety, Health and Welfare) Act, 1986
  13. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
Social Security Code 9 laws:
  1. The Employees' Compensation Act, 1923
  2. The Employees' State Insurance Act, 1948
  3. The Employees Provident Fund and Miscellaneous Provisions Act, 1952
  4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  5. The Maternity Benefit Act, 1961
  6. The Payment of Gratuity Act, 1972
  7. The Cine Workers Welfare Fund Act, 1981
  8. The Building and Other Construction Workers Welfare Cess Act, 1996
  9. The Unorganised Workers' Social Security Act, 2008

The key proposals are:

In the Industrial Relations Code Bill, 2020

  • New conditions for legal strike – no person employed in an industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal and sixty days after the conclusion of such proceedings. Earlier such restrictions applied only to public utility services.
  • Raised the threshold for requirement of a standing order — rules of conduct for workmen employed in industrial establishments — from the existing 100 to 300 workers.
  • Reskilling Fund – To set up a re-skilling fund for training of retrenched workers with contribution of the employer of an amount equal to 15 days last drawn by the worker.


In the Social Security Code Bill, 2020

  • National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers
  • No more ambiguities: The bill has defined various terms like “career centre”, “aggregator”, “gig worker”, “platform worker”, “wage ceiling”, etc.
  • Social security for gig workers: Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security of workers.
  • The facility of ESIC would now be provided in all 740 districts. At present, this facility is being given in 566 districts only.
  • EPFO's coverage would be applicable on all establishments having 20 workers. At present, it was applicable only on establishments included in the Schedule.
  • Provision has been made to formulate various schemes for providing comprehensive social security to workers in the unorganised sector.
  • Work to bring newer forms of employment created with the changing technology like “platform worker or gig worker” into the ambit of social security has been done in the Social Security Code.
  • Provision for Gratuity has been made for Fixed Term Employee and there would not be any condition for minimum service period for this.
  • With the aim of making a national database for unorganised sector workers, registration of all these workers would be done on an online portal and this registration would be done on the basis of Self Certification through a simple procedure.

In the Occupational Safety, Health and Working Conditions Code Bill, 2020

  • To employ women in all establishments for all types of work. They can also work at night, that is, beyond 7 PM and before 6 AM subject to the conditions relating to safety, holiday, working hours and their consent
  • To Promote Formalisation: Issuing of appointment letter mandatorily by the employer of an establishment to promote formalisation in employment
  • Inclusion of inter-state migrant workers in the definition of worker: Inter-state migrant workers are defined as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month.
  • The proposed definition makes a distinction from the present definition of only contractual employment.
  • Portability Benefits: An Inter-State Migrant Worker has been provided with the portability to avail benefits in the destination State in respect of ration and availing benefits of building and other construction worker cess
  • However, the Code has dropped the earlier provision for temporary accommodation for workers near worksites.
  • It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.
  • Free health check-up once a year by the employer for workers which are more than a certain age.
  • Cine Workers have been designated as Audio Visual Worker so that more and more workers get covered under the OSH code. Earlier, this security was being given to artists working in films only.

What are the issues raised over the new labour codes?

  • Dilutes rights of Workers:
    Workers in small establishments (with up to 300 workers) will have their rights watered down with no protection of trade unions, labour laws
     
  • Workers safety safeguards diluted:
    The new rules will enable companies to introduce arbitrary service conditions for workers.
     
  • .Corporate Friendly:
    The new rules provides more flexibility to employers for hiring and firing workers without government permission
     
  • Restricts Freedom of Speech:
    Restrictions on strikes and demonstrations is akin to assault on the freedom of industrial actions.
     
  • Ambiguity about reskilling Fund:
    The Code lacks clarity on the substantive and procedural aspects of reskilling Fund which will fizzle out like the National Renewal Fund in the 1990s
     
  • Women's Safety:
    Allowing women to work during night time in spite of various safeguards imposed may increase their vulnerability to sexual abuse.
     
  • The increase in the threshold for standing orders will water down the labour rights for workers in companies having less than 300 workers.
     
  • The IR Code introduces new conditions for carrying out a legal strike.
     
  • Elongating the legally permissible time frame before the workers can go on a legal strike has made a legal strike well-nigh impossible.
     
  • The IR code has expanded to cover all industrial establishments for the required notice period and other conditions for a legal strike.
     
  • The Standing Committee had recommended against the expansion of the required notice period for strike beyond the public utility services like water, electricity, and other essential services.
In the changed economic scenario post COVID-19 pandemic, the government has to balance the rights of workers and economic recovery. Favouring one over the other will impact the Country's prospects in long run. These Bills make significant changes to regulation of labour and the emp loyer-employee relationship in several ways.

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