THE ADVENT OF NEW LABOUR CODES

The new codes are the demand of the changing time and changing requirements. It balances the labour welfare and industry welfare,” – Santosh Gangwar, Labour and Employment Minister

A country like India when observed chronologically, would churn out that labour initially was unskilled and unempowered. However, In the early two decades of economic liberalization, the advent of skilled and unskilled labour instantaneously stimulated India’s fast-paced economic growth. With growth petering, unemployment seeded its root amongst the young labour ensuing a deep and renewed interest in amending labour law legislations.

The Parliament of India has now asserted to new versions of three labour codes — Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020. These labour codes have also been duly signed by the President of India and are awaiting drafting of rules before nationwide implementation can be incited. It was in 2003 that these labour law reforms were initially recommended. So, it has taken 17 years to see the light of day

The idea behind bringing these new labour codes into motion was ingeniously curated to broaden and radicalise the ambit of social security. These new labour codes have proposed measures that will contribute to rendering greater flexibility to employers for seamless operations in terms of inducting employees in their company and outlining their exit policy with minimal government interference. These modern labour laws are meant to make doing business easier in India. However, the fundamental question that prevails is: Will these contemporary codes bring about a significant difference to India’s diverse and intricate labour markets?

Let us examine and observe to understand the paradigm of these new labour codes to find out the answer to the above question.

The three codes on — social security, industrial relations and occupational safety bring about increased flexibility in doing business for industries, it shall have a direct impact on hiring and firing, it will also ensure that industrial strikes are curbed to an extent whereby trends of fixed-term employment shall be initiated, and thereby reducing the influence of trade unions and expanding social security net for informal sector workers.

The new law on social security brings together the provident fund (PF), the employees’ state insurance (ESI), maternity benefits, gratuity and other entitlements under a simplified single law.

The second law on occupational safety likewise consolidates all laws relating to health and hazardous working conditions. It clamps the liability on the employer and the contractor and makes public distribution benefits (PDS) transferable for migrant workers. It also cites numerous toll-free numbers and assistance cells to help free bonded labour.

The third law, which is the Industrial Relations Code of 2020, has redefined the terms “employer”, “employee” and “worker”. It has moreover given a new definition for “strike” that forthwith comprises mass casual leave by 50% of the workforce employed by any firm.

The prelude of these labour reforms has been welcomed by the industry. The impetus, which has been built for over six years, has finally led to substantive reforms that will thoroughly impact both workers and industry. The labour reforms will inevitably boost entrepreneurship and investments and are a vital step for reviving India’s economy.