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Labour Law Reforms Bills in India

Labour Law Reforms

In September 2020, the Indian Parliament approved three labor code bills with the aim of simplifying and consolidating the numerous labor laws in the country. This is a significant topic for the UPSC exam, as it’s relevant not just for the political aspect but also for understanding social issues. In this article about labor reforms, you can explore the details of the Four Labor Codes that were passed by the Parliament.

Labour Law Reforms Bills Background

In India, labor laws fall under the jurisdiction of both the central government and state legislatures since it’s a part of the Concurrent List. This means that both the Parliament and state authorities can make rules regarding labor. Before the new labor codes came into effect, there were more than 40 central labor laws and over 100 state labor laws in place.

In 2002, the Second National Commission on Labor recommended reorganizing these laws into categories like industrial relations, wages, social security, safety, and welfare and working conditions. They made this suggestion because the existing labor laws were outdated, complicated, and had inconsistent definitions. The Commission proposed simplifying the labor codes to ensure clarity and consistency.

What are the 3 bills?

The 3 bills which were passed are:

  1. Industrial Relations Code, 2020
  2. Code on Occupational Safety, Health & Working Conditions Code, 2020 &
  3. Social Security Code, 2020

Code on Wages

Name of the CodeAmalgamated laws
Wage Code4 laws
The Payment of Wages Act, 1936
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Equal Remuneration Act, 1976
IR Code3 laws
The Trade Unions Act, 1926
The Industrial Employment (Standing orders) Act, 1946
The Industrial Disputes Act, 1947
OSH Code13 laws
The Factories Act, 1948
The Plantations Labour Act, 1951
The Mines Act, 1952
The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
The Working Journalists (Fixation of Rates of Wages) Act, 1958
The Motor Transport Workers Act, 1961
The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
The Contract Labour (Regulation and Abolition) Act, 1970
The Sales Promotion Employees (Conditions of Service) Act, 1976
The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
The Dock Workers (Safety, Health and Welfare) Act, 1986
The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
Social Security  Code9 laws
The Employees’ Compensation Act, 1923
The Employees’ State Insurance Act, 1948
The Employees Provident Fund and Miscellaneous Provisions Act, 1952
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
The Maternity Benefit Act, 1961
The Payment of Gratuity Act, 1972
The Cine Workers Welfare Fund Act, 1981
The Building and Other Construction Workers Welfare Cess Act, 1996
The Unorganised Workers’ Social Security Act, 2008

Key Features of these Bills

 (A) Social Security Code, 2020

  • Now, ESIC (Employee State Insurance Corporation) will be available in all 740 districts, whereas previously, it was only in 566 districts.
  • EPFO (Employees’ Provident Fund Organization) coverage will extend to establishments with 20 or more workers, as opposed to only those specified in the Schedule.
  • They’ve introduced plans to provide better social security for unorganized sector workers through various schemes. They’ll set up a “Social Security Fund” to fund these schemes.
  • The new Social Security Code also covers workers in emerging employment categories like platform or gig workers.
  • Fixed Term Employees will now be eligible for gratuity, and there won’t be any minimum service period required.
  • To create a national database of unorganized sector workers, they will be able to register online through a simple self-certification process.

 (B) Occupational Safety, Health & Working Conditions Code, 2020

  • Employees of a certain age can enjoy a yearly health checkup provided by their employer, free of charge.
  • Workers are entitled to receive an official appointment letter when they are hired for the first time, ensuring their legal rights are protected.
  • Now, not just actors in films but also individuals in the film industry, like cine workers, are recognized as audio-visual workers under the OSH code, extending workplace safety to a broader group of professionals.

(C)  Industrial Relations Code, 2020

  • Migrant workers will have access to a helpline to address their issues and concerns, making their lives easier.
  • A national database of migrant workers will be created, helping to streamline and manage their information.
  • Workers will be entitled to accrue one day of leave for every 20 days worked, reducing the required working days from 240 to 180.
  • Women will have the opportunity to work at night in any sector, provided their safety is ensured by their employer and they give their consent.
  • In case of a worker’s death or injury due to a workplace accident, at least 50% of the penalty will be given to the worker’s family, in addition to the Employees Compensation.
  • A “Social Security Fund” will be established to provide support to 40 crore unorganized workers, including GIG and platform workers, aiming to achieve universal social security coverage.
  • The Occupational Safety & Health Code will now cover workers in the IT and Service Sector, ensuring their safety and well-being.
  • Strikes will require a 14-day notice, promoting the resolution of issues through amicable solutions within that period.

Read Also: Nano Fertilizers: Revolutionizing Agriculture in India

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