Implementation of Biggest Labour Reforms In Independent India

New Labour Code

India is in the process of codifying 29 updated labour legislations into four new codes.

Changes, Impact and Benefits of New Labour Laws

The Code On Wages, 2019 is formulated to ensure the right of minimum wages for all 50 crore workers and also equal remuneration for both men and women working in both organised and unorganised sectors. Also, the code calls for the review of minimum wages every 5 years. It guarantees the timely payment of wages to the working class. The wage ceiling under the payment of wages act has been increased from INR 18000 to INR 24000.

To ensure the security of the workers, the Code On Social Security, 2020  was formulated. It secures rights regarding pension, insurance, gratuity, medical benefit, etc. for the working class. It regulates that contributions be made by employers and employees in a hassle-free manner. The code opens the door for benefits to the workers of unorganised sectors as well. The number of hospitals under the control of ESIC will now be increased and expanded to the district level.

The Occupational, Safety, Health and Working Conditions Code, 2020 has been formulated by subsuming 13 labour legislations. This code has addressed the inter-state Migrant Workers Act, 1979, amended and introduced new rules such as how workers can register as inter-state migrant workers and how there is no need for an appointment by the contractor. The code also provides for travelling allowance, free annual health check-ups, construction worker’s cess fund, helpline facility etc.

The Industrial Relations Code, 2020 provides for those rules and regulations formulated for industrial units and workers to ensure there arises no dispute amongst them in future. The code states that in case a worker loses their job, they will be given benefits under “Atal bimit vyakti kalyan yojana”.

The new labour laws will mostly impact the composition of salary as the in-hand salary is being decreased because the government wants more investment in provident funds. Gratuity costs are also being increased. 

The new labour codes must be implemented on a basis of need as workers are entangled in a web of numerous labour legislations. States must be asked to formulate rules and guidelines regarding the codes as soon as possible. All terms in dispute amongst states must be deliberated and resolved on an urgent basis as these codes will attract new jobs and foreign investment which are much needed for the economic revival in our country.

By – Rajeev Rambhatla, Head-Hyderabad and Akshaya, Intern