New Indian Labour Codes: a short analysis

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“A true and nonviolent combination of labour would act like a magnet attracting to it all the needed capital.” – Mahatma Gandhi

In reality, the labour system is the pillar of a country. In such a third-world country as India, it is so true. In the legislation, the labour system is regulated by the Labour Law. Now we may have a question that why this law is made? The only reason behind this is felt that there must be a law between the labour class and the owner class. Then both of them would never cross their limitations. There will be no conflicts. Moreover, it’s about the rights of the labour societies as many of them belong to the lower classes.

Indian labour law has a link building role to the independence movement of India. When India was under British regulations, labour rights, trade unions, and freedom of association were all directed by the:

  • Indian Slavery Act, 1843
  • Societies Registration Act, 1860
  • Co-operative Societies Act, 1912
  • Indian Trade Unions Act, 1926
  • The Trades Disputes Act, 1929
Labour codes
Daily wages labour

But later, the workers sought better conditions. For their rights, they fought and earned freedom in 1947. The newly formed government decided to give relaxation to the workers, labours. In 1950 the government included the labour law in the Constitution of India. They highlighted the matters of daily wages, equalities, rights of trade unions, etc.

Introduction of New Labour Codes:

The Parliament of India has passed 4 labour codes in the 2019 and 2020 sessions. These four codes will replace 29 existing labour laws so that they get easy access.

  • The Code on Wages (2019):  

Wage is the only root that connects a labourer to his work. This the basic need of a worker from his ‘Malik’.

The Indian Labour Law introduced this Code in the Loksabha by the Labour Minister, Mr. Santosh Ganwar. ‘Code on Wages’ is to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is enacted. This Code replaces the following 4 previous laws –

(A) The Payment of Wages Act (1936),
(B) The Minimum Wages Act (1948),
(C) The Payment of Bonus Act (1965),
(D) The Equal Remuneration Act (1976)

  • The Industrial Relations Code (2020): 

Industrial Relation’ or ‘Employment Relation’ is a link building design among the employer, employee, trade unions, labour organisations, and the state in a given socio-economic context. It takes care of the relationships and boundaries of these classes. In the pre-independence period in India, industrial relations were unstable. The frail relationship between the rulers and the natives did never let them get strong. In fact, after the freedom, there was not a smooth relation working out. The interference of state between employer and employee was a matter of irritation. That was also a fact which was not letting the employment relation stable. Gradually, various triangular and bipartite institutions came up to help out the state intervention in the industrial relation system. The Industrial Relations Code includes and improves the following acts:

(A) The Industrial Disputes Act (1947),
(B) The Trade Unions Act (1926) and
(C) The Industrial Employment (Standing Orders) Act (1946)

  • The Code on Social Security (2020): 

Social Security ’ is something that assures an employee to stay tuned to his job. It reassures about the secured futures.

India’s social security system is composed of several schemes and programs. It is spread throughout a variety of laws and regulations. Generally, India’s social security schemes cover the following types-

  1. Pension,
  2. Health Insurance and Medical Benefits,
  3. Disability Benefit,
  4. Maternity Benefit,
  5. Gratuity.
Unorganized sector labour

Social security has a powerful impact on all levels of society. It provides the workers and their families’ access to health care and protection against loss of income. It does subsume the following enactments-

(A) The Employees’ Compensation Act (1923),
(B) The Employees’ State Insurance Act (1948),
(C) The Employees’ Provident Funds and Miscellaneous Provisions Act (1952).
(D) The Employment Exchanges (Compulsory Notification of Vacancies) Act (1959),
(E) The Maternity Benefit Act (1961),
(F) The Payment of Gratuity Act (1972),
(G) The Cine- Workers Welfare Fund Act (1981),
(H) The Building and Other Construction Workers Welfare Cess Act (1996), and
(I) The Unorganised Workers’ Social Security Act (2008)

  • The Occupational Safety, Health and Working Conditions Code (2020):

The Occupational Safety, Health and Working Conditions Code’ has a moral existence in Indian Labour Law. This code replaces 13 old laws and adds more specifications to them. The inclusion of inter-state migrant workers in the definition of worker has been done in this new code. It also has been said that a lumpsum amount of fare to be paid by the employer for the journey of the worker to his native place from the workplaces. According to the code, issuing of appointment letter is mandatory by the employer of an establishment. This code has dropped the earlier provision for temporary accommodation for workers near the worksite. It has increased the ambit limit of contractor’s employees from 20 to 50. Previously, The Factory Act 1948 used to say that any manufacturing unit as a factory if it employs 10 workers and uses electricity or 20 workers without using electrical power. Now the limitation has increased to 20 and 40 workers. Also, some new angles have opened by this new amendment. The old 13 laws which are replaced by this new labour code-

(A) The Factories Act (1948)
(B) The Contract Labour (Regulation and Abolition) Act (1970)
(C) The Mines Act (1952)
(D) The Dock Workers (Safety, Health and Welfare) Act (1986)
(E) The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act (1996)
(F) The Plantations Labour Act (1951)
(G) The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act (1979)
(H) The Working Journalist and other News Paper Employees (Conditions of Service and Miscellaneous Provision) Act (1955)
(I) The Working Journalist (Fixation of Rates of Wages) Act (1958)
(J) The Cine Workers and Cinema Theatre Workers Act (1981)
(K) The Motor Transport Workers Act (1961)
(L) The Sales Promotion Employees (Conditions of Service) Act (1976)
(M) The Beedi and Cigar Workers (Conditions of Employment) Act (1966)

Foundry Workers

The government has shown some reasons why they brought this new labour law. First of all, the previous laws were from an old era. They were needed to be updated, modernized. Secondly, there are more than 90% of establishments were not under these laws. So, they didn’t follow the rules and laws. After forcing the new codes, they will be under the provisions of the law. After emplacing these new labour codes the conditions of the labours will be upraised as it seems. The workers will enjoy their labour rights as it is believed. It will be going to push up the economic system of the country. Moreover, it can be a development booster for India. On the contrary, there are lots of arguments on these codes from the oppositions. Time will suggest whether it is beneficial or not.

About Post Author


Pritam is a young writer who has a passion of copywriting. He is pursuing his professional degree on Law & social justice. He has joined Leads Media as a contributor and sourcing brilliant writeups on politics, sports, international relations, technology, Health and on various topics. For more please watch our blog regularly.
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