Nehal Mhatre.

BBA Sem 6

Industrial Relations and Labour Laws

Q. Analyse the videos

1) Three New Labour Code

The new set of regulations consolidates 44 labour laws under 4 categories of Codes name.
The Union government has claimed that the four new labour codes—the Code on Wages, 2019; the
Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code,
2020; and the Code on Social Security, 2020 are in the interest of the nation.

2) Difference between old labour and new labour

Old Labour New Labour

Working class 'Big tent' politics

Managed economy Market economy

Social justice Social inclusion

Universal benefits Targeted benefits

3) The COVID-19 pandemic struck India at a time when its economy was already suffering from
muted growth due to sluggish demand in the domestic market. The immediate impact of the
outbreak included sudden surges in demand for essential goods and services, a heightening
of the healthcare and the financial crisis, reduced employment opportunities, and a steep
decline in demand for non-essential goods and services.The Indian government’s decision of
locking down 1.3 billion people has pushed the country’s domestic economy into a dark and
unnerving zone, severely impacting small and medium enterprises and unorganised retailers.
Global financial institutions have changed the outlook of India’s economic growth and lowered
the country’s GDP growth target post the coronavirus outbreak.Net scribes took a closer look
at the effects of the coronavirus on the Indian retail industry to reveal the current scenario and
what to expect in the coming months.
 4) Michael porter 5 forces model

What Are Porter's Five Forces?

Porter's Five Forces is a model that identifies and analyses five competitive forces that shape every
industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is
frequently used to identify an industry's structure to determine corporate strategy. Porter's model can
be applied to any segments of the economy to understand the level of competition within the industry
and enhance a company's long-term profitability. The Five Forces model is named after Harvard
Business School professor, Michael E. Porter.

Understanding Porter's Five Forces

Porter's Five Forces is a business analysis model that helps to explain why various industries are able
to sustain different levels of profitability. The model was published in Michael E. Porter's book,
"Competitive Strategy: Techniques for Analysing Industries and Competitors" in 1980.1 The Five
Forces model is widely used to analyse the industry structure of a company as well as its corporate
strategy. Porter identified five undeniable forces that play a part in shaping every market and industry
in the world, with some caveats. The five forces are frequently used to measure competition intensity,
attractiveness, and profitability of an industry or market.

Porter's five forces are:

1. Competition in the industry

2. Potential of new entrants into the industry

3. Power of suppliers

4. Power of customers

5. Threat of substitute products1

Competition in the Industry

The first of the five forces refers to the number of competitors and their ability to undercut a company.
The larger the number of competitors, along with the number of equivalent products and services they
offer, the lesser the power of a company. Suppliers and buyers seek out a company's competition if
they are able to offer a better deal or lower prices. Conversely, when competitive rivalry is low, a
company has greater power to charge higher prices and set the terms of deals to achieve higher sales
and profits.

Potential of New Entrants Into an Industry

A company's power is also affected by the force of new entrants into its market. The less time and
money it costs for a competitor to enter a company's market and be an effective competitor, the more
an established company's position could be significantly weakened. An industry with strong barriers to
entry is ideal for existing companies within that industry since the company would be able to charge
higher prices and negotiate better terms.

Power of Suppliers
The next factor in the five forces model addresses how easily suppliers can drive up the cost of
inputs. It is affected by the number of suppliers of key inputs of a good or service, how unique these
inputs are, and how much it would cost a company to switch to another supplier. The fewer suppliers
to an industry, the more a company would depend on a supplier. As a result, the supplier has more
power and can drive up input costs and push for other advantages in trade. On the other hand, when
there are many suppliers or low switching costs between rival suppliers, a company can keep its input
costs lower and enhance its profits.
Power of Customers
The ability that customers have to drive prices lower or their level of power is one of the five forces. It
is affected by how many buyers or customers a company has, how significant each customer is, and
how much it would cost a company to find new customers or markets for its output. A smaller and
more powerful client base means that each customer has more power to negotiate for lower prices
and better deals. A company that has many, smaller, independent customers will have an easier time
charging higher prices to increase profitability.

Threat of Substitutes

The last of the five forces focuses on substitutes. Substitute goods or services that can be used in
place of a company's products or services pose a threat. Companies that produce goods or services
for which there are no close substitutes will have more power to increase prices and lock in favourable
terms. When close substitutes are available, customers will have the option to forgo buying a
company's product, and a company's power can be weakened.

Understanding Porter's Five Forces and how they apply to an industry, can enable a company to
adjust its business strategy to better use its resources to generate higher earnings for its investors.
5)The top 4 labour laws

1. The Trade Unions Act, 1926:-

Trade unions are a very strong medium to safe the rights of the employees. These unions have the power to
compel higher management to accept their reasonable demands.

Article 19(1)(c) of the Indian Constitution gives everyone the right "to form associations or unions". The Trade
Unions Act 1926, amended in 2001 and contains rules on governance and general rights of trade unions.
2. The Payment of Wages Act 1936:-
This act ensures that workers must get wages/salaries on time and without any unauthorised deductions. Section
6 of the Wages Act 1936 says that workers must be paid in money rather than in kind.
3. Industrial Disputes Act 1947:-
This act has the provisions regarding the fair dismissal of permanent employees.
As per this law, a worker who has been employed for more than a year can only be dismissed if permission is
sought from and granted by the appropriate government office/concerned authority.
A worker must be given valid reasons before dismissal. An employee of permanent job nature can only be
terminated for proven misconduct or for habitual absence from the office.
4. Minimum Wages Act, 1948
This act ensures minimum wage/salary to workers of different economic sectors. State and Central governments
have the power to decide wages according to the kind of work and location.

This wage may range between as much as Rs 143 to 1120/ day. This minimum wage can be different in states to
states.

The average per day wage rate for unskilled work under the MGNREGA is set to rise by 11% from Rs. 182 to
Rs. 202 for 2020-21.

A MGNREGA worker gets Rs 258/day in Dadra and Nagar Haveli while Rs 238 in Maharashtra and Rs 204 in
West Bengal.