REVA UNIVERSITY

SCHOOL OF LEGAL STUDIES

NAME: SUBHASHA.S
CLASS:BA LLB 6th SEM
SRN: R21LA048
SUBJECT:LABOUR LAW-2
TOPIC: THE COMMENTARY OVER THE NEW LABOUR CODES
OF INDIA
THE COMMENTARY OVER THE NEW LABOUR CODES OF INDIA

Introduction

The New Labour Codes, enacted in September 2020, represent a significant

overhaul of the nation's labor laws and regulations. These codes seek to streamline
over 40 existing labor laws into four main codes: the Code on Wages, Code on
Social Security, Occupational Safety, Health and Working Conditions Code, and
Industrial Relations Code. They have been introduced to address a range of issues
including job security, working conditions, social security, and wages.

India's labour force has undergone considerable change over the years, with a
rapidly expanding workforce posing challenges for the government. Recognizing
the necessity for reform to foster a conducive environment for workers, the
government embarked on labor law reform efforts as early as 2015, when the
initial labor code bill was introduced. Following recommendations from a
parliamentary committee, several amendments were proposed, and the revised bill
was presented to the Lok Sabha in 2019. Despite it get passed by Parliament in
September 2020, the bill had faced delays and setbacks, including its lapse with the
dissolution of the 16th Lok Sabha. However, the government persevered and
successfully reintroduced the bill.

OBJECTIVE’S AND ITS IMPLICATIONS, IMPACTS AND PROVISO’S

The New Labour Codes were primarily introduced to enhance working conditions,
job security, and social security for the workforce. By consolidating over 40 labor
laws into four codes, they seek to simplify the regulatory framework governing
labor. This simplification is expected to facilitate better understanding and
compliance among businesses, thereby reducing associated costs. Moreover, the
streamlined structure will enhance the government's ability to enforce labor laws
effectively. The overarching goal of these codes is to strike a balance between the
interests of employers and employees. By improving the ease of doing business
and fostering a more favorable investment climate, they aim to attract foreign
investment and promote economic growth and these codes aim to simplify and
modernize the country’s labour laws and regulations and bring about significant
changes in the labour market. The purpose of these codes is to make it easier for
businesses to operate in India by lowering the costs of following rules, creating
more jobs, and making working conditions and social security better for workers.
They try to make sure that both employers and workers are treated fairly and that
worker' rights are protected. Different groups like government agencies,
employers, and workers will work together to make sure these new codes are
followed. The codes also say there will be new courts and groups to solve
problems between employers and workers. Employers have to follow the rules and
make sure their workers have a safe and healthy workplace. Workers have to
follow the rules too and do their work safely and responsibly.

THE FOUR CODES ARE:

1. The Code on Wages, 2019

2. The Occupational Safety, Health and Working Conditions Code, 2020
3. The Industrial Relations Code, 2020
4. The Code on Social Security, 2020

ANALYSIS

The New Labour Codes bring several advantages. They simplify labor laws,
cutting compliance costs for businesses. This simplification also aids government
enforcement of labor regulations. The codes strive for a fair balance between
employer and employee interests, fostering a positive environment for both. They
enhance the ease of doing business, attracting foreign investment and generating
more job opportunities. Additionally, they improve working conditions, job
security, and social security, thus elevating the standard of living for workers.

However, the codes also face criticism. Some argue they dilute labor laws,
diminishing workforce protections. Concerns arise over the ease with which
businesses can hire and fire employees, potentially reducing job security. Critics
also fear the codes weaken employee bargaining power, potentially leading to
lower wages and benefits. Moreover, they're accused of being skewed towards
employer interests, potentially neglecting worker rights and interests

One major concern regarding the codes involves the provision regarding fixed-
term employment. This provision permits employers to hire workers for specific
durations without offering the job security or benefits typically provided to regular
employees. Such a provision might encourage widespread adoption of fixed-term
contracts, potentially leading to a surge in contract workers lacking job security or
benefits. Consequently, this could contribute to increased job insecurity and a
decline in wages and benefits for workers.

Another worry pertains to the definition of migrant workers in the codes. The
current definition restricts migrant workers to those employed for up to three
months only. This limitation could exclude many migrant workers engaged for
longer periods, depriving them of access to social security benefits and other
protections enjoyed by regular employees.

Critics also point out the codes' insufficient protections for workers in the informal
sector. Without any mechanism to safeguard the rights and interests of informal
workers, who constitute a significant portion of India's workforce, exploitation in
this sector may persist, perpetuating poverty among informal workers.

1. The Code on Wages, 20191

The Wage Code, enacted on August 08, 2019, and subsequently receiving
presidential assent on September 28, 2020, aims to simplify existing labor laws
pertaining to wage payment, overtime, bonuses, and minimum wages. It
consolidates provisions from various legislations such as the Payment of Wages
Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and Equal
Remuneration Act, 1976. The implementation of this code is expected to
significantly impact industries, necessitating a thorough understanding of its key
aspects and deviations from previous regulations.

Key Highlights of the Wage Code:

Uniform Definition of Wage: The introduction of a standardized definition of

'Wages' brings consistency to wage-related matters, encompassing salary,
allowances, and other monetary components, excluding bonuses and certain
allowances.

Floor Wage: The central government is empowered to establish floor wages,

considering workers' living standards and geographical variations. Minimum
wages set by governments must surpass the floor wage, and existing minimum
wages cannot be reduced if they exceed the floor wage.

Minimum Wages: Employers are prohibited from paying wages below the
minimum wage, which is determined based on the complexity of work and
workers' skill levels. The government is mandated to review minimum wages at
least every five years.
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List of Central Labour laws under Ministry of Labour and Employment
Payment of Wages: Wages must be disbursed through various means such as coins,
currency notes, cheques, bank transfers, or electronic modes. Employers have the
discretion to determine the wage period as daily, weekly, fortnightly, or monthly.

Deductions: The Wage Code permits deductions from employee wages for
specified reasons like fines, absences, accommodation provided, or recovery of
advances, among others. However, such deductions should not exceed 50% of the
total wage.

Overall, the Wage Code introduces crucial reforms to streamline wage-related

regulations, ensuring fairness and transparency in wage practices while protecting
the interests of both employers and employees.

The Industrial Relations Code, 2020 (IR Code)2

The Industrial Relations Code, 2020 (IR Code), serves to consolidate and amend
laws pertaining to Trade Unions, employment conditions in industrial
establishments, and the resolution of industrial disputes. It amalgamates,
simplifies, and revises three key Central Labour Laws: the Industrial Disputes Act,
1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing
Orders) Act, 1946.

Key Provisions of the IR Code:

Negotiating Trade Unions: The code introduces a new framework for negotiating
trade unions or councils within industrial companies. In cases where a single union
exists within a company, that union is recognized as the sole bargaining unit,
empowered to negotiate terms with the employer. Strikes and Lockouts: The IR
Code prohibits strikes and lockouts in industrial establishments without prior

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List of Central Labour laws under Ministry of Labour and Employment
notice. It mandates that no unit shall engage in a strike without giving a 60-day
notice or within 14 days after issuing such notice.

Standing Orders Applicability: Standing orders, covering topics like employee

classification, working hours, termination, and grievance procedures, are mandated
for industrial plants with 300 or more employees. This is an increase from the
previous threshold of 100 employees.

Fixed-Term Contracts: The code allows employers to hire workers for fixed
periods, providing flexibility in employment arrangements.

Threshold Adjustment: Companies with fewer than 300 workers are exempted
from developing codes of conduct for industrial facility employees, compared to
the previous requirement for companies with up to 100 employees.

Dispute Resolution: The code proposes the establishment of two tribunals for
resolving disputes, expediting the decision-making process and ensuring timely
resolution.

Disciplinary Process Timeline: It sets a 90-day deadline for concluding internal

investigations into employee misconduct, ensuring swift disciplinary actions.

Overall, the Industrial Relations Code aims to modernize and streamline industrial
relations, providing clarity and efficiency in labor-related matters while balancing
the interests of both employers and employees.

The Occupational Safety, Health and Working Conditions Code, 2020

(OSH Code),3

3
List of Central Labour laws under Ministry of Labour and Employment
The Occupational Safety, Health and Working Conditions Code, 2020 (OSH
Code), received presidential assent on September 28, 2020. It aims to consolidate
and amend laws governing the safety, health, and working conditions of employees
in establishments. This code encompasses a wide range of standards and
procedures aimed at eliminating, mitigating, or substituting workplace hazards and
minimizing the consequences of workplace incidents The OSH Code consolidates
provisions from 13 Acts, including the Factories Act, 1948, Mines Act, 1952, and
Dock Workers (Safety, Health and Welfare) Act, 1986. It introduces amendments
to definitions such as Contract Labour, Employee, and Employer, among others.

Key Highlights of the OSH Code:

1. Workplace Safety: The code mandates that workplaces must be free from
hazards that endanger employee health, with any hazards responsibly disposed of.
Persons with impairments are prohibited from employment in the construction
sector.

2. Medical Check-Up Camps: Employers are required to conduct annual medical

check-up camps for employees as a mandatory measure.

3. Inspector-cum-Facilitators: The code authorizes the designation of Inspector-

cum-Facilitators to oversee compliance within their jurisdictions, including
conducting electronic web-based inspections and gathering necessary information.

4. National Occupational Safety and Health Advisory Board: The Central

Government is tasked with establishing a National Occupational Safety and Health
Advisory Board to provide guidance and advice.

5. Employee Welfare Programs: Employers must establish and maintain employee

welfare programs as prescribed by the Central Government.
The Social Security Code, 2020 (SS Code),4

The Social Security Code, 2020 (SS Code), aims to amend and consolidate existing
labor laws related to social security, extending benefits to employees across
various sectors. It replaces nine laws, including the Employees’ Provident Fund
and Miscellaneous Provisions Act, 1952, and the Maternity Benefit Act, 1961.

Key Highlights of the Social security Code:

1. Broad Definition of Employee: The code expands the definition of "employee"

to include contract workers and those in managerial, administrative, and
supervisory positions, ensuring broad coverage under social security schemes.

2. Interstate Migrant Workers: The definition of interstate migrant workers is

broadened to include individuals relocating from one state to another for
employment, subject to certain criteria.

3. Career Centers: The code replaces current employment transactions with career
centers offering career counseling, vocational guidance, and assistance with
entrepreneurship.

4. Enhanced Penalties: The code imposes graded penalties for offenses, with
maximum penalties reaching INR 1,00,000 and imprisonment up to three years for
subsequent violations.

5. Provident Fund Contributions: Contributions to provident funds are calculated

based on basic wages, limited to 50% of the salary.

The question of constitutionality and its functionary legitimacy in application of

these codes are been cleared through these following cases

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List of Central Labour laws under Ministry of Labour and Employment
In the case of Gujarat Mazdoor Sabha v. State of Gujarat & Others (2021) 5, the
court addressed the constitutionality of the Industrial Relations Code, 2020. It ruled
that the code did not infringe upon the fundamental rights of workers, affirming its
validity. Similarly, in All India Trade Union Congress v. Union of India (2021) 2,
the court examined the Code on Social Security, 2020. It determined that the code
did not violate workers' rights and upheld its validity.

The Uttarakhand HC Bar Association v. State of Uttarakhand & Others (2021)

3
case pertained to the constitutionality of the Occupational Safety, Health and
Working Conditions Code, 2020. The court concluded that the code did not
contravene workers' fundamental rights, thereby validating its legality.

Additionally, in Steel Authority of India Ltd. v. National Union Waterfront

Workers & Others (2021)4, the court addressed provisions in the Industrial
Relations Code, 2020, concerning the recognition of trade unions. It found that the
code established a fair and reasonable procedure for recognizing trade unions, thus
upholding its validity.

In summary, these cases have affirmed the legitimacy of the New Labour Codes,
providing guidance for their implementation and enforcement.

Conclusion

Given the significant changes introduced by the new labor codes to the existing
Employment Laws in India, it becomes crucial for establishments to assess the
implications and review the compliance requirements under each Code once they
are implemented, alongside the final rules and state amendments. These new labor

5
1. (2003)1 GLR 158
2.2019 (5) SCC 773
3.AIR 2001 SC 3527
4.AIR 2021 SCC 654
codes represent much-needed improvements to the current labor regime in the
country.

By consolidating various laws into four codes, the new labor codes aim to establish
a unified framework, simplifying the legal landscape and enhancing the ease of
doing business. This move towards "One India & One Law" is expected to reduce
ambiguity arising from conflicting definitions and provisions in multiple laws.

The ultimate objective of labor laws is to promote harmony between employers

and employees, bridging the gap between the two stakeholders. The new labor
reforms mark a significant step forward in simplifying and modernizing the labor
system, replacing the outdated regime with more streamlined processes.

However, it's important to acknowledge that these reforms tend to lean towards
being more favorable to employers. While they streamline compliance
requirements, some key terms remain undefined in the Codes, leading to certain
ambiguities. Only time will reveal the effectiveness of these Codes in the long run,
as they are implemented and tested in practice.

REFERENCES:

1. List of central labour laws under ministry of labour and employment

2. SCConline.com
3. Casemine.com
4. Mitchell, R.,MAHY,P., & GAHAN,P.(2014)Asian journal of Law and
Society
Sl.No CONTENTS Pg.No
1. Introduction

2. Objective’s and its implication

3. Analysis

4. Conclusion

5 Reference

INDEX