Labour Code 2020 – Detailed Explanation

Labour Code 2020 consists of 4 different laws –

  • The Occupational Safety, Health and Working Conditions Code 2020
  • The Code on Social Security 2020
  • The Industrial Relations Code 2020
  • The Code on Wages 2019

Out of these 4 – Wage Code was passed by Parliament in 2019 while other other three were passed in 2020.

Labour Code 2020 - Wage Code, Industrial Safety and Welfare Code, Industrial Relations Code, Social Security Code

The Occupational Safety, Health and Working Conditions Code 2020

Occupational Safety, Health and Working Conditions Code 2020 also known as Industrial Safety & Welfare Code 2020 is a law which puts together 13 old laws. Below are some details about Industrial Safety & Welfare Code 2020.

  1. This law defines inter-state migrant workers as worker who has come on their own from one state and obtained employment in another state and also just earn up to Rs. 18,000/month. This new definition is completely different from earlier definition of contractual employment which was defined in the law.
  2. This new law will consolidate and amend laws regulating occupational safety, health and working conditions of people employed at a workplace.
  3. The government has, under the new code, allowed a single license for staffing firms to hire workers on contract across different locations instead of multiple licenses needed earlier.
  4. This law increased the threshold limit of contractor employees from 20 to 50, which could be employed by some business at one time.

The Code on Social Security 2020

Code on Social Security 2020 law combines 9 old laws together and make a new single law/code known as Social Security Law 2020. Below are some details about Social Security Law of 2020.

  1. This law intends to provide universal social security to all workers in the country either it be a unorganised sector worker or some gig worker. This will brings in large section of worker’s population in country under umbrella of social security which earlier they were devoid of.
  2. This law proposes formation of National Social Security Board which in future would be doing research and based upon that research will make recommendations to government and based upon that government would make suitable schemes for different sections of unorganised workers.
  3. Under this law, aggregators type companies like Uber, Swiggy will have to contribute 1-2 percent of their annual turnover for social security of their gig workers.

Industrial Relations Code 2020

Industrial Relations Code 2020 combines together 3 old laws and this law will consolidate and amend old laws related to Trade Unions, conditions of employment in industrial establishment or undertaking, investigation and settlement of industrial disputes.
Below are some details about Industrial Relations Code 2020.

  1. Under this new Industrial Relations Code 2020, government has raised threshold on number of employees needed in an organization.
  2. If a company of size 300 or less employees need to shutdown then it doesn’t need approval from government under Industrial Relations Code 2020, but earlier this used to be size 100 or less.
  3. Under Industrial Relations Code 2020 government has withdrawn some of old rules regarding firing of employees by an employer. So now under new law firing of employees by employers has been eased.

Why Indian Government made Labour Code 2020?

Earlier there used to be so many laws regarding Labour in India that Government finally decided to simplify this clutter of so many laws. Following are main reasons why Government decided to made new Labour Code 2020: –

  • Replacing already existing 29 labour laws with just 4 new labour codes
  • To simplify and modernise labour regulation in the country
  • For facilitating employers in doing business to boost employment growth in the country
  • Improving Ease of Doing Business metrics
  • Simplify laws regarding Workers’ rights, so that people can easily get benefits of these laws

How many laws were combined in each one of four Labour Code 2020?

In total 29 labour laws were combined together into 4 new labour codes.

  • 4 Old laws were combined as The Code on Wages 2019
  • 3 Old laws were combined as The Industrial Relations Code 2020
  • 9 Old laws were combined as The Code on Social Security 2020
  • 13 Old laws were combined as The Occupational Safety, Health and Working Conditions Code 2020

What old laws were combined as The Code on Wages 2019?

  1. Payment of Wages Act, 1936
  2. Minimum Wages Act, 1948
  3. Payment of Bonus Act, 1965
  4. Equal Renumeration Act, 1976

What old laws were combined as The Industrial Relations Code 2020?

  1. Trade Unions Act, 1926
  2. Industrial Employment Act, 1946
  3. Industrial Disputes Act, 1947

What old laws were combined as The Code on Social Security 2020?

  1. The Employees Compensation Act, 1923
  2. The Employees State Insurance Act, 1948
  3. The Employees Provident Funds and Miscellaneous Provisions Act, 1952
  4. The Employment Exchanges Act, 1959
  5. The Maternity Benefit Act, 1961
  6. The Payment of Gratuity Act, 1972
  7. The Cine Workers Welfare Fund Act, 1981
  8. The Building and Other Construction Workers Welfare Cess Act, 1996
  9. Unorganised Workers’ Social Security Act, 2008

What old laws were combined as The Occupational Safety, Health and Working Conditions Code 2020?

  1. The Factories Act, 1948
  2. The Plantations Labour Act, 1951
  3. The Mines Act, 1952
  4. The Working Journalists and Other Newspaper Employees Act, 1955
  5. The Working Journalists Act, 1958
  6. The Motor Transport Workers Act, 1961
  7. The Beedi and Cigar Workers Act, 1966
  8. The Contract Labour Act, 1970
  9. The Sales Promotion Employees Act, 1976
  10. The Inter-State Migrant Workmen Act, 1979
  11. The Cine Workers and Cinema Theatre Workers Act, 1981
  12. The Dock Workers Act, 1986
  13. The Building and Other Construction Workers Act, 1996

Concerns regarding Labour Code 2020

  • It will water down the labour rights for workers in small establishments having less than 300 workers.
  • Industrial Relations Code 2020 introduces new conditions for carrying out a legal strike.
  • The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only time for conciliation at present. Industrial Relations Code 2020 specifically proposes that no employee of company can go on a strike without a 60 day notice, which was not so in the old laws.
  • Doing strike against employer becomes more difficult for workers.

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