The Parliament passed 3 labour codes — on 

1. Code on Wages, 2019 
2. Industrial Relations Code Bill, 2020,
3. Code on Social Security Bill, 2020 and 
4. Occupational Safety, Health and Working Conditions Code Bill, 2020.

Proposing to
simplify the country’s archaic labour laws and
give impetus to economic activity without compromising with the workers’ benefits.

may have
Transformative impact on labour relations in India

The Periodic Labour Force Survey observes that 71% of regular wage/salaried workers in the non-agriculture sector did not have a written contract, and 50% were without social security cover. The new laws, by simplifying compliance, should create an incentive for workforce formalisation.

The Second National Commission on Labour (2002) recommended that the central labour laws should be integrated into groups like:

• Industrial relations
• Wages
• Social security
• Safety
• Welfare and working conditions

• Consolidation and simplification of the Complex laws: The 3 Codes simplify labour laws by subsuming 25 central labour laws that was there for 17 years.
  • big boost to industry + employment–> reduce multiplicity of definition and multiplicity of authority for businesses.
• Single Licensing Mechanism: Currently, industries have to apply for their licence under different laws–> will give fillip to industries by ushering in substantive reform in the licensing mechanism.
• Easier Dispute resolution:  Simplify archaic laws dealing with industrial disputes–> revamp the adjudication process–> pave the way for early resolution of disputes.
• Ease of Doing Business:  boost investment and improve ease of doing business–> drastically reduces complexity and internal contradictions, increases flexibility & modernizes regulations on safety/working conditions
• Other benefits for Labour:
  • Promote fixed term employment,
  • reduce influence of trade unions and
  • expand the social security net for informal sector workers.

Concerns with the Labour codes

• Against the Interests of Employees: The codes provide the liberty to industrial establishments to hire and fire their employees at will.
  • This move might enable companies to introduce arbitrary service conditions for workers.
• Free Hand to States: The central government has also attracted criticism that states have been given a free hand to exempt laws in violation of labour rights. However, the Union Labour Minister has said the labour issue is in the Concurrent list of the Constitution and therefore states have been given the flexibility to make changes as they wish.
• Affect Industrial Peace: Industrial Relation Code proposes that workers in factories will have to give a notice at least 14 days in advance to employers if they want to go on strike.
  • However, earlier the Standing Committee on Labour had recommended against the expansion of the required notice period for strike beyond the public utility services like water, electricity, natural gas, telephone and other essential services.
  • Further, Bharatiya Mazdoor Sangh has also opposed the Code, describing it as a clear attempt to diminish the role of trade unions.

Wages Code seeks to regulate wage and bonus payments 

This code replaces the following laws:

• Minimum Wages Act, 1948
• Payment of Wages Act, 1936
• Payment of Bonus Act, 1965
• Equal Remuneration Act, 1976

• code will apply to all employees.
• For all other types, the state governments will make the decisions.
• Wages include salary, allowance or any other monetary component.
  • It does not include bonuses and travelling allowances.
• Central Government will fix the floor wages considering the workers’ living standards.
  • The floor wage may vary depending on the geographical location.
• Minimum wages decided by the central or state governments should be above the floor wages
  • on the basis on geography, skill and difficulty levels of the work, etc. 
  • reviewed by the Govt at least every 5 year
• employer can fix the wage period as either daily, weekly, fortnightly, or monthly.
• employer can deduct wages for the following. but cant exceed 50% of the worker’s wages.
  • Fines
  • Absence from duty
  • Accommodation given by the employer
  • Advances given to the employee
  • clause for the deduction of wages seems arbitrary and it might prevent workers from unionising in fear of a deduction in wages.
•  Code prohibits gender discrimination in wages and recruitment of people for the same work or work of similar nature.
• Advisory boards will be set up by the central and state governments. These boards will consist of an equal number of employees and employers, state government representatives and independent persons. 
  • 1/3rd of the boards will be women members.
  • These boards will advise the governments on minimum wage fixing and increasing the employment opportunities for women.
• The Code specifies penalties for offences committed by an employer.
  • max punishment is 3-month imprisonment along with a fine of Rs. 1 lakh

Code also takes away the jurisdiction of courts in providing justice to workers 

can only approach the quasi-judicial body and appellate authority set up under the provisions of the Wage Code.

Industrial Employment (Standing Orders) Act, 1946 had made it mandatory for employers of industrial establishments with 100 or more workers to define the conditions of employment and rules of conduct for workmen, by way of standing orders/services rules and to inform the workers of the same clearly.he rights of workers 
Now its 300

Concerns

• Dilutes the rights of workers with <300 
• The reskilling fund seems to be arbitrarily framed and there is no clarity on where the whole funds would come from.

Code on Social Security, 2020

• The definition of employees has been widened to include inter-state migrant workers, construction workers, film industry workers and platform workers.
• The gratuity period for working journalists has been reduced from 5 years to 3 years.
• The Code talks about setting up social security funds for unorganized workers, platform workers, and gig workers.
• There is a provision for the central government to decrease or defer the employer’s or employee’s contribution towards the PF or ESI for up to 3 months in the event of a pandemic, national disaster or an epidemic.
• The Code proposes the establishment of a National Social Security Board for recommending to the central government the formulation of schemes for the various sections of unorganised, gig and platform workers.

Code on Occupational Safety, Health and Working Conditions, 2020

The major provisions of the Occupational Safety, Health and Working Conditions Code are mentioned below.

• The Code expands the definition of a factory as a premise where at least 20 workers work for a process with power and 40 workers for a process without power.
• The Code removes the manpower limit on hazardous working conditions and makes the application of the Code obligatory for contractors recruiting 50 or more workers (earlier it was 20).
• The Code fixes the daily work hour limit to a maximum of eight hours.
• The Code empowers women to be employed in all kinds of establishments and at night (between 7 PM and 6 AM) subject to their consent and safety.
• To encourage formalisation in employment, the employer is required to issue an appointment letter.
• The Code defines an inter-state migrant worker as someone who has come on his/her own from one state and received employment in another state and earns up to Rs.18000 per month.
• Portability benefits for inter-state migrant workers: They can avail benefits in the destination state as regards ration and benefits of building and other construction worker cess.
• However, the Code has dropped the earlier provision for temporary accommodation for workers near worksites. 
• The Code also proposes a Journey Allowance – this is a lump sum fare amount to be paid by the employer for the journey of the worker from his/her native state to the place of employment.