India’s Most Radical Rehaul Of Its Labour Laws Gets Parliamentary Approval, 44 Central Laws Subsumed Into 4 Broad Codes

The Rajya Sabha, on Wednesday (Sep 23), passed the three labour reform legislation that will bring all workers under some form of social security, provide much-needed flexibility to the employers to hire and downsize workforce.

The labour reform bills, that replace archaic labour laws into codes, have been pending for a long time.

The Code on Occupational Safety, Health and Working Conditions, the Industrial Relations Code and the Social Security Code have already been passed by the Lok Sabha on Tuesday. These will now be notified after which the labour ministry will frame rules under all the codes as it plans to implement them early next year.

The three codes are part of the four codes that the labour ministry had drafted over the years to consolidate 29 central labour laws. After holding consultation with multiple stakeholders, government incorporated 174 of 233 recommendations of the standing committee on labour to come up with three codes

The Code on Occupational, Safety, Health and Working Condition of (OSH&WC Code)seeks to regulate health and safety conditions of workers in establishments with 10 or more workers, and in all mines and docks. The new code subsumes and replaces 13 labour laws relating to safety, health and working conditions including the Factories Act, 1948; Mines Act, 1952; Dock Workers Act, 1986; Contract Labour Act, 1970; and Inter-State Migrant Workers Act, 1979.

The Code on industrial Relations seeks to consolidate and amend laws relating to trade unions, conditions of employment in industrial establishments or undertaking, investigation and settlement of industrial disputes. The Industrial Relations Code has raised the threshold for requirement of a standing order — rules of conduct for workmen employed in industrial establishments — to over 300 workers.

The Code on Social Security, 2020, will amend and consolidate laws relating to social security with the goal to extend social security to all employees and workers either in the organised sector or the unorganised sector.

The Parliament had already passed the Code on Wages in 2019 and rules were also later notified by the government.

Replying to the debate on the three labour reforms bills, Labour Minister Santosh Gangwar said,"The purpose of labour reforms is to provide a transparent system to suit the changed business environment.". Gangawar also added that states have been given flexibility to tweak labour laws as per their need.

The minister also told the House that as many as 16 states have already increased the threshold for closure, lay off and retrenchment in firms with up to 300 workers without government permission.

Code on Occupational, Safety, Health and Working Condition of (OSH&WC Code): Under the Code on Occupational, Safety, Health and Working Condition of (OSH&WC Code), the government has permitted single licence for staffing firms to hire workers contract across different location instead of multiple licences needed earlier has come as big complaint related relief for firms. Besides, it has increased the threshold limit of contractor employees from 20 to 50 under OSH Code while opening up hiring of contract workers in all areas will ease the compliance for employers.

The OSH&WC Code also provides for full-fledged survey for migrant workers for which the Centre will source data from various agencies and states.

Social Security Code The Social Security Code proposes the creation of a National Social Security Board which will take on the responsibility of formulating suitable schemes for unorganised workers, gig workers and platform workers.

It also brings these sections of workers under the ambit of social security schemes that include life and disability insurance, provident funds, health and maternity benefits and skill upgradation. The code also proposes the formation of a social security fund to provide social security sums to the three classes of work.

There are around 50 crore workers in the country, including 10 crore who are employed in the organised sector.

The codes also provide for issue of appointment letters to workers, digitising payment of wages and their free annual medical checkup.

Industrial Relations Code: The Industrial Relations Code raises threshold on number employees needed in an organisation for retrenchment and closure of establishments without government approval from 100 to 300, significantly improving the ease of downsizing firms based on business cycle

The Industrial Relations Code also 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 the time for conciliation at present.