THREE CHANGES IN LABOUR LAW


The Lok Sabha Tuesday cleared new versions of three labour codes  Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020

Of the three labour codes passed in the Parliament Wednesday. The three codes centre around industrial relations, occupational safety, health and working conditions, and social security. A fourth related labour code on wages was passed in August last year.

3 Biggest Changes In Labour Laws Which Every Entrepreneur Should Be Aware  Of -

codes were passed in Lok Sabha and Rajya Sabha, the Opposition was not present as they were boycotting the Parliament.

However, these bills have gone through a full committee process. They were presented in 2019 and went to Parliament’s committee on labour, which has 31 members. Out of these, 16 are from the BJP and three from Congress, including senior leader Oscar Fernandes.

The committee had suggested 100 changes in the original laws drafted by the government, of which 74 are now implemented.

Since labour is a concurrent subject, the central government can design laws and states can pass laws and at this point, there were 40 odd central laws and 100 odd, or even more, state laws.

In 1999, Atal Bihar Vajpayee’s government set up the second national labour commission, headed by Ravindra Varma, a former Congress leader. The commission recommended that all the labour laws must be combined into four or five codes.

Twenty-nine of the over 40 central laws on labour were subsumed into these four codes, which also includes various aspects of the remaining law. The new wages codes subsume four important laws on safety and health, while the working conditions code subsumes 13 laws, and the social security code combines nine laws.

The industrial relations code subsumes three existing laws — the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947.

How will the three codes impact workers?

The reforms allow industries flexibility in hiring and retrenchment. They will make industrial strikes more difficult by clamping new conditions and also expand the social security net for both formal and informal workers.


What are the changes in hiring-firing rules?

Under the Industrial Relation Code, the government has allowed companies with up to 300 workers to fire workers or shut plants without the prior approval of the government. Hitherto, prior approval had been required. Firms with more than 300 workers need to still apply for approval. However, if the authorities do not respond to their request, the retrenchment proposal will be deemed to be approved. Earlier labour laws required a 30- to 90-day notice period before retrenching “workmen”, which is a class of mainly shop floor workers. In the case of manufacturing units, plantations, and mines with 100 or more workmen, lay-offs also required government approval. To be sure, 90% of India’s workforce, which is employed in the informal sector, won’t be affected by these changes.


India hailed the proposed changes to labour laws, saying they would provide operational freedom to employers, although provisions related to universal social security and guaranteed minimum wages may substantially add to their cost of hiring.


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