13 July, 2022
15 Min Read
Need for the New Labour Code
Feature of the proposed Labour Code
Labour codes are based on the recommendations of the Second National Commission on Labour (2002).
Code on Wages, 2019
Code on Industrial Relations, 2020:
Code on Social Security, 2020:
The Occupational Safety, Health and Working Conditions Code, 2020:
The three codes simplify labour laws by subsuming 25 central labour laws which have been on the table for more than 17 year
It will improve the ease of doing business by boosting investment and reducing the complexity and internal contradiction and allowing the firm with up to 300 workers to go ahead with layoff, retrenchment and closure without government permission.
Employers would have greater flexibility in rolling out short-term work contracts.
Even at night, the women can work but it has to be ensured that provision for their security is made by the employer and the consent of women is a must. The maternity leave has also been increased from 12 weeks to 26 weeks, even the clause of pay parity for women workers as compared to their male counterparts has been made clear.
The employees may be able to balance work life by enjoying four days work week even it will also drastically change the way industrial houses treat their employees.
Challenges faced by Labour Code
As labour is a concurrent subject which means both the Center and State have to frame laws and rules, while the centre cleared the four labour codes in 2020 but some state governments are yet to complete the process.
A major change in the definition of wage would impact take-home pay, but increase retirement savings, which is something that a section of employers are opposed to as it may increase their employee costs.
The code has failed to extend any form of social protection to the vast majority of informal sector workers which is mainly dominant in the rural area including migrant workers, self-employed workers, home-based workers and other vulnerable groups.
High provident fund liability has to be borne by firms. Companies would also need to adjust their payroll operations if the wage code were to become law and would have to work around the deadlines and moot methods for determining the full settlement of salaries within 2 working days.
Industrial strikes may become harder due to these new changes which is a negative impact on the worker and their right to peaceful protest.
It mandates the registration of all workers with Aadhaar cards on the Shram Suvidha Portal, to be able to receive any form of social security benefit which would lead to Aadhaar-driven exclusion.
Source: The Hindu
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