Labour legislation to be simplified with merging of 44 laws

Last Updated at: Sep 07, 2020
Labour legislation to be simplified with merging of 44 laws
Labour legislation to be simplified with merging of 44 laws
The Standing Labor Committee has called the government out for refusing to report the specified expenditure and source of profit to administer the social protection system. It advised them to provide unemployment benefits as part of the unorganized workers’ code enough so extreme job market conditions can be handled better.


Terming the existing labour laws as “tardy”, a senior Labour Ministry official said that government is working to ease and simplify them with a view to encouraging young entrepreneurs and promote job creation.


Merging Labour laws

As a first move on reforming the labour laws, the newly formed government has planned to merge 44 labour laws into 4 codes – wages, social security, industrial safety & welfare and industrial relations.

This new labour legislation aims at helping investors accelerate growth. The decision has been taken during an inter-ministerial meeting chaired by Home Minister Amit Shah and attended by Nirmala Sitharaman, Labour Minister Santosh Gangwar, Commerce and Railway Minister Piyush Goyal among others.

Labour related Laws in India

All the laws related to social security, including the Employees’ Provident Fund and Miscellaneous Provisions Act, Employees’ State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees’ Compensation Act will be merged to create a single social security law or code.

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The government has merged several industrial safety and welfare laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act. The government merged them into a single category on industrial safety and welfare.

Similarly, the government is likely to merge the Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act etc.

The Labour Code on Industrial Relations will combine the Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.  

The government is expected to place this new Labour draft bill before the Union Cabinet for approval. After which it will be introduced in the coming second-week session of the Parliament. The session will take place on June 17, 2019.  

The ministry last year had taken steps for formulating four labour codes wages, social security, industrial safety & welfare and industrial relations. This was done as per the recommendations of the second national commission on labour. Also, the government had made it clear that there would be no hire and fire policy.

OSH code: 2nd Major Labour Reform

The Union Cabinet endorsed the Occupational, Safety, Health and Working Conditions Code, also known as the OSH Code, which seeks to combine 13 core labour laws into a single code that will apply to all establishments employing 10 or more employees.

The OSH Code is the government’s second major labour-reform. In comparison to the current Minimum Wages Act and the Payment of Wages Act, which applies only to workers working in those types of employment, it cleared the Wage Code, which contained “minimum wage requirements and wage compensation to cover workers in both the organized and unorganized sectors.”

The labour laws of India are complex and confusing, and the aim of the government to simplify them into four codes: wages; OSH; industrial relations; and social security. For example, the OSH Code will ensure that regulations relating to 622 sections in 13 laws are now streamlined. protected by only 134 sections, according to government officials.

Medical care

The law mandates the employers to not only provide a healthy working atmosphere but also regular medical tests for all workers. Also, The code specifies that creches for children under the age of six should be given for women employed in mines.

It also recommends showers or bathing places for women mine workers, and locker rooms with separate ones. The code gives every employee the power to request information.

Increased maternity leave

This Government increased women’s maternity leave. This code will also help to increase the number of women in the workforce.

The multiplicity of labour laws has been a nightmare for employers and employees. Besides, as our economy increased and the labour force grew, the government kept adding new additional laws. It did not consider the contradictions that might come with older laws. So 2014-19 saw the repeal of over 10 laws seen as redundant. The remaining 35 or above have been rationalised into four codes.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.