In the most significant overhaul of labour laws in India recently, the Indian parliament has passed four new labour codes. Here's every single thing you need to know about them.
The parliament of India passed a series of labour law reforms that will change how businesses operate in the country. The Industrial Relations Code 2020, Code on Occupational Safety, Health & Working Conditions Code 2020, and Social Security Code 2020 consolidates the twenty-nine labour laws into four codes. This is intended for businesses to understand and comply with regulations. These new laws have several game-changing provisions, so business owners need to be aware of them!
One fundamental change is that businesses with up to 300 employees can now retrench workers or close operations without prior government approval. Previously, this was only possible for companies with up to 100 employees. This will give small and medium businesses more flexibility in how they operate.
Another significant change is that businesses will now be required to pay compensation to workers who are injured or killed on the job. This is an important victory for workers’ rights activists, as it will provide much-needed protection for workers in hazardous industries.
The new labour codes also contain provisions for paid maternity leave, health and safety standards, and social security benefits. Businesses must prepare for these changes and comply with the new laws.
So, if you’re doing business in India, you must be up-to-date on the latest labour law reforms. Ignorance is not an excuse, so make sure you know what the changes are and how they will affect your business. Stay compliant and keep your employees safe!
Why is Labour Law Important in India?
The labour law is designed to protect the interests of workers and ensure that they are treated fairly by their employers. The labour law also sets out the rights and authority of employers and employees.
What Are the Critical Changes to Labour Laws in India?
Here are some of the important changes made to the labour law in India –
- The first change is that the threshold for retrenchment, lay-off and closure has been increased from 100 workers to 300 workers
- The second change is that the Industrial Relations Code 2020 sets up a National Commission for Industrial Relations
- The third change is that the Code on Occupational Safety, Health & Working Conditions Code 2020 consolidates thirteen existing laws into one
- The fourth change is that the Social Security Code 2020 provides social security benefits to gig and platform workers
- The fifth change is that the parliament has passed the Wage Code. This code sets out the minimum wage for all workers in the country.
What Are the Implications of These Changes?
The changes have had a few implications. A few of them are listed below:
- The first implication is that more workers will now be protected by labour law
- The second implication is that employers must comply with more stringent regulations
- The third implication is that gig and platform workers will now be entitled to social security benefits
- The fourth implication is that all workers in the country will receive a minimum wage.
What Are the Benefits of These Changes?
Some of the benefits of the changes in the law are:
- The first benefit is that more workers will now be protected by labour law
- The second benefit is that employers must comply with more stringent regulations, improving working conditions for employees
- The third benefit is that gig and platform workers will now be entitled to social security benefits, improving their overall well-being
- The fourth benefit is that all workers in the country will receive a minimum wage, which will help to reduce inequality and poverty.
The Four Codes of Labour Law
- The code on wages passed by the Indian Parliament is a path-breaking initiative that seeks to ensure minimum wages for all workers across the country. In addition, the code on occupational safety, health and working conditions will protect workers in hazardous industries and provide them compensation in case of injury or death.
The new labour codes contain game-changing provisions to reform the current labour laws. First, the parliament passed the Wage Code. It received the approval of the President of India on 8 August 2019. The Code consolidates and amends the laws concerning wages and bonuses.
- The social security code will provide benefits like paid maternity leave, health and safety standards, and social security benefits to workers.
The code on social security will also give a considerable fillip to the unorganised sector workers like domestic bits of help, construction workers, etc., by providing them with health insurance and old-age pension.
- The labour code on industrial relations will make it easier for businesses to retrench workers or close operations. The code will also bring about changes in the trade union movement and recognition of unions.
All these changes aim to make labour laws more user-friendly and business-friendly. As a result, the government has taken a significant step forward in reforming the labour laws, which will go a long way in improving the course of business in India.
The code on industrial relations passed by the Indian parliament labour law will make it easier for businesses to retrench workers or close operations. The code will also bring about changes in the trade union movement and recognition of unions.
It has come into effect from 1st January 2021, the code on occupational safety, health and working conditions has come into effect from 1st April 2021, and the code on social security has come into effect from 1st July 2021.
- Code on Occupational Safety, Health & Working Conditions Code 2020 states and amends the laws regarding workers’ health and working conditions and occupational safety. The Bill replaces the following three laws:
- The Factories Act, 1948
- The Mines Act, 1952
- The Dock Workers (Safety, Health and Welfare) Act, 1986
The Bill defines several health indicators, including exposure to physical, chemical or biological agents, ergonomics, work environment and conditions that may lead to sickness. The Bill also requires employers to notify the administration of any accident that causes death or grievous hurt.
Vakilsearch is a legal firm that offers services related to legal and business. We can help you to comply with all the legal rules and regulations and help your business run smoothly.