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The archaic labour laws of India demonstrated their complexities to deal with the challenges during the COVID 19 crisis. In spite of having broad and comprehensive employment statutes which were purposefully made to safeguard the labour rights, they turned down into the absolute inefficacious legislation and left the labourers as remediless survivors. The lockdown in India, which is considered as world’s strictest lockdown was intended to prevent the spread of infection costed an immense hardship to labourers and migrants across the country. In order to fix the obsolete laws, it was essential on the part of the government to bring some revolutionary long-overdue reforms to offer industries a more flexible environment which can offer them an advantage in the rapidly changing work environment.

In Indian Constitution, the welfare of labourers falls under the concurrent list. For the welfare of labourers, the regulations can be made both at the centre and state level. “According to the data of labour ministry, there are 40 legislations which regulates industrial disputes, working conditions, social security and wages of labour workforce. List of Central Labour Laws under Ministry of Labour and Employment, Ministry of Labour and Employment. The Second National Commission on Labor finds the current statutes as archaic, dauntingly complex and inconsistent with definitions.” (Report of the National Commission on Labour, Ministry of Labour and Employment, 2002)

To improve the flexibility and to balance the right of workers in the competitive market, National Commission on Labor has recommended the unification of labour welfare legislation in more comprehensive clusters namely (a) industrial relations, (b) wages, (c) social security, (d) safety, and (e) welfare and working conditions.

First Step Towards The New Labor Code

In 2019, the Ministry of Labor and Employment introduced four bills to consolidate 29 central laws to simplify the complex labour laws. These bills classified the labour laws into four categories: (i) Wages, (ii) Industrial Relations, (iii) Social Security, and (iv) Occupational Safety, Health and Working Conditions. While the Codes on Wages got cleared by parliament, the other three bills were sent to the Standing committee on labour for review The standing committee submitted their report to the government with their recommendations. (Standing Committee on Labour)

Why We Needed These New Reforms?

The 2nd National Commission on Labor recommended subsuming the labour laws. In its report, it said that there are numerous laws that have caused various hurdles in the path of the welfare of labourers. There were capricious definitions and contained antiquated provisions. In the words of Justice N Anand Venkatesh “Industrial laws available in this country have become archaic and unfortunately have not changed with the fast-changing environment in the industry.” (Tamil Nadu HC’s observation on Industrial Laws)

Key reforms in Labor Laws

The Code on Wages, 2019
It has replaced a colonial-era law and three 20th century’s law which were concerned with bonus and wages payments in all establishments where any trade, industry, manufacture, or business activity is carried out.
The new act has mandated to pay the minimum wages to all the employees. It has also added the clause of revision of minimum pay wage under five year’s period.
Industrial Relation Codes 2020
It has replaced three labour laws
The new code prohibits unfair labour practices.
The new law has tried to give more flexibility to employers regarding the hiring and firing of workforces without the government’s consent.
It makes legal strike a very rare event because before going on a strike, the employee shall give a 60-day notice
The Code on Social Security 2020
It has consolidated nine statutes that were concerned with social security, retirement and employee benefits.
The act has the provision to make social security mandatory for any establishment across the country and beyond any size limit.
The new code has also listed gig and platform workers under the unorganized sector and has also provided a clause of establishing the National Social Security Board for administering the various schemes for unorganized sector’s workers.
The act has also expanded the definition of various terms such as employees, inter-state migrant workers, platform worker etc.
Code on Occupational Safety, Health and Working Conditions, 2020
The new code has subsumed 20 central labour laws.
It defines an establishment as a factory as (a) 20 workers for establishments where the manufacturing process is carried out using power, and (b) 40 workers for establishments where it is carried out without using power.
The new code prohibits contract workers in core activities with some exceptions.
The code has a clause to provide special security provisions to women if they are employed in hazardous activities.
Way Forward: In the hope of Atmanirbhar Bharat with secured labour force

It is the first time since Indian Independence when the government is adopting reforms in labour laws. The new laws are giving assurance to workers related to wages, benefits and job security. There is still a long way to go to achieve the balance between industry and labour rights but we can be hopeful that this reform will be in compliance with the economic and socio-political environment of India. The new non-complex, transparent and compatible labour laws will surely ease the way of doing business in-country and will promote entrepreneurship, boost employment opportunities and attract investments. As PM Narendra Modi has announced “Aatmanirbhar Bharat Ahiyaan”, the vision of government seems very clear from this reform itself. These reforms are realizing the role of government in terms of what Friedrich A. Hayek advocated in The Road to Serfdom: There can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. (Hayek, 1944) We as a country are witnessing a reform that will have overarch implications – a move towards fulfilling the aspirations of crores of citizens of a country.

Author(s) Name: Aayush Pandey ( Gujarat National Law University, Gandhinagar)