All you need to know about the new  labour codes

What is the news? 

Ministry of Labour and Employment introduced four Bills on labour codes to consolidate 29 central laws in 2019 which were then replaced with  new ones in 2020. 

These new labour codes are likely to be implemented in 2022-23.  

What is the need for these codes? 

Simplification: India currently has a web of multiple labour legislations, over 40 central laws and 100 state laws involving labour. 

The Second National Commission on Labour (2002) recommended simplification to bring about transparency and uniformity. 

Improvement in Ease of Doing Business by:

– Formalising workforce: These codes aim to provide social security benefits like health security, a minimum floor wage, etc to informal workforce also. They form approximately 90% of the workforce and have been till now majorly out of the labour reform.  

– Provisions for ease of interstate migrants 

– Increasing Labour productivity

Attracting investments: A transparent environment in terms of workers’ compensation, clear definition of employee rights and employer duties, and simplified labour codes making compliance easier are likely to attract investments. 

Lowering revenue loss: With more workers in the organized sector, leakage in terms of direct as well as indirect taxes may be plugged. 

What are the various provisions of the codes? 

Read about the codes here, 

– Code on Industrial relation

– Code on social security

– Code on occupational safety

– Code on wages bill

 What is causing delay in the implementation? 

As labour is concurrent subject, State governments also need to publish draft rules apart from central government. 

Various states are in the process of doing the same. 

Source: This post is based on the article “All you need to know about the new labour codes” published in Livemint on 27^th Dec 2021