Between 2019 and 2020, India has passed four new Labour Codes which replaced multiple central labour laws. The four Codes are a part of major labour reforms in India as the country looks to achieve greater economic growth and increase ease of doing business.
The Parliament passed code on Wages in 2019, while in September 2020, the Indian Parliament passed three new Labour Codes, namely the Industrial Relations Code, the Occupational Safety, and the Health and Working Conditions Code, and the Social Security Code.
The four labour codes replaced 29 central labour laws and could potentially affect 500 million workers in the country.
Applicability
The Indian Government planned to implement the Codes on 1 April 2021. However, the Central Government has deferred it for the time being as several states are yet to finalise rules for the implementation of relevant regulations under the Code of Wages, 2019. Since Labour comes under the Concurrent List of the Constitution, each Indian States can implement its own labour laws.
The new labour codes bring significant changes, and it is important for businesses of all sizes to understand the key changes introduced under the new Codes and adapt to the new labour code.
Key Changes
1. Under the old regulations, there were multiple legal definitions for “employee”, “worker”, and “factory”, to name a few. These definitions have been made the same in all three Labour Codes. This is done to create more predictable labour conditions and lessen the burden on the country’s judicial system caused by the disambiguation of legal definitions.
2. Recognition and institutionalised several new categories of workers such as “gig workers”, “platform workers”, “Fixed Term Employees”. “Unorganised workers”, “contract workers”, etc.
3. Extended the definition of “inter-state workers” or “migrant workers” to include contract workers and self-employed workers from another state.
4. “Hazardous activity” definition now includes all establishments where any hazardous activity is carried out regardless of the number of workers.
5. Extend the coverage of national insurance to include gig workers, plantation workers, unorganised sector workers, and workers in hazardous occupation and Inter-state migrant workers.
6. Setting up of Social security funds for unorganised workers, gig workers and platform workers. “Fixed Term Employees” are entitled to the same salary and benefits at par with regular employees who are the same or similar work.
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Source: Overview of Labour Law Reforms https://www.prsindia.org/billtrack/overviewlabour- law-reforms
Disclaimer: The article was written with the intention of providing general information and a general understanding of the law, not to provide specific legal advice. The content should not be used as a substitute for competent legal advice in any specific situation