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These Laws will impact your job from 1st July #New_Labour_Code: Explained



For #Aatmanirbhar India, the empowerment of workers is necessary. Data states that 90% of workers in the unorganized sector do not have access to all social securities. This number is 50 Crores. This crowd is being addressed by the Union. Earlier, there was a web of multiple labour legislation. Now, the Union has taken a historical step of codifying 29 laws into 4 codes. These codes are beneficial to get security, health and other welfare measures.


Through this write-up, we are sharing insights into what you can expect from the New Labour Code.


Satyamev Jayate to Shramev Jayate


Labour reforms were undertaken since 2014:

  • Usage of IT-enabled system for transparency and accountability

  • The ceiling limit of gratuity has been increased from Rs 10 Lakhs to Rs 20 Lakhs on 29.03.2018

  • The Payment of Wages Act enabled the payment of wages to employees by cheque or direct credit to their bank accounts

  • Increased paid maternity leave from 12 weeks to 26 weeks





The benefit of the codes:


  • These Labor reforms will enhance the Ease of Doing Business in the country.

  • Enhancement can be seen in the employment creation and worker’s output.

  • These benefits will available to workers of both organized and unorganized sectors.

  • EPF (Employees’ Provident Fund) and EPS (Employees’ Pension Fund) and other types of medical benefits under Employees’ Insurance will be available to all workers.

  • A Labour Tribunal will institutionalize the vibrant mechanism for speedy disposal of cases.

  • The New Code will mandate that employers to provide secure working conditions in the workplace for women workers.


Right to minimum wages for everyone


Labour Code (Wage Code) 2019

  • It guaranteed the minimum wages availability to 50 Crores of workers belonging to the organized and unorganized sector

  • Review of minimum wages every 5 years

  • Guarantee of timely payment of wages to all workers

  • Equal remuneration to male and female employees

  • Determination of wage will be based on skill level and geographical area

  • Increase in wage ceiling from Rs 18000 to Rs 24000

Under the inspector raj system, the inspector will be made inspector cum facilitator and a random web-based inspection system will also be started.

Right of Security


Social Security Code 2020
  • The benefit of free treatment will be available through a small contribution from hospitals and dispensaries of ESIC

  • Expansion of ESIC hospitals and dispensaries will be made up to the district level.

  • Institutions working in hazardous areas will have to compulsorily register with ESIC.

  • UAN (Universal Account Number) will be linked to ESIC and EPFO for unorganized sectors.

  • UAN will be Aadhar based

Right of Safety


OSH Code (Occupational, Safety, Health and Working Conditions Code) 2020


  • There are certain challenges being faced in the case of migrant workers. Earlier only workers appointed by a contractor were recognised as Inter-state Migrant Workers. However, under the new provisions of the code, workers can be Aatmanirbhar as they can now register themselves as Inter-state Migrant Workers on the portal. By doing this, they would get all the social benefits under the security scheme.

  • Providing of appointment letters to the workers has been made mandatory.

  • Under the “One Nation - One Ration Card”, an Inter-State migrant worker would get a ration facility in the State he is working in.

  • If a worker has worked 180 days, he shall be entitled to one-day leave for every 20 days of work done.

  • Women have been given the right to work at night with their consent. The employer would have to ensure safety measures for the same.


Dispute Resolution Mechanism


Industrial Relations(IR) Code 2020

  • In case of job loss, a worker will get the benefit (Unemployment Allowance) under Atal Bimit Vyakti Kalyan Yojana

  • At the time of retrenchment, a worker would be provided 15 days' wages for re-skilling. It will be directly transferred to the worker’s bank account.

  • Faster justice would be ensured through the Labor Tribunals

  • The Industrial Tribunal will have 2 members for faster disposal of cases

  • In industrial establishments, a Trade Union having 51 per cent votes shall be recognised as the sole negotiating union which can make agreements with employers.

  • In industrial establishments in which no trade union gets 51 per cent votes, a negotiating council of trade unions shall be constituted for making agreements with employers.


Benefits of Codification


Key benefits can be highlighted below:

  • Single registration; Single License; Single Statement; Minimum Forms

  • Common definitions

  • Web-based inspection

  • Use of technology

  • Reduction of Compliance cost

  • Reduction of Compliance dispute


Hope this clears the confusion. Both the Centre and the states are required to frame rules on these codes to introduce them since labour is in the concurrent list. 30 states and UTs have framed rules on code on wages, 25 on industrial relations, 24 on social security and 23 on OSH.

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