The current labour force, the Government of India merged the 29 existing labour laws into 4 big Labour Codes. These reforms are supposed to establish a balance between the welfare of the employees, growth of the business and economic development.

Here, we deconstruct the highlights of the Indian Labour Reforms, how they are significant in the country and the key benefits it holds to both workers and industries in India.

Why Were Labour Reforms Needed?

The labour laws in India have long been regarded as complicated, archaic, and challenging both to the employees and employers. Having 29 various laws that dealt with wages, safety, social security and industrial relations, compliance became a nightmare and time consuming.

Labour reforms that were implemented by the government had three key objectives:

• Simplification –  less legislation, less complicated regulations.
• Security – increased security to the workers.
• Sustainable Growth – facilitate investment and doing business.

These are reforms meant to solidify the formal workforce as well as the way forward for India to become a global manufacturing hub.

Overview of the 4 Labour Codes

The simplification is a matter that puts all 29 laws under these four codes:

1. The Code of Wages, 2019

This code is a combination of 4 laws and payment related laws.
It ensures:

• Minimum wage for all workers across sectors
• Timely salary payments
• Rule of “same work, same wages”
• Wage inequality to be addressed by fixing a national minimum wage.

Why it matters:
It cushions the workers against poor payment and provides greater earning security across industries.

2. The Industrial Relations Code, 2020

This code is a mixture of legislations regarding trade unions, employment terms and industrial disputes.

Key highlights:

• Less restrictive regulations on hiring and dismissing in bigger sectors which increases investment.
• Streamlined dispute resolution mechanism in order to prevent protracted court battles.
• The guidelines are clear on how to form and identify trade unions.

Why it matters:
It brings about transparency, lessens employer employee clashes, and contributes to industrial peace.

3. The Code on Social Security, 2020

It is considered to be one of the most significant codes that unite 9 major social security laws in its worker version.

Its benefits include:

• Expansive benefits of EPF, ESI, maternity benefits, and gratuity.
• First time social security to gig workers, platform workers and unorganized workers.
  
  
• Online registration and claims.

Why it matters:
It guarantees financial security of workers in the long term across the board, including the expanding digital economy.

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

This code is a combination of 13 laws that are concerned with safety, working hours, and working conditions.

Key improvements:

• Compulsory regular health check-ups.
• Specified work hours, limits between working days and vacation days.
• Health and Safety factories, mines and construction sites.
• Increased accommodation and welfare of the inter-state migrant workers.

Why it matters:
It guarantees healthier working environments, better health of employees, and less work-related risks.

Major Highlights of India’s Labour Reforms

1. Simplification of Laws

Companies have 4 definite labour codes to comply with instead of 29 different regulations.

2. Better Protection for Workers

The workers are now better safeguarded by the law as far as minimum wages, safety, and social security is concerned.

3. Encouragement for Businesses

A mere obedience will attract Indian and international companies to invest and develop operations.

4. Support for Modern Workforce

The workers in this category are gig, delivery, and online platform workers who have been included under the labour security framework in India.

5. Control Over Informal Labour

Through the digital records, additional employees will be incorporated into the formal system and enhance transparency and wages.

6. Boost to “Ease of Doing Business”

Without ambiguity, time is saved, conflicts are minimized and less administrative strain makes economic development quick.

How Labour Reforms Support Sustainable Growth

These changes can result in a win-win situation:

• Employees receive improved rights and financial security.
• Employers receive easier regulations, and working arrangements.
• The productivity, foreign investment and stable labour relations benefit the economy.
  
  

In general, the labour codes will ensure that India is ready to face the future, and this will be achieved through a qualified and safeguarded workforce and a hospitable business climate.

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FAQs About India’s Labour Reforms

Q-1. What are the 4 Labour Codes introduced in India?

The four codes are:

1. The Code of Wages, 2019
2. The Industrial Relations Code, 2020
3. The Code on Social Security, 2020
4. The Occupational Safety, Health and Working Conditions Code, 2020
   

Q-2. Why were the 29 existing labour laws replaced?

Ans- They were also substituted to eliminate complexity, confusion and make the regulations simple, transparent and easy to both employers and the workers.

Q-3. Do the labour codes benefit workers?

Ans- Yes. The codes guarantee minimum wages, on-time payment of salaries, safety standards, and extended social security cover of all workers- including gig and non-organized workers.

Q-4. How do the reforms support industries and businesses?

Ans- Streamlined regulations, quicker dispute settlement and compliance facilitates the growth and smooth running of industries in a way that enhances investment and productivity.

Q-5. Are these new labour codes implemented across India?

Ans- The codes have been passed by the central government although it will require the full realization of the codes by all the states framing their respective rules. Some states are notified to a great extent.