Labour law reforms – A brief guide with FAQs
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Labour law reforms – A brief guide with FAQs

Hello and welcome.  In this post, we will discuss labour law reforms in India. We will start with the introduction of Indian labour laws and then we will go through codes.


Indian labour law reforms refer to the laws regulating the labour of India. According to the Indian constitution, they give a category of fundamental rights to all workers, especially equality at work and decent working conditions.  

The labour law in India comes under the ‘Concurrent List’ that both the state and central government can frame. Currently, there are about 100 State laws and 40 Central laws. The present labour laws have become somewhat outdated and there was a dire need for labour reforms to bring equality under various labour laws and halt the persecution and mismanagement of the working sector.

According to time, the working conditions are changing. So, The Ministry of Labour and Employment has taken several initiatives towards changing the standard of living of workers. This will be beneficial and have an extensive effect on workers and nation-building. These labour reforms will enhance ease of doing business, employment creation, and the output of workers. 

The Government has enacted four Labour and Industrial Codes namely:

  1.     Labour Codes on Wages, 2019
  2.     Industrial Relations, 2020
  3.     Social Security codes, 2020 and,
  4.     Occupational Safety, Health, and Working Conditions respectively, 2020 

By simplifying, amalgamating, and rationalizing the relevant provisions of the existing Central labour laws, twenty-nine labour laws have been subsumed in four transparent, easy-to-understand, and simple Labour Codes.

The Labour Codes is being hailed as a historic step towards labour reforms and ease of doing business in India without diluting any basic rights of workers. It aims enforcement of labour laws with transparency and accountability.

Why Labour Reform?

Many provisions of Labour Laws traced their origin to the time of the British Raj. However, with changing times, many of them either became ineffective or did not have any contemporary relevance. Rather than protecting the interests of workers, these provisions became difficult for them.

The web of legislation was such that workers had to fill out four forms to claim a single benefit. Therefore, the present Government has repealed the non-useful Labour Laws. Now 29 Labour Laws have been codified into 4 Labour Codes.

How 29 Labour Laws are amalgamated?

For ensuring workers’ right to minimum wages, the Central Government has amalgamated 4 laws in the Wage Code, 9 laws in the Social Security Code, 13 laws in the Occupational Safety, Health and Working Conditions Code, 2020, and 3 laws in the Industrial Relations Code.

To which sector Labour Codes will be beneficial?

The benefits of these four Labour Codes will be available to workers of both organised and unorganised sectors. Now, the Employees Provident Fund (EPF), Employees’ Pension Scheme (EPS), and coverage of all types of medical benefits under Employees Insurance will be available to all workers.

What are the Benefits of codification?

  •       Single Registration, Single License, Single Statement, Minimum Forms
  •       Common definitions
  •       Reduction of Committees
  •       Web-based surprise inspection
  •       Use of technology – Electronic registration and licensing.
  •       Reduction of compliance cost and disputes

Why does the government want to enact the codes?

The government wants to facilitate ease of compliance and achieve equity for all. The new codes will ensure better use of technology for various compliance and effective enforcement. 

Will they apply to all employees in general or only to blue-collar employees?

It is clearly stated in the new labour codes that the codes will apply to all employees of an organisation irrespective of their role/level/nature of duties/salary (with minimal exceptions).

 What are the major changes in enacting the Labour Codes?

One of the major changes that have taken place is the change in the definition of wages. The government has attempted to bring simplicity to the new common definition of wages across all four codes.  

How does the change in definitions impact the code?

The new definition of wages covers all salary components expressed in terms of money or capability of being so expressed. With this change in the definition of wages and its common applicability, there will be an impact on the employees’ benefits and employer’s costs.

This is the end of our post on the labour law reforms in India. Let’s know your other questions or share your opinions on this topic in the comment section below.

Author Details:

CS Sneha Patel
Company Secretary at JKPP and Associates
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Ph No: 99899 72989
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