India’s new labour codes, set to be implemented in stages starting in 2025, aim to consolidate and simplify the country’s complex labour laws.
These reforms promise to streamline compliance and expand social security.
However, they have sparked concerns among trade unions and labour organizations about potential gaps in worker protections.
Consolidation of Labour Laws in New Labour Codes
The new labour codes merge 29 existing laws into four comprehensive codes:
- Code on Wages: Establishes a universal minimum wage and ensures timely payments.
- Industrial Relations Code: Simplifies dispute resolution and hiring processes.
- Social Security Code: Expands benefits like provident fund (PF) and gratuity to gig and platform workers.
- Occupational Safety, Health, and Working Conditions Code: Focuses on worker welfare and safety standards.
These reforms aim to create a cohesive legal framework that balances worker rights with business competitiveness.
Promises of the New Framework
The government has highlighted several benefits of the new labour codes:
- Universal Social Security: Extends benefits to unorganized workers, including gig and platform workers.
- Simplified Compliance: Reduces the number of statutes, making it easier for businesses to comply.
- Enhanced Safety Standards: Introduces mandatory health checkups and safety measures.
Concerns and Criticisms
Despite these promises, the new labour codes have faced criticism for several reasons:
- Lack of Tripartite Consultation: The codes were passed without meaningful engagement with trade unions, violating International Labour Organization (ILO) conventions.
- Exclusion of Unorganized Workers: Critics argue that the codes largely ignore the concerns of unorganized workers, who make up over 90% of India’s workforce.
- Dilution of Protections: Critics have reproached the Occupational Safety Code for repealing the Building and Other Construction Workers Act of 1996, which ensured specific safety measures for construction workers..
- Ambiguities in Implementation: Questions remain about how the codes will be enforced and whether small and medium enterprises (SMEs) will receive adequate support.
New Labour Codes: Implications for Workers and Businesses
The phased implementation plan categorizes enterprises based on size. Larger companies are required to comply immediately, while smaller businesses are given up to two years.
While this approach aims to ease the transition, it also raises concerns about inconsistent enforcement and potential loopholes.
For workers, the new codes represent both opportunities and challenges.
The expansion of social security is a positive step. However, the dilution of specific protections could put vulnerable workers at risk.
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