Editorial Notes

[Editorial Notes] Govt’s new versions of labour codes

The union government introduced three labour codes afresh on social security, industrial relations and occupational safety in the Lok Sabha, amid criticism that the government was overlooking parliamentary process in bringing them afresh hurriedly.
By IASToppers
September 21, 2020


  • Introduction
  • Key proposals
  • What are the other proposals for workers?
  • Conclusion

Govt’s new versions of labour codes

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  • The government has introduced new versions of three labour codes – Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020 — in Lok Sabha recently.
  • In June 2019, central government decided to merge 44 labour laws under four categories: i) Labour Codes on Wages ii) Labour Codes on Industrial Relations, iii) Labour Codes on Social Security and iv) Labour Codes on Occupational Safety, Health and Working Conditions.

Key proposals

Industrial Relations Code Bill, 2020

Proposal: Introduce more conditions restricting the rights of workers to strike;


  • The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present.
    • For instance, it proposes that no person employed in an industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal/National Industrial Tribunal and 60 days after the conclusion of such proceedings.
  • Thus, elongating the legally permissible time frame before the workers can go on a legal strike, making a legal strike impossible.

Proposal: It has expanded to cover all industrial establishments for the required notice period and other conditions for a legal strike.


  • The Standing Committee on Labour, chaired by Bhartruhari Mahtab, had recommended against the expansion of the required notice period for strike beyond the public utility services like water, electricity, natural gas, telephone and other essential services.
  • At present, a person employed in a public utility service cannot go on strike unless he gives notice for a strike within six weeks before going on strike or within 14 days of giving such notice, which the IR Code now proposes to apply for all the industrial establishments.

Proposal: Increase in the threshold relating to layoffs and retrenchment in industrial establishments having 300 workers from 100 workers or more at present.

  • The Standing Committee on Labour had also suggested hiking the threshold to 300 workers, noting that some state governments like Rajasthan had already increased the threshold that resulted in an increase in employment.


  • Increase in the threshold for standing orders will water down the labour rights for workers in small establishments having less than 300 workers.
  • It will give tremendous amounts of flexibility to the employers in terms of hiring and firing.
  • Hence, dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers. This is complete demolition of employment security.

Other Proposals of the Bill

  • It has also proposed a worker re-skilling fund for training of retrenched employees.
  • The retrenched employee would be paid 15 days’ wages from the fund within 45 days of retrenchment. An industrial establishment will have to contribute an amount equal to 15 days’ wages to this fund for every worker retrenched.

What are the other proposals for workers?

The other two codes: Social Security Code and Occupational Safety, Health and Working Conditions Code have also proposed changes for expanding social security and inclusion of inter-state migrant workers in the definition of workers.

Social Security Code

  • It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers.
  • Also, aggregators employing gig workers will have to contribute 1-2 % of their annual turnover for social security, with the total contribution not exceeding 5 % of the amount payable by the aggregator to gig and platform workers.

Occupational Safety, Health and Working Conditions Code

  • It has defined inter-state migrant workers as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month. The proposed definition makes a distinction from the present definition of only contractual employment.
  • It proposes to allow the women employees to work at night, subject to the conditions relating to safety, holiday, working hours and their consent.
  • However, it has dropped the earlier provision for temporary accommodation for workers near the worksites. It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.


  • The Labour rights are of utmost importance as they are fundamental freedoms, which have a struggle of hundred years behind them.
  • In this context, the three bills will bring industrial peace and harmony in the country which will immensely help the country in bringing much needed economic growth and will help in employment generation. They will also help promote investment and will create harmonious industrial relations in the country.
  • All though government had included 74% of the recommendations of the standing committee on labour, accelerating labour reform and improve ease of doing business, the contentious issues in the bills must be resolved as early as possible after having a meaningful consultation with all the relevant stakeholders. 
Mains 2020 Editorial Notes

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