What’s inside the New Labour Codes



Central government is bringing a vast change in the labour laws by resizing the number of legislation and setting up huge change in the labour field in India.[1] Out of 4 codes 3 codes have been passed by the parliament last month. Social security code, industrial relations code, occupation safety code these are the three codes passed by the parliament. Code on wages which was passed long back in 2019 and got accepted by the president back then. The researcher tries to analyse the new code of labour law which was implemented by the government of India. The paper talks about the changes that were brought in the new code and also tries to through some light on comparison of older and new provisions and discusses the main point of differences in both legislations. The central theme of the paper is to make understand the general public what all are the new changes and how the new code works, also the important provisions of all new 4 codes are discussed in the paper and written in a simple way. At last the paper also tries to point out some important concerns about the new codes. The loopholes and other disadvantages of the new code which will affect the labour industry as a whole.

Key words: Social security code, industrial relations code, occupation safety code, labour law


Government of India is getting a huge change the work laws by resizing the quantity of enactment and setting up gigantic change in the work field in India. Out of 4 codes 3 codes have been passed by the parliament a month ago. Employer, employee, industry, wage all these terms have similar meaning in all 4 codes so that the issues and cases relating to the lack of clarity now ends. Also the hectic registration procedure now becomes much easier than before. Now if an industry is registered under any of the act doesn’t require any separate registration under different laws.

Continuance of allowances

[2]When social security code officially published in gazette employees compensation act, employees provident fund act, maternity benefit act, gratuity act, and other five acts will be stop working and get cancelled. But all the allowances the employees are getting according to the cancelled act will continue to receive according to the new social security code.

Employees state insurance act

[3]ESI provisions are changed drastically, old legislation is binding on when 10 employees working on factory, store, commercial enterprises, educational institutions, hospitals, laboratories at least for one day. But according to new code even one employee is working on an industry where it is hazardous to life then ESI is made compulsory even if he is the only employee working there.

The old act is not binding on plantations but the new code give the provision and discretion to the owners of plantation if they think they need to implement ESI then can implement it and it is binding. Also when employer and majority of his employees (if number is less than 10 also no issue now) requests for the ESI then these small organisation can also avail ESI.

Now all the industries which is scheduled in Employee provident fund Act are included. But according to new code all the institutions which have more than 20 employees are included and binding under the code. The same will apply to ESI laws also even if the employees number is less than 10 also it is binding. But in this situation the employer and majority employees must request for the same. So another important change in favour of employer is that contribution amount cannot be given not more than the time period of five years it has been included in the new code.

Less contribution liability

[4]Various allowances such as rent, overtime allowances, commission, travel expenses etc. have been removed from the definition of term wage so according to ESI and EPF acts the contribution of employer and employee will become less.

ESI and EPF control will continue to be undertaken by an independent body or corporation. Also under this corporation trust the representatives of employer and employees must be 10 each. Contract employment for a particular period has been now accepted in the new code. For these employees in order to get gratuity they need service for 5 years this rule was avoided. Even though such employees don’t have service for period of 5 years they can get gratuity according to the years’ work done by them.

Canteen rest room facilities

[5]According to the existing legislation when daily workers are 250 or more then only factory employer has to provide the canteen facility now this has changed including contract labourers if there is 100 employees them the employer must provide the canteen facilities. Also the provision for rest room has also changed the number employees has brought down from 150 to 50 and they have to have separate rest room and dining hall according to new code.

No Strike without Notice

If this new code came into existence then the most important laws such as trade union act 1926, standing orders act 1946, and industrial disputes act 1947 which will be strike down. Charity organisations are exempted from the new code. [6]According to the existing law factory, plantation, mines when the number of employees is 100 or more firing or layoff or closing of factory requires permission from the appropriate government. But when it come to new code the number has increased from 100 to 300.

Now coming to strike necessary service sector employees are exempted from giving prior notice for strike according to existing law. But when it come to new code everyone must provide notice prior to 14 days’ time period. When a company’s employees (more than 50%) take mass leaves in an organised way then it is considered as strike. When the discussion is going on with the concerned officer for redressal the employees cannot conduct strike it has made illegal. The powers of civil court has now given to negotiating officer.

Complaints and redressal

[7]If the employees are more than 20 then there must be a committee to solve the complaints. The existing situation give provision for government to divert all cases except dismissal of employees to labour courts. But according to new code the labourers can directly approach labour tribunals for redressal. For disciplinary enquiries must be conducted and finished within 90 days. The labour dispute which is more than 2 years the redressal officer cannot solve it. At the time of dismissal of an employee in one year 15 days wages must be added to re skilling fund by employer. Definition of employees expanded to include more workers like – inter-state migrant workers, platform worker, film industry workers and construction workers. Gratuity period for working journalists reduced from five to three years.

In existing law 10000 rupees or more as wages for supervisors and such supervisors are not considered under term employee. Now this limit has increased to 18000 rupees. According to existing to law standing order is binding on industries where employees is 100 or more but this limit has increased to 300 in the new code.

Over time legislation

Now according to the code of occupation and safety if worker has to be assigned over time work then the employer has to get prior written consent from the employee.[8] Now if the employer appoint 20 employees temporary then they will come under contract labour law but now the number has increased to 50 according to the new code. Also the employer must provide proper ventilation, clean rest rooms, and toilets, seating facilities etc. to the employees these legislations are same as older one. Contract labourers has to provide experience certificate to the employer is also added to the new code.

Punishments for defaulters

Those who fail to implement these codes are strictly punished. Even if it is a small mistake the punishments are like 3 months imprisonment or 1 lakh rupees fine or both. For specially mentioned offences in the code the punishment will be more. The continuance of offence the defaulter have to pay 2000 for every single day. Once punished for the offence and when again the defaulter do the same mistake then the punishment will be double than before and with a minimum fine of 1 lakh.

Now for employers who makes any default in workplace or working condition which is hazardous to life may get imprisonment of 2 years and a fine of 5 lakh. [9]Also when the defaulter continues to make the default then he will liable to pay 25000 per day. If employer continues the above offence for more than one year then he / she liable for imprisonment of 3 years and a fine of 20 lakhs. If an employee dies because of the default of employer then he is liable for imprisonment for 2 years and a fine which is not less than 5 lakhs.

The amount received from this fine not less than half of it must be given to the deceased person or to the legal representative of such person.

If the defaulter is employee then the maximum fine that can be imposed is 10000. Another important point in the new code is that when the employee is punished the employer cannot be held vicariously liable. The default when come to notice and complaints given by facilitator will only remain.

Now coming to the inspectors according to the new code the inspectors who come for inspection are now known as inspector cum facilitator. Also they cannot inspect any place according to their wish, they can inspect only according the list provided by the web portal of appropriate government.

The key concerns raised against the new code

Experts state the expansion in the limit for standing requests will water down the work rights for labourers in little foundations having under 300 specialists. The expansion in the edge for standing requests from the current 100 to 300 is inappropriate and shows the legislature is quick to give gigantic measures of adaptability to the businesses as far as recruiting and terminating… excusal for supposed wrongdoing and conservation for financial reasons will be totally feasible for all the mechanical foundations utilizing under 300 labourers. This is finished destruction of business security.

The Industrial Relations Code likewise presents new conditions for completing a lawful strike. The time-frame for intervention procedures has been remembered for the conditions for labourers before going on a legitimate strike as against just the ideal opportunity for placation at present.

For example, the IR Code recommends that no individual utilized in a mechanical foundation will protest without a 60-day notice and during the pendency of procedures before a Tribunal or a National Industrial Tribunal and sixty days after the finish of such procedures. In this way, prolonging the legitimately allowable time span before the labourers can go on a lawful strike, making a lawful strike well-near outlandish.

The IR code has extended to cover all modern foundations for the necessary notification time frame and different conditions for a legitimate strike. The Standing Committee on Labour had suggested against the development of the necessary notification time frame for strike past the public utility administrations like water, power, petroleum gas, phone and other fundamental administrations.

At present, an individual utilized in a public utility assistance can’t picket except if he abandons a strike inside about a month and a half before protesting or inside fourteen days of giving such notification, which the IR Code currently proposes to apply for all the modern foundations.


[1]India Code<https://www.indiacode.nic.in/handle/123456789/1362/browse?type=ministry> accessed October 9, 2020

[2] THE CODE ON SOCIAL SECURITY| 2020 | SI 2020/ 36

[3] Ibid

[4]THE CODE OF WAAGES| 2019 | SI 2019/ 29

[5]The Occupational Safety, Health and Working Conditions Code | 2020 | SI 2020/ 37


[7] Ibid

[8]The Occupational Safety, Health and Working Conditions Code | 2020 | SI 2020/ 37


Author: christie manoj,
Lovely Professional University

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