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New labour codes give a free hand to employers: Unions

GS Paper 3

Syllabus: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment


Source: TH 

Direction: The article covers issues faced by Indian labour policies, including 4 new labour codes and suggests measures and best practices to overcome the challenges. Kindly read y’day’s related article on Lingering crisis of Labour.


Context: At the 17th Asia-Pacific Regional Meeting (APRM) of the ILO in Singapore, international workers’ groups criticised the Indian government’s labour policies, including 4 new labour codes.

About the 4 Labour Codes:

  • The Indian Parliament enacted 4 labour codes – the Industrial Relations Code, 2020; the Code on Social Security, 2020; the Code on Occupational Safety, Health, and Working Conditions, 2020; and the Code on Wages, 2020.
  • These codes aim to consolidate and simplify the country’s current and overlapping labour laws by combining 29 pre-existing labour laws into 4.
  • Because labour is a concurrent subject, states must develop their own rules and only then can the codes be fully implemented.
  • There are suggestions of a phased implementation as the Ministry of Labour and Employment lays the groundwork for the 4 new labour laws.

Criticism of labour codes:

  • Violate the tripartite agreements: Between workers, employers and the government and give a free hand to employers. For example, the power of inspection has been left to employers.
  • The provisions given in the Industrial Relations Code Bill will dilute the labour rightsof workers in small establishments having less than 300 workers
  • Mandatory compliance of registration of all workers (with Aadhaar cards) on the Shram Suvidha Portal may lead to exclusion of many beneficiaries.
  • The Code does not emphasize social security as a right, nor does it make reference to its provision as stipulated by the Constitution.

Other issues:

  • 90% of India’s workforce belongs to the unorganised sector and there are persistent challenges of low-paid jobs and poor working conditions.
  • Declining productivity growth has a negative impact on workers, and on the sustainability of enterprises – especially MSMEs.

 Measures of the Indian government to extend universal social security:

  • E-Shram portal: Helps in identifying workers in the unorganised sector and prioritising their needs.
  • Extending health coverage through ESIC.
  • Care for migrantsg. Government scheme of One Nationa One Ration card

 Opportunities: India has the largest youth population in the world and the country is observing a technological and entrepreneurial boom with start-ups mushrooming across the country.

 Way ahead:

  • Need for a new social contract, which is based on the availability of decent jobs for all, fair wages, social protection, etc.
  • Enhancing productivity will be critical to economic growth. For this, it is critical to harness digital, entrepreneurial skills.
  • Recognizing Invisible Labour: A national policy for domestic workers needs to be brought in at the earliest to recognize their rights and promote better working conditions.

 Best practice – Singapore’s Progressive Wage Model. This approach provides for raising wages in tandem with productivity growth achieved through upskilling workers and transforming businesses.


Insta Links:

Labour Codes


Prelims Links:

Which of the following laws is/are subsumed by the Code on Social Security, 2020:

  1. Employees Provident Fund Act, 1952
  2. Maternity Benefit Act, 1961.
  3. Industrial Employment (Standing Orders) Act, 1946.

Select the correct answer using the codes given below:

    1. 1 and 2 only
    2. 1 only
    3. 2 and 3 only
    4. All of the above


Ans: (1)



  • The social security code replaces nine laws on social security, including the Employees’ Provident Fund Act, 1952, and the Maternity Benefit Act, 1961.
  • Industrial Relations Code subsumes the Industrial Disputes Act, 1974, the Trade Unions Act, 1926; and Industrial Employment (Standing Orders) Act, 1946.
  • The Occupational Safety, Health and Working Conditions Code replaces 13 labour laws.