Labour Ministry Consolidates Labour Codes, Downsize from 1,228 to 480 Sections

Labour Codes: Consolidation of Regulations and Decriminalization

The Indian government has made significant strides in consolidating labour regulations with the introduction of the four labour codes. As of May 13, Labour Secretary Vandana Gurnani reported that these codes have streamlined 1,228 sections across 29 erstwhile statutes into 480 sections, and 1,436 rules into just 356 rules.

The codes have introduced a single registration framework for firms, replacing multiple registrations previously required. Additionally, 87 erstwhile provisions that carried a criminal penalty have been decriminalized. In contrast, 22 provisions now carry a criminal penalty, of which 16 are compoundable. The remaining six provisions pertain to safety and non-compliance with social security regulations for workers.

Comparison of Provisions

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The Centre had notified the four labour codes – Code of Wages; Code on Social Security; Code on Industrial Relations; and Occupational Safety, Health and Working Conditions Code – in November 2023. The rules linked to these codes were notified on May 8 and May 9.

The success of the labour codes will depend on the collaboration between the government, industry, and workers, as noted by Secretary Gurnani. The states will frame their own rules, leading to harmonization across the country.

The government is also working on a new digital inspection framework to check compliance with the codes. This framework will reduce human interface and focus on real defaulters.

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National Health and Safety Standards

The government plans to introduce National Health and Safety Standards, which will set guidelines for industries to follow for the safety and well-being of workers. This move is aimed at creating a modern, fair, and resilient labour ecosystem.

Benefits for Contractual Workers

The government is trying to be a model employer, setting an example for the industry in terms of welfare and facilities for contractual workers. As per the Code of Wages, 2019, daily wage workers shall receive payments at the end of the shift, and weekly wages should be disbursed before the week's holiday. The fortnightly payment should be disbursed within two days of the end of the fortnight, and the monthly payments should be received by workers within seven days of the next month.

The Department of Expenditure issued a circular on May 8, mandating firms seeking central government contracts to ensure full compliance with the Code of Wages, 2019, effective May 8. Contractors who repeatedly fail to comply with the provisions will be blacklisted.

According to Secretary Gurnani, full compliance with the labour codes will lead to increased exports, as labour standards will match those of developed economies. This, in turn, is expected to boost domestic investment and FDI inflow.