Editorial Analysis for 26th September 2020

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Code debate: On new labour Bills


Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.


  • Far-reaching in effect, the new labour codes require greater deliberation. They are the Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code, 2020.

Brief summary of the Bills:

The Industrial Relations Code, 2020:

  • The Code provides for the recognition of trade unions; notice periods for strikes and lock-outs, standing orders, and resolution of industrial disputes.
  • It would subsume and replaces three labour laws:  Industrial Disputes Act, 1947; the Trade Unions Act, 1926; and the Industrial Employment (Standing Orders) Act, 1946.
  • The major provisions of the Industrial Relations Code Bill include the mandatory provision for companies with 300 or more workers to prepare and submit to the government standing orders regarding the conditions of service, including shift timings and termination of employment.
  • As of now, this applies to establishments with over 100 employees, under the Industrial Employment (Standing Orders) Act, 1946.
  • The Industrial Relations Code aims to promote the ease of doing business and spur investment by encouraging labour flexibility.

The Social Security Code Bill:

  • The Bill replaces nine laws related to social security.  These include the Employees’Provident Fund Act, 1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security Act, 2008. 
    • Social security refers to protection measures provided to workers to ensure healthcare and income security in case of certain contingencies such as old age, maternity, or accidents.
  • One of the major proposals of the Social Security Code Bill is to bring unorganised sector, gig workers and platform workers under the ambit of social security schemes,including life and disability insurance, health and maternity benefits, provident fund and skill upgradation.

The Occupational Safety Code:

  • The Occupational Safety Code subsumes and replaces 13 labour laws relating to safety, health and working conditions. These laws include: Factories Act, 1948; Mines Act, 1952; Dock Workers Act, 1986; Contract Labour Act, 1970; and Inter-State Migrant Workers Act, 1979, which has been highlighted during the recent migrant workers crisis due to COVID-19.
  • These laws cover factories, mines, dock workers, building and construction workers, plantation labour, contract labour, inter-state migrant workers, working journalists, motor transport workers, sales promotion employees, and cine workers.
  • The Code seeks to regulate health and safety conditions of workers in establishments with 10 or more workers, and in all mines and docks.
    • The Code creates special provisions for certain classes of establishments such as factories, mines, dock workers, and constructions workers. These include separate provisions on licenses, safety regulations, and duties of employers. 

Key Details:

  • The root of the idea consolidated labour code goes back to The June 2002 report of the Second National Commission on Labour.
  • The broad vision has been to give an impetus to economic activity without adversely affecting the interests of workers.
  • They were drafted with the basic objective of amalgamating, simplifying and rationalising labour laws.

Positive feature:

  • A positive feature is that the Social Security Code promises the establishment of social security funds for unorganised workers, as well as gig and platform workers, and their welfare would be addressed by the National Social Security Board.
  • The threshold for considering any premises as a factory has also been raised from 10 to 20 workers without the use of power, and from 20 to 40 with power.


  • The laws of paramount importance, were passed in haste or without sufficient
  • The three codes are an updated version of the respective codes of 2019, which were scrutinised by a standing committee.
  • Therefore, it is widely opined that they should have been sent back to the panel for an assessment.
  • The most contentious feature is the increase in the threshold for an establishment to seek government permission before closure, lay-off or retrenchment from units that employ 100 workers to 300.
  1. This gives establishments greater freedom in their termination and exit decisions.
  2. This was not found in the 2019 draft.
  • Another contentious section allows the appropriate government to exempt any new factory from all provisions of the code on occupational health, safety and working conditions.
  • There is a fear that expansive powers of exemption have been conferred on the respective governments and there has been an excessive delegation of rule-making powers.

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