ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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New Labour Codes and Their Loopholes

Every successive reform in labour laws fails to plug the loopholes.

The passage of the three labour code bills by Parliament —the Industrial Relations Code (IRC) Bill, 2020, the Code on Social Security (CSS) Bill, 2020, and the Occupational Safety, Health and Working Conditions Code (OSHWCC) Bill, 2020—and the Code on Wages (CW) Bill enacted in 2019 is the first major milestone in labour market reforms in over three decades. The four labour code bills that were first introduced in Parliament in 2019, and of which three were replaced in September 2020, consolidate 29 central labour laws. Though the government claims that the new laws will reduce complexities, improve ease of compliance, usher in more transparency and accountability, and help both employers and workers, the actual gains to workers remain suspect.

This is because the new laws have further eroded even the limited protection currently available to the workers by expanding the space available to employers to unilaterally close down establishments and retrench workers without even making any effort to provide adequate compensation or protection. The trade unions have already made known their displeasure against various aspects, including the failure to universalise social security benefits and the corporatisation of the social security funds. Unions have also pointed out that legalisation of fixed-term contracts will usher in the hire and fire policy from the backdoor and consequently shrink the number of permanent workers. However, the full impact of the new acts can be assessed only after the draft rules of the legislation are finalised in the coming months.

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Updated On : 5th Oct, 2020

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