Why in the news?
Recently Ministry of Labour and Employment brought into force the 4 Labour Codes almost 5 years after being cleared in Parliament.
More on the News
- These codes are the Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health and Working Conditions Code.
- These codes consolidate 29 existing central labour laws.
India's Labour Law Framework
- Constitutional Provisions
- Concurrent Jurisdiction: Labour is in the Concurrent List under the 7th schedule, allowing both the centre and the state to legislate.
- Preamble: Emphasise social justice, dignity of the individual, equality of status, which become guiding principles for labour welfare and labour legislations
- Directive Principles
- Article 39: The State shall secure equal pay for equal work, irrespective of gender.
- Article 41: Provide for the right to work, education and public assistance in case of unemployment, old age, sickness and disablement.
- Article 42: Secure fair and humane conditions of work and maternity relief
- Article 43: The State to secure for all workers a living wage, conditions of work, ensuring the decent standard of life
- Article 43A: Rights of workers to participate in the management of industries.
- Fundamental Rights
- Article 16: Equality of opportunity in matters of public employment,
- Article 19(1) (C): Protects the rights to form associations or unions.
- Article 23: Prohibits human trafficking and forced labour
- Article 24: Prohibits the employment of children below 14 in hazardous industries
- Labour Force: Overall Labour Force Participation Rate (LFPR) for 2024 was 59.6%, with 90% of workers engaged in the unorganized sector.
- In 2023-24, 64.33 crore people were employed in India, with 41.7% female LFPR.
- Institutional mechanism
- Ministry of Labour and Employment to protect and safeguard the interests of workers
- Labour Bureau: Publishes information on industrial disputes, closures, retrenchments, lay-offs, wages, earnings, working and living conditions and evaluates the working of various labour Acts
- Chief Labour Commission: Prevents and settles industrial disputes, enforces labour laws and promotes the welfare of workers under the Central Government.
- Employees' State Insurance (ESI) Scheme: Under the Employees' State Insurance Act of 1948.
- It insures employees against sickness, maternity, disablement and death due to employment injury and provides medical care to insured persons
- It covers employees in non-seasonal units and earning up to 21000 Rs/month.
- Employees' Provident Fund Organisation (EPFO): Under Employee's provident fund act, 1952.
- It manages the Employees Provident Funds Scheme 1952, a retirement saving scheme in which both the employee and employer contribute a fixed percentage of the employee's salary every month.
Need for Labour reform
- Simplifying compliance: Multiplicity of laws leads to difficulty in compliance.
- The 2nd National Commission on Labour highlighted the multiplicity of labour laws and advocated for consolidation into 4 or 5 comprehensive labour Codes.
- Modernisation of Archaic Laws: Many previous laws originated in colonial or early post-independence and were outdated for contemporary economic and technological realities.
- Eg, Payment of Wages Act, 1936, which governed how and when wages were paid, applied only to employees earning up to a certain wage limit (24000 Rs/month).
- Universal Coverage Gap: Approximately 90% of workers work in unorganized sector and traditionally lacked access to social security benefits and comprehensive labour protections.
- Promoting Economic Objectives: The new codes aim to boost investment, growth, and jobs by simplifying compliance and improving Ease of Doing Business.
- Addressing New Work forms: The reforms were crucial to formally recognise and provide social security to categories like gig and platform workers, and inter-state migrant workers.
- According to NITI Aayog in 2020-21, 7.7 million workers were engaged in the gig economy, constituting 1.5% of the total workforce in India.
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