Key Takeaways
- The new labor codes represent a significant reform effort by the Indian Government to consolidate and simplify labor laws.
- The old labor codes referred to the existing labor laws and regulations that were in place before introducing new labor laws.
- The new labor codes permit fixed-term employment across all sectors, offering flexibility to employers, while the old regulations were limited to specific industries.
What are New Labour Codes?
The new labor codes represent a significant reform effort by the Indian government to consolidate and simplify labor laws. These codes aim to signify various labor regulations, making them more contemporary, worker-friendly, and business-friendly.
One of the most significant changes introduced by the new labor codes is consolidating various labor laws into four comprehensive codes. These codes cover wages, industrial relations, social security, and occupational safety. This consolidation simplifies compliance for employers and provides greater clarity for workers regarding their rights and entitlements.
However, implementing these new labor codes has been challenging. There are concerns about effectively enforcing these codes, especially in the informal sector, where labor practices need more regulation.
What are Old Labour Codes?
The old labor codes referred to the existing labor laws and regulations that were in place before introducing new labor laws. These old labor codes were numerous, complex, and outdated, leading to challenges for employers and employees regarding compliance, interpretation, and enforcement.
These old labor codes, while well-intended, were criticized for their lack of clarity, compliance procedures, and inability to adapt to the changing nature of work. These old labor codes struggled to keep pace as India became a more modern and dynamic economy.
One of the primary criticisms of the old labor codes was their sheer number, complexity, and issues related to the definition of wages. These codes also lacked provisions for social security for informal sector workers, who constitute a significant portion of India’s workforce. While they aimed to protect workers’ rights, their rigid and fragmented nature hindered economic growth.
Difference Between New and Old Labor Codes
- The new labor codes introduced in 2020 consolidate multiple labor laws into four codes- the Wage Code, the Industrial Relation, the Social Security Code, and the Occupational Safety. Old labor codes had fragmented laws like- the Factories Act and the Minimum Wages Act.
- The new labor codes require at least one year of eligibility service, benefitting employees with shorter tenures. In contrast, the old labor laws required employees to have at least five years of eligibility service.
- The new labor codes permit fixed-term employment across all sectors, offering flexibility to employers, while the old regulations were limited to specific industries.
- The new labor codes allow women to work night shifts with appropriate safety measures, while it was primarily restricted under the old labor codes.
- The new labor codes bring more clarity and protection to contract workers and redefine the relationship between contractors and contract labor. At the same time, there is no such relationship in the old labor codes.
Comparison Between New and Old Labor Codes
| Parameters | New Labor Codes | Old Labor Codes |
|---|---|---|
| Division of codes | Consolidate multiple labour | Various fragmented laws |
| Service for eligibility | Minimum one year of service for eligibility | Minimum of five years of eligibility |
| Employment | Fixed-term employment across all sectors | Limited to certain industries |
| Women’s Night Shifts | Allowed women to work night shifts | Restricted mainly in the old labor codes |
| Contract Labor | More clarity and protection for contract workers | There is no relationship between contractors and contract labor in these laws. |
- https://link.springer.com/article/10.1007/s10657-015-9514-z
- https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/intlr128§ion=60
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