The Three Labor Codes Allows Social Security For Migrants, Gender Equality, Easy to Fire, And Much More

The Lok Sabha, on 22nd September, passed three labor codes; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code of Social Security, 2020.

The Industrial Relations Code and updates to the Occupational Safety, Health, and Working Conditions Code could not have come at a better time, what with the landscape of labor grappling with the post-crisis work environment following the coronavirus pandemic. The three labor codes are set to bring about milestone-level changes to the administration of workers across various cadres.

To all appearances, the bills were passed in a single day. In truth, the three labor codes have been debated and ratified over the past year, with the Tuesday in question being the day of the final signing, bringing them into formal existence. A lot of deliberation to define the body of workers and their eligibility of the benefits from the three labor codes has gone into these bills. The Modi government deploys these labor reforms to improve security and furthers fair practices for labor, including migrant workers.

The three labor codes were drafted and collated to bring several rulings, laws, and changes from the past decades under these three central bills. They do away with some archaic labor laws and bring about the necessary evolution to Occupational Safety and Industrial Relations – antecedents that have always existed in the organized sector of gainful employment, albeit under a longer list of acts and laws.

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The key takeaways from the three labor codes can be summed up in simple terms as follows:

  1. The Industrial Relations Code bill 2020 states that workers cannot go on strike unless a greater number of conditions than before are met, including a 60-day notice period. It is a collation of the Industrial Disputes Act of 1947, the Trade Unions Act of 1926, and the Industrial Employment (Standing Orders) Act of 1946.
  2. Employers in the industrial sector have an increased threshold for worker retrenchment without prior government permission – from 100 to 300 – that is to say government permission is not required in the event of a necessary mass hire and fire situation.
  3. Tantamount worker compensation and notice periods remain the same. Therefore, the welfare aspect remains unchanged whereas the flexibility at the employer-end increases. Fixed Term Employment Contracts can be drawn up without necessitating written permissions. By increasing the threshold of the standing order, more industries choose to hire a larger number of workers, leading to higher production figures.
  4. The Occupational Safety, Health, and Working Conditions Code focuses on the inter-state migrant and contractual labor, their work hours, leaves, and health conditions. The work hours cap off at eight hours per day and no more than six days in a week. If these limits exceed, the employer is liable to pay double the wages.
  5. This bill collates a total of 13 archaic labor laws including the Factories Act of 1948, the Contract Labor (Regulation and Abolition) Act, and the Mines Act of 1952. It also makes provisions for modern conditions.
  6. Migrant workers’ criteria have been expanded to include those with a monthly family income of less than Rs.18,000, in addition to the state and location of the contractor and the site of the actual work. Considering this income criterion is a first for the Indian Economy and legal system. Another first is the mandatory provision of bathrooms, bathing facilities, and lockers for all categories of workers – male, female, and transgender. Women workers can enjoy the same benefits, including the provision to attend work between 6 AM and 7 PM. In the event of women being employed in the night shift, their consent is mandatory.
  7. A special provision dictates that women who have had a miscarriage or medical termination of pregnancy cannot be employed for six weeks from the date of the event.
  8. Finally, the Social Security Code is now expanded to cover the unorganized sector, gig workers, and platform workers. This brings a welcome relief to employees of cab aggregators, food-delivery platforms, and freelancers. This means the workers in this category are eligible for a social security fund, which amounts to 1-2% of the annual turnover of the employer – in this case – the gig companies, for the first time.

In addition to these thoughtful, long-range changes, the Labor Ministry seeks to develop a national database of workers in the unorganized sector. This way, the Modi administration hopes to keep a map of available skills, route jobs for migrant workers, and make provisions from the Employee State Insurance Corporation, Employee Provident Fund Organization, and an annual medical check-up. The clear goal from these coordinated changes is a transition towards employee and youth welfare. They also aim for comprehensive coverage for the maximum number of workers.

The takeaway to be gleaned from the three labor codes with respect to the corporate structure is that a potential hire and fire, or closure of business can be handled with increased ease. Businesses will now find it easier to cut down loss-making outfits, while workers will gain exposure to a greater span of job families due to temporary employment opportunities.


  • 5 questions about the new Industrial Relations Code and the Occupational Safety, Health and Working Condition Code answered | OpIndia | 24 September, 2020
  • In the three new labour codes, what changes for workers and hirers? | The Indian Express |Anchal Magazine | 25 September, 2020
  • India Inc. loves new labour codes; experts say they will promote ‘ease of closing business’ | Business Today | Nirbhay Kumar | 27 September, 2020
  • How Modi govt’s 3 new labour codes were passed in Parliament, and the changes they will bring | The Print | 24 September, 2020
  • Easy to fire workers, social security for migrants, gender equality – 3 labour codes decoded | The Print Essential | Moushumi Das Gupta | 24 September, 2020

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