New Labor Codes: Preparing For Post-pandemic Employment And Economic Recovery

The new labor codes to be announced officially in India in the coming months are expected to be in keeping with the times. They shall pave the way for recovery from the pandemic for a country ravaged not once but twice over in the past 18 months. India’s corporate sector and industry, in general, have kept a focused eye on sustenance and revival in the economic sense, and the labor codes are sure to lend a helping hand in this direction.

Going back to the basics

The effort of consolidating 29 labor laws into four labor codes is not only a matter of convenience on the judiciary and legislative fronts but also to remove the question of obsolescence in changing industry and workforce dynamics. This is why the labor laws to be announced soon are going back to the drawing board, defining terms, fines, and repercussions. For instance, the new Code on Wages goes on to define terms such as ‘wages’, ‘employees’, ‘contractors’, and ‘wage period’. The criteria for payment of bonus, conditions under which pay may be held back, and grievance redress procedures are clarified. The new Code on Wages also goes on to include transgender workers and mandate gender neutrality in pay as part of the Equal Remuneration Act. The Code on Social Security recognizes gig and platform workers, making sure that their interests are recorded and kept in mind while deciding policies and floor rates.

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New Labor Codes:Flexibility cuts both ways

Through the new labor codes, the judicial bodies appear to be able to deal out fair practices of employment and contractual labor arrangements for workers while also honoring the interests of employers. Occupational Safety, Health and Working Conditions Code covers the workplace conditions for all workers and women workers in particular. Night shifts are allowed for women workers if certain conditions of providing safety and sanitation facilities conditions are met. On the other hand, termination of workers in factory, mine, or plantation categories which used to require government approval for 100 workers or more is now changed to 300, allowing workforce planning for short-term projects to become easier.

Getting ready for the execution of new labor codes means getting ready to furnish proof of compliance for a shorter period (five years of historical records as opposed to an unlimited number) in the case of compliance for the Employees’ Provident Fund. This is yet another way companies are able to breathe a sigh of relief and focus on providing similar benefits to their gig workers and contingent staff as they do their full-time payroll staff. The Industrial Relations Code now will allow fixed-term employment so that companies will not be obliged to hire staffing companies or manpower vendors for short-term positions and projects. Instead, they will be able to provide benefits such as gratuity (on a pro-rata basis) for fixed-term workers – a proceeding that concludes a win-win arrangement for both employers and employees. Employers have more control over the employee experience and work culture while fixed-term employees avail benefits on par with their full-timer counterparts.

The draft rules based on the new Labor Laws are formulated and being debated. The ratified declarations are set to be announced by at least 15 states, with no state being allowed to declare a minimum wage lower than the national floor rate – another fall out of the new labor laws that is awaited. This comes after high-level discussions between labor secretaries of the states most prominent in creating employment such as Karnataka, Gujarat, Maharashtra, and Uttar Pradesh, among others, and the Confederation of Indian Industry (CII). Regulation is set to ease in the direction of more favorable conditions for employment creation and welfare of all the stakeholders concerned.


  • Labour codes likely to be notified in next four months | ETNow Digital | TimesNow News | JUL 07, 2021
  • How to Prepare for India’s New Labor Laws | SHRM | Shefali Anand | APR 22, 2021

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