Labour Laws in India – A Brief of The Reforms

Article about Labour Laws in India – A Brief of The Reforms

Published by

Oct 28, 2021

The labour laws of any country are the most vital pillars for millions of workers and labourers working in the country. In an endeavour to generate employment in the country and encourage foreign businesses to invest or incorporate their business in the country, the government of India has announced certain reforms to the laws. The Indian government and the state government are committed to facilitating the ease of doing business in India.


At the central level, the government has announced major reforms to the labour laws in India. Some of the key reforms announced last year are:


  1. Code on wages – this Code replaces the earlier laws - Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. It states that the central government will make wage-related decisions pertaining to mines, railways, and the oil sector. In contrast, the state governments have the power to decide regarding other industries. The Code mentions that wages include salary, bonus, allowances, and all other monetary benefits.
  2. Code on Social Security – the Code now covers the unorganized sector, including inter-state migrant workers, fixed-term employees, platform workers, gig workers, and more. It has been mandated that all the workers are registered in the national database and can be done on an online portal. Talks are on to create a Social security Fund too.
  3. Industrial Relations Code 2020 – the Code mentions that all industrial establishments that employ more than 300 workers need to classify workers as per the regulations mentioned in the Code. Also, the communication of working hours, leaves, holidays, wage rates, payday, employee termination, and grievance redressal procedures.
  4. Occupational Safety, Health, and Working conditions code

The 2020 Bill gives power to the state government to exempt new factories from being regulated by the Code's provisions. The purpose is to encourage greater economic activity. The threshold for coverage of the factory has also been amended.

Articles authored by Selena Parker