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Labour laws - Shanmugam IAS academy in coimbatore
Labour laws


What’s in news?

In the recently released budget, FM Nirmala Sitharaman, placed a proposal to replace 44 labour laws with four codes.

Key data’s:

The issues in the new provisions:

  • These codes are antithetical to the very idea of statutory protection of labour and dignified standard of living for workers.
  • Original labour laws were enacted after decades of struggle and were meant to ensure certain dignity to the working-class people

Starvation wage:

  • The most glaring instance of the government’s failure to support labour standards is the Ministry of Labour’s proposal to fix the national minimum floor wage at ₹178, without any defined criteria or method of estimation. But Ministry’s own committee recommended ₹375 as the minimum. 
  • This could lead to a dangerous race to the bottom by individual States, in a bid to attract capital and investments.
  • The four codes exclude over 95% of the workforce employed in informal units and small enterprises, who in fact are in greater need of legal safeguards.


There is a deliberate ambiguity maintained on wording and definitions of ‘employer’, an ‘employee’ or an ‘enterprise’.

Apprentices are not employees:

  • To minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees, at a time when evidence indicates that apprentices are made to do jobs of contractual as well as permanent employees.
  • The code even has a provision on “employees below fifteen years of age”, which can be construed as legalisation of child labour.
  • The code on wages legitimizes and promotes further contractualisation of labour, instead of abolishing it, by insulating the principal employer from liabilities and accountability in the case of irregularities on the part of the contractors.

Recoverable Advances:

  • This is linked to coercive and bonded labour, wherein distressed and vulnerable migrant labourers could be bonded to work through advance payments.
  • This is akin to modern forms of slavery, also encountered in rural labour markets.
  • The code also gives ample alibis to employers to evade bonus payments.
  • Non-payment of wages will now not be a criminal offence and penalties in case of non-compliance have been reduced. With this, seeking justice against unfair practices of employers has become even more difficult.

Way forward:

  • Proposed laws resemble ‘employer codes’ rather than ‘labour laws. The government wants to provide a “facilitative” rather than a regulatory and punitive environment for the owners, with “facilitators-cum-inspectors” replacing the “inspectors” who used to ensure implementation of various labour laws to aid employees.


Links to note:

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