The shaky foundation of Labor Law Reforms

Source: The Hindu

Relevance: To understand the challenges with the recent labour reforms

Synopsis: Government sought to reform the labour by bringing long-pending labour reforms. Despite their positives, there are many challenges associated with the labour reforms.


The government has brought out the next series of reforms that were deemed comprehensive and game-changing. The set of reforms was categorized into:

  • Code on wages
  • Industrial relations code
  • Occupational Safety, Health and working conditions code
  • Code on social security

The code on wages bill was enacted in August 2019 and the other three were enacted in September 2020.

Issues with the enactment of the bills:
  • The bills were passed in Parliament without proper consultation and amidst opposition boycott.
  • The government announced rollout from April 1, 2021, even though the State Governments were unprepared for it.
  • The speedy process encouraged the investors and employers.
  • However, the implementation on the ground is more symbolic than real. Courts have intervened by passing directives for urgent implementation. But, the response of the Government has been tardy.
Government arguments in support of the bills:

The government has given numerous arguments to support its stand.

  • According to GOI, it would extend universal minimum wages. It would also enhance Industrial security and social security for gig workers.
  • The industrial relations code also provides for recognition of trade unions by employers, which has been eluding for over 7 decades.
  • It also had benefits for employers by providing them flexibility like relief from framing standing orders for firms.
Challenges with the Bills:

The Government has failed to provide legal visibility to millions of unorganized and migrant workers.

Havoc unleashed by COVID 19 on the labour market

  1. It led to more workers entering the informal market
  2. Led to the withdrawal of workers from the labour market
  3. It has increased unemployment
  4. There have been instances highlighting the concerns of Industrial safety. IndustriAll reported that between May to June, 32 major industrial accidents have occurred in India, killing 75 workers.

Implementation issues:

  • Even though the central Government announced enactment in August 2019, the notification for the constitution of the advisory committee came much late in March 2021.
  • Major states like Tamil Nadu, Kerala, and West Bengal have not issued draft rules.
  • States like Jharkhand, up, MP has only framed partial rules.
Way forward:

We should not look at symbolic implementation to achieve a better ranking in EoDB.

Timely and well-discussed legislation followed by a thorough implementation is the need of the hour.


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