Dear Friends,

We are developing day and night and soon going to become a three trillion economy. We shall now compete with other developed nations and even in some fields, we have leaved behind them. India is the second largest populated country in the world with 45% or more young and enthusiastic, literate force. Our youths are goral oriented and literate. We have given our best in the field of Information Technology, Space, Defence Equipment etc. We are still developing ourselves day to day. India will become world largest and the most developed economy in few decades.

The industrialisation brings with it various other social evils and factors to be checked. One of the biggest problems is labour exploitation, child labour, poor hygiene conditions, poor payments, unorganised workforce, illiteracy among majority of work force and they are vulnerable for exploitation because of their social condition and illiteracy and lack of education. Since labours are not in dictating condition. Labour had to accept unfair service condition as he is always on the receiving end. Our unorganised labour force required protection from the government, so that their rights should be protected and exploitation should be stopped and they are able to work in minimum working conditions.

The Government has passed various labour laws to protect the interest of workmen and promoted work unions, who are keeper of rights of workmen.

We know that India is a union of states and structure of government is federal in nature.

Article 246: The Constitution of India has divided powers or Central and State Governments. The powers of Central Government are giving in Union List-List I and power of State Governments has been defined in State List-List II. There are one more LIST-III called Concurrent List contains some powers which are exercisable by both Central as well as State Governments.

The entries numbers 22, 23, 24 & 36 delas with labour matters available in Concurrent List of the Constitution of India.

Earlier before introduction of New Labour Codes in 2019 there are numerous labour laws applicable in the country. These labour laws are cumbersome and dealing with labour problems and social security. In many labour laws the compliance requirements are the same and hence there are repetition of working, while complying with those labour laws.

The Government of India to remove those duplication and lacuna in various labour laws try to consolidate all available labour laws into four codes as follows;

1. CODE OF WAGES,2019-receivced ascent of President on 08/08/2019 and gazetted on 08/08/2019 and it consolidates below mentioned labour laws;

i) Payment of Wages Act,1936;

ii) Minimum Wages Act,1948;

iii) Payment of Bonus Act,1965;

iv) Equal Remuneration Act,1976.

2. INDUSTRIAL RELATIONS CODE,2020- received ascent of President on 28/09/2019 and gazetted on 29/09/2019 and it consolidates below mentioned labour laws;

 i) Trade Unions Act, 1926;

ii) Industrial Employment (Standing Orders) Act,1946;

iii) Industrial Disputes Act, 1947.

3. CODE ON SOCIAL SECURITY,2020- received ascent of President on 28/09/2019 and gazetted on 29/09/2019 and it consolidates below mentioned labour laws;

 i) Employees’ Compensation Act,1923;

ii) Employee’s State Insurance Act,1948;

iii) Employee’s Provident Funds and Miscellaneous Provisions Act,1952;

iv) Employment Exchanges (Compulsory Notification of Vacancies) Act,1959;

v) Maternity Benefits Act,1961;

vi) Payment of Gratuity Act,1972;

vii) Cine-Workers Welfare Fund Act,1981;

viii) Building and other Construction Workers’ Welfare Cess Act,1996;

ix) Unorganised Workers ‘Social Security Act,2008.

4OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE,2020– received ascent of President on 08/08/2019 and gazetted on 08/08/2019 and it consolidates below mentioned labour laws;

 i) Factories Act,1948;

ii) Plantation Labour Act,1951;

iii) Mines Act,1952;

iv) Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act,1955;

v) Working Journalists (Fixation of Rates of Wages) Act, 1958;

vi) Motor Transport Workers Act,1961;

vii) Beedi and Cigar Workers (Conditions of Employment) Act, 1966;

viii) Contract Labour (Regulation and Abolition) Act,1970;

ix) Sales Promotion Employees (Conditions of Service) Act, 1976;

x) Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;

xi) Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act,1981;

xii) Dock Workers (Safety, Health and Welfare) Act, 1986;

xiii) Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,1966.


1. CODE ON WAGES,2020 

  • Some definitions like Employer, Employee, Establishment, Wages and Worker are kept same in all codes.
  •  The definition of Establishment has been widened to include all types of establishments as follows “Establishment covers any place where any industry, trade, business, manufacture or occupation is carried on and include Government Establishment. Any establishment where even one employee is working will be considered as establishment.
  •  All employers and employee in any establishment are covered under these codes.
  •  The scope of Minimum Wages has been widened, the concept of Schedule Employment has been removed and hence all employers and employees covered.
  •  The scope of the provisions relating to Bonus has been more or less kept same as per earlier Payment of Bonus Act.
  •  The Overtime Rate should not be less than twice the normal rate.
  •  Full wage will be payable to part time employees also.
  •  The time limit for payment of wages has been made unform and same will be payable on 7th day of next month.
  •  Deduction from wages can be maximum up to 50% of wages.
  •  The Upper Limit for bonus in Payment of Bonus Act, Rs. 21,000/- has been removed.
  •  The contractors and sub-contractors have been specifically included in the definition of employer. Thus, a Contractor and Sub-Contractor will also be considered as employer.
  •  An Officer Inspector -Cum-Facilitator will be appointed by government, who will help employers in case of need.
  •  Provisions for claims under Code on Wages and its recovery from employer have been made.
  • Penalty can be imposed by an officer not below rank of Under Secretary of the State.
  •  Compounding facility provided under the act. Imprisonment will also be awarded in case of default.
  •  MNREGA has been excluded from Code on Wages.


  • Standing Orders on matters related to worker’s classification, holidays, paydays and wage rates, termination of employment and grievances redressal mechanisms is mandated to establishments with at least 300 workers, instead 100 workers.
  •  Prior permission of the government before closure, lay-off, or retrenchment mandated to establishments with at least 300 workers, instead of 100 workers.
  •  14 days’ notice is required for Strike and Lockout.
  •  The threshold for negotiating with trade unions reduced from 75% workers as members to 51% of workers.


  • Social security fund for unorganised workers.
  • Definition of employees expanded to include more workers like-inter state migrant workers, platform workers, film industry workers and construction workers. 
  • Gratuity Period reduced.
  • Central Government has power to defer or reduce the employer’s or employees’ contributions (under PF and ESI) for a period up to three months in the case of pandemic, endemic or national disaster.


  • Factory definition amended to 20 workers for premises where the process uses power and 40 workers, where the process uses no power.
  • Manpower limit on hazardous conditions removed and mandates applying Code on contractors employing 50 or more workers instead of 20 workers.
  • Daily work hour limit fixed at maximum of 8 hours per day.
  • Women will be entitled to be employed in all establishments for all types of work and employer required to provide adequate safeguards in hazardous conditions.
  • Workers earning a maximum of Rs. 18,000/- per month will be allowed to avail benefits like public Distribution System (PDS), building cess, insurance and provident fund, etc.


Since labour legislation is mainly “Benevolent” or “Beneficial” legislation. The basic philosophy behind labour laws is that “Protection” and it was realised that the employers and employees are not at equal bargaining positions. Thus, the position of employees will be protected so that they may not be exploited by the employers.

The   consolidation of various scattered labour laws will result in case of compliance. Uniformity in definitions will reduce disputes relating to labour matters. The Code cannot be termed as law of 21st century but this will ease way of doing business and correct lacunas and mistakes in previous clusters of labour laws. In compliance view, this a much-awaited step taken by the government. Because previous labour laws and other social security laws are losing their significance in this changing time. This is the time in which terms and conditions of utilisation of resources, whether it is natural, social, human and environmental have been changed and business world also wants some relief from previous acts. The new Labour Laws have been made more business friendly and government had tried its best to manage a balance between welfare of workers and welfare of business community.