labour law

This article is written by Jigyasa Agrawal, B.A.LL.B.(3rd year), Banasthali Vidyapith, Newai. 

“A nation may do without its millionaires and without its capitalists, But a nation can never do without its labour.” -Mahatma Gandhi

This article mainly deals with the enhancement of labour law for which the government proposed new labour codes in Parliament. As labour force constitute a major portion of the society and play a vital role in the development and progress of the country so, here to safeguard their interest there should be enhanced labour laws. To amend laws this is an ongoing process according to the needs of developing society. For this, after having many debates and discussions the government set to pare existing 44 labour laws into 4 codes. And this new bill is tabled in parliament session after consulted by all major labour unions. To streamline multiple labour laws into 4 codes which ensure that the process of registration and filing returns will get standardized and also standardized the various multiple definitions of labour laws. This bill helps investors and to accelerate the growth which promotes ‘ease of doing businesses’. There are 2 codes which move in Lok Sabha are Code on Wages Bill, 2019 and Code on Occupational Safety, Health and Working Condition, 2019. There are many benefits of this proposal by set a floor to universalize all provisions with some contesting issues while implementing this bill. There is also a chance of conflict arise between state and central government because of the federal feature of our country. But somehow this bill also further destroys the workers right as attacking the rights of workmen. This simplification and codification of laws is justified as long as worker’s right were protected and also ensure to not trickle down anyone’s right.

KEYWORDS: Proposed Bill, Codes, Labour Laws, Ease of Compliance, Streamline the Laws, Attacking Workers Right.

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The labour force or workmen constitute a major portion of society and play a vital role in the development and progress of the country. Due to fast progressing development or industrialization, there is a need to improve the relationship between employee and employers and safeguard the interest of labour. This result in evolving labour laws. Labour law, the varied form or structure of law which is applicable in all such matters as employment, remuneration, conditions of work, about union laws, social security, and etc.  Labour laws create the legal relationships between organized economic interests and the state to protect these interests, there are separate labour courts or tribunals established. Earlier, the scope of labour law is often limited to the most developed and important industries but now the scope of law is extended. Means a body of law originally intended for the protection of manual workers too.

Labour laws reforms are an ongoing and continuous process and the government has been introducing new laws and amending the existing ones in response to the emerging needs of the workers in a constantly dynamic economic environment.

Proposed Bill

So here, when there is a time to strike a major push in labour reforms, the government is all set to merge existing 44 labour laws into 4 and a Bill will be introduced in Parliament in their Ist session of 17th Lok Sabha beginning 17 June.

“The 44 labour laws existing right now would be put in 4 categories. The labour ministry will bring a Bill in Parliament in the coming session.” Union Labour Minister Santosh Gangwar said. This would decide after an hour-long meeting with Home Minister Amit Shah.

The decision has been taken at an inter-ministerial meeting chaired by Home Minister Amit Shah and attended by Labour Minister Gangwar, Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal, and Minister of Petroleum and Natural Gas Dharmendra Pradhan[1].  This bill will be possibly tabled in the second week of Parliament session and would be the first bill which is introduced by the 2.0 Modi Governments in Lok Sabha.

“All major labour unions in the country were consulted by the government before we took the decision to bring new labour laws,” Gangwar said. As this is not a new change brought, it was discussed many times before this but no action can be taken. Now BJP govt. take a step ahead towards to change and reform labour laws to make it easier for companies to do business in India and recapture the momentum which is lost in the past. So, here Finance Minister Nirmala Sitharaman said in Budget Session of Parliament-“The government is proposing to streamline multiple labour laws into a set of four labour codes.”

That will ensure that the process of registration and filing of returns will get standardized and streamlined with various labour related definitions getting standardized it is expected that there shall be less dispute.” The four labour laws will set pare together the existing 44 laws that deal with wages, social security, industrial safety and welfare and Industrial Relations.

Social Security Code including the Employees Provident Fund, Employees State Insurance Corporation Act, Maternity Benefits Act, Building and other Construction Workers Act and the Employees Compensation Act will be merged to create a single social security law or code. Similarly, several Industrial Safety and Welfare Laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, will be merged to create a single code on industrial safety and welfare. Likewise, the Minimum Wages Act, the Payment of Wages Act, the Equal Remuneration Act and a few others are being merged to create “single legislation called Wage Code Act”. The fourth law, the Labour Code on Industrial Relations, will combine Industrial Disputes Act, 1947, The Trade Unions Act, 1926, and the Industrial Employment (Standing Orders), 1946[2].


The objective of the exercise is to “take a relook at laws that are perhaps a hindrance to growth as well as job creation.” Senior bureaucrat of the labour department said.

By introducing this new provision of merging laws, there is an intense to increase legislation protection of minimum wages to the entire workforce. This will get benefitted to 50crore workmen. Simplify 44 labour laws into 4 with the purpose of-

  • Merging economic situation
  • Facilitate easier compliance by the establishment
  • Promote ease of living
  • Ensure labour welfare
  • Provide Wage and social security for workers

“The Proposed New Labour Laws will help investors and is expected to accelerate growth”, another official said.

The BJP government moved two Lok Sabha Bill on Tuesday to legislate the Code on Wages Bill 2019 and the Occupational Health, Safety and Working Conditions Code 2019. As from 1991, there are debates of many reforms regarding labour laws, but in 2002, the Commission made their recommendation. The statement and objects and reasons of the two bills rely on the recommendation submitted by 2nd National Commission of Labour 2002. Those were rejected by all trade unions and not implemented.[3] But now in 2019, BJP govt. claims that these Bills emerged through and after discussing with tripartite i.e. Trade Union, Employer, State Government.

Code on Wages Bill, 2019

This is first in a series of 4 labour codes, which is proposed by the government in these new labour reforms. The Rajya Sabha, on Friday (2 August 2019), passed this bill, which allows the centre to set a minimum statutory wage, a move expected to benefit 500 million workers across the country. The Bill has been passed in the Lok Sabha last week and will now go for president’s assent following which it will become an Act.[4]

This is not a new bill, many times it already discussed in Parliament, as this bill was first introduced in Lok Sabha in 2017 and was referred to the Parliamentary standing committee, which submitted its report on December 2018. However, the bill lapsed after the dissolution of the 16th Lok Sabha.[5] Under the Code on Wages, the labour ministry plans to streamline and amalgamate 4 related statutes- The Minimum Wages Act 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

In this Code, the minimum wage fixed by the centre will no longer be based on employment but on geography and skills. In this bill, ‘the code ensures minimum wages along with timely payment of wages to all employees and workers. Many unorganized sector workers like agricultural worker, painters, person working in restaurants and dhabas and chaukidars, who mere outside the ambit of minimum wages, will get legislative protection of minimum wages after the bill becomes an act’. Besides, “the bill will ensure that employees getting a monthly salary are paid by the 7th of the following month. Those working on a weekly basis will be paid on the last day of the week and daily wages should get them on the same day.” Gangwar said.

Bill consist ‘this code seeks to universalize the provisions of minimum wages and timely payment of wages, which will be computed based on minimum living conditions. It is envisaged that states will notify payment of wages to workers through digital mode.’ The provisions of code apply to workers below a particular wage ceiling working in Scheduled Employments only.

“This Bill would ensure Right to Sustenance for every worker and intends to increase the legislative protection of minimum wage from existing about 40% to 100% workforce,” Gangwar said in Lower House. This bill will be a Historical step for ensuring legislative protection for wages to 50 crore workmen in the country.

Code on Occupational Safety, Health and Working Condition

Labour Minister Santosh Gangwar has already tabled code on occupational safety, health and working condition in the Parliament for consideration and passing in the ongoing monsoon session. The OSH code will amalgamate 13 laws relating to factories, mines, dock workers, building workers, plantations labour, contract labour, inter-state migrant workmen, working journalists and motor transport workers, among others.

This code, among other provisions, enables women employees to make a choice on working night shifts and consent need to be taken from women to work beyond 7 pm and before 6 am. This code also enables the courts to give a portion of monetary penalties (up to 50%) to workers who are victims of accidents in the workplace, or their kin. Presently, there are different applicability thresholds for welfare provisions like crèche, canteen, first aid and welfare officer in different Acts.

The proposed code envisages uniform thresholds for welfare provisions for all establishments to the extent practicable.[6] And this code applies to all establishments that employ 10 or more workers. Other 2 codes are yet too introduced.

Case Laws

 In Inder Singh and Ors. Vs Labour Court, Jullundur and Anr.[7], dispute arose between respondent and petitioner regarding minimum wages for their proper computation. And here court provides a speedy remedy to individual workmen to execute their rights under industrial disputes.  Mainly dispute how much minimum wages should be given.

In Som Mittal vs. Govt. of Karnataka[8]  this is a case of late-night working hours for women as in case of complaint and any rape regarding late-night work. Government has to create a proper agency to cease such an evil system but doesn’t mean to restrict the women’s right. Women also can work late night hours.

In Binod Rao vs. Minocher Rustom Masani[9], dispute because of to not set a proper norm in industries regarding safety and health. Even state have to legislate proper safety norms without any arbitrariness and in proper universalize for all.

Benefits of Proposal

As many as labour laws are more than 50 years old and some even belong to the pre-independence era, then it is essential to introduce and simplifies existing labour laws.

  • The bill simplifies, amalgamates and rationalizes the provisions of 13 central labour laws.
  • It expands the ambit of the provisions relating to working conditions of cine, theatre workers and journalists.
  • It expands the definition of family to include dependent grandparents.
  • It allows the women employees to work at night
  • The bill simplifies the definition of wages
  • It universalizes the provisions of minimum wages and timely payment of wages to employees irrespective of the sector and wage ceiling.
  • It seeks to increase the legislative protection of minimum wage to 100% of the workforce.
  • Minimum wage will be fixed based on geography and skills.
  • As India has a federal form of government and has federal features, here labour law comes under concurrent list, so here every state has right to set a minimum wage for their respective state but according to the guidelines given by the central government.
  • To cease the arbitrariness of State, central government only gave power to made legislation regarding National Minimum Wage equivalent or not more than which is prescribed by the central government.
  • Bonus gave to all eligible workers without any arbitrariness.
  • As to avoid gender discrimination, equal remuneration must pay to all workers with equal minimum wages.
  • This bill set a floor for the certainty of provisions and for universalizing all provisions of labour laws.
  • Facilitation for ease of compliance of labour laws will promote setting up of more enterprises which raised the country on the global index of ‘ease of doing businesses.
  • Bills suppose to get benefits of ‘use of technology in its enforcement, reduce violations and use to transform the entire system of labour inspection.’
  • ‘Employers are no longer bound by law to co-operate with inspectors. The newly designated ‘inspector’s-cum-facilitators’ under the bill are meant to assist employers in complying with the law and can even forgive them for violations’ which ensure better compliance and implementation.
  • Removing and eliminating the multiplicity of definitions and authorities. Taking effort in advancing codes is to ‘simplify and rationalize’ the law.
  • Companies will soon not require multiple registrations, as they do now under a plethora of labour laws, because the government has proposed one license, one registration and one return for establishments for executing projects for 5 years. This promotes ‘EASE OF DOING BUSINESS INDEX’.

Currently, India is required 77th on the World Bank’s Ease of Doing Business Index. The no. of labour law’s provisions will reduce from 622 to 134 under the proposed code. “This would result in simple legislation with flexibility in changing the provisions in tune with emerging technologies and makes the legislation dynamic.” The government said.[10]

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Challenging Issues

Everything new things or bills have to face some challenges here our government has to face many contests while proposing new labour codes:

  • How someone cans determine the amount of minimum wages for states at their different regions having different categories.
  • In what manner, officials and authorities are to be appointed because of compliance and merger of labour laws.
  • The implementation of labour law takes at least 6 months and it is a challenge to become this implementation as a smooth process.
  • How to convince the workmen about all labour laws. And before passing it all, it’s being quite tough to convince or discuss labour reforms with tripartite.
  • Those who do not come under a plethora of employees so, how and which legislate should apply to them. E.g. Uber Driver is not an employee. So, what about law and provision to safeguard them. 

Can Conflict arise Between State and Central Government?

As all know, India has a federal feature of government. And also labour law come under the concurrent list. So, both have the right to legislate labour law with their respective jurisdiction. But there are many issues come forepart of all that new labour reforms are sticky one and inflexible. As there is a provision that state can legislate National Minimum Wage according to their own requirements but it should be equivalent and not less than wages prescribed by the central government.

The problem faced by the state that-

If centre fixed Rs. x, then the state has to legislate amount of minimum wage either x or +x but if in a situation of downwards of economy, centre reduces the value of minimum wage e.g. x-10. But in this situation, the state can’t reduce their own legislature because it can’t be less than x. This brings inflexibility and may arise conflict.

New proposal bill doesn’t have any power to state government because all laws are getting universalized and will all discretion of the central government. As there is many conflicts arises earlier on many subjects and issues but this legislation gave benefit to 50 crore workmen. So, Many states perhaps takes incentivized for having this law legislation to what extent may be conflicts can be avoided and many states would want to have it implemented and would have to be consonance with the central government.

Attacking the Rights of Working Class

“The proposed codes reflect an evil design to do away with all labour protection.”

Irrespective of their ideological persuasions, trade unions (INTUC, CITU, AITUC, and BMS) strongly gave their contentions against several reform proposals.

  • This effort to legislate the labour codes is done without following any procedure even also disrupted and disrespected the suggestion of the tripartite system and virtually disbanded the Indian Labour Conference, which leads to protest by trade unions.
  • Referring to the Industrial Relation Code, registration of trade unions being given arbitrary power to refuse registration, it would become virtually impossible to register new unions, even government itself deciding who can be from within an establishment and without.[11]
  • Government could control all the funding and spending money by unions also to impose big fines in the case of helping solidarity strikes.
  • National Minimum Wages was pointless as this and other rights would not be enforceable through labour courts.[12]
  • The entire system of labour inspection would be replaced by self-certification. This would mean that company owners would be able to say they have less than 10 workers and one exempt from various laws while they actually have a hundred workers. But there will be no one to inspect and find out the truth, no one to enforce any law, which leads to deception of companies.[13]
  • There is a big danger in forthcoming code on industrial relation that will do away with basic working-class rights including the right to form a trade union, the right to collective bargaining and strike.[14]
  • Without any proper consultation with central trade unions, and that changes in labour laws were entirely for the benefit for the business class not for the working class.[15]
  • The proposed industrial relations code with demolishing the right given by ILO’s Centenary Declaration of 2019 which says that all government are bound to implement the ILO’s fundamental principle including the right to association.[16]
  • Attacking the rights of working-class by bringing new provisions such as ‘fixed-term employment’ instead of ‘permanent jobs’. No worker on a fixed-term contract would be willing to join a union and fight for their rights.[17]
  • The inappropriate formula for fixation of a minimum wage, whereas old formula assumed a workers wage would support a family of three units. Even demolish the right of overtime, bonus or paid salary.[18]
  • The conditions of workers are very bad, said that after the passage of the Bill, the worker will have bargaining power only as long as the management makes a profit. There are no unions for the IT and call centre industries, where workers are losing basic rights.[19] 


As many as labour laws are more than 50 years old and some even belong to the pre-independence era, there is an urgent need to simplify and universalize all the labour laws into 4 codes. Even our government takes various major steps to eradicate the evils in labour system. But this simplification or codification of the laws is justified as long as workers right were protected, government should assure that these new proposed codes should not attack the rights of any workers. These new codes are hardly implemented and state government should provide proper machinery to monitor and penalize defaulting employers and government existing laws are not trickle down via proposing new bills.

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  1. www./business article-amp/government-to-pare-existing-44-labour-laws-into-four/.html
  3. www.newsclick,in


[1] www./business article-amp/government-to-pare-existing-44-labour-laws-into-four/.html




[5] Ibid


[7] AIR1969 P H 310

[8] Criminal appeal no. 206 of 2008

[9] (1976) 78 BOMLR 125


[11] www.newsclick,in

[12] Said by senior advocate, Colins Gonsalves

[13] ibid

[14] Said by Dev Roy head of trade union

[15] Said by Deepak Sharma of INTUC

[16] Said by Vidya Sagar of AITUC

[17] Said by Shyambir of Inkalabi Mazdoor Kendra

[18] Said by Pawan Kumar of BMS

[19] Said by MP Prof. Saugata Roy of AITUC


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