Delay in Unified Labour codes 

JUL 26

Mains   > Economic Development   >   Indian Economy and issues   >   Labour reforms


  • The Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Code on Occupational Safety, Health and Working Conditions (2020) have not yet been implemented.


  • The four labour codes are an amalgamation of 29 Central laws and about 100 State laws that are similar to various Central laws.

I. Code on Wages, 2019:

  • It seeks to regulate wage and bonus payments of employees.
  • According to the Code, the central government will fix a floor wage, taking into account living standards of workers.  Further, it may set different floor wages for different geographical areas.  
  • The minimum wages decided by the central or state governments must be higher than the floor wage.  The Code prohibits employers from paying wages less than the minimum wages. 
  • The State or Central Government revise the minimum wages every five years.
  • The central and state governments will constitute advisory boards to advise the governments on various issues including fixation of minimum wages

II. The Industrial Relations Code, 2020:

  • It amalgamates three existing laws and expands the definition of worker to include persons employed in a skilled or unskilled, manual, technical, operational and clerical capacity. The code also introduces a new provision for fixed term employment.
  • It also improves ease of doing business by allowing firms with up to 300 workers to go ahead for lay-offs, retrenchment and closure without government permission.
  • Three labour codes:

III. Code on Social Security, 2020:

  • The Code subsumes nine laws and empowers the Centre to notify various social security schemes like the EPF, EPS and ESI for the benefit of workers in all sectors.
  • Firms employing more than 20 workers have to mandatorily report vacancies online under this code.

IV. The Occupational Safety, Health and Working Conditions (OSH) Code:

  • It amalgamates 13 existing labour laws and applies to factories having at least 20 workers if the manufacturing process is being carried on with the aid of power and 40 if the manufacturing process is being done without power.
  • It regulates working hours and provides benefits for inter-state migrant workers.

Note: Important provisions of the codes, its significance and issues have already been covered in a previous article.

Please refer:



  • Subject in Concurrent list:
    • As labour is a concurrent subject, both the States and the Centre will have to prepare rules for the codes. According to a recent report, only 24 States have so far published draft rules to all four codes.
  • Delays in drafting:
    • There is delay in framing rules by the States as drafting, publishing and holding consultations with stakeholders is taking considerable time.
  • Opposition from stakeholders:
    • The Opposition parties have objected to the way the three codes were passed in Parliament in just two days without much discussion.
    • The employers are worried that further increase in the wages will hamper their profits in a recession-hit economy.
    • Trade unions allege that the codes will result in taking away whatever little social and economic security is left in the employment sector. They have held three general strikes against the codes so far.
  • Delays in supporting enactments:  
    • Setting a national minimum wage is important in the implementation of the Code on Wages. But the SP Mukherjee committee, which is working towards the issue of minimum wages, is yet to complete its task.
    • Expansion of ESIC network is important for the success of social security code. But the Centre had recently said that the ambit of ESIC will be expanded to all districts within two years.
  • Delay due to Covid:
    • There were plans to implement the code as early as 2019. However, Covid and the subsequent lockdown affected the roll out.


Q. The new Labour Codes give an impetus to economic activity without adversely affecting the interests of workers. Critically analyse.