New Labour Codes On Wages, Social Security And Occupational Safety And Health

A Rehash of anti-worker policies, to serve imperialist and Comprador  Big Business interests, in the  name of ease-of-doing-business labour1


       There is little that is new in the  labour codes  on wages, social security and occupational safety and health; the measure promises  a few sops, but further nullifies workers’  rights and dilutes enforcement of labour laws. 

     This is Part-2 of an  article by this writer comparing the new Code on Industrial Relations with the corresponding existing laws merged into it. (published in on 20-11-2020).  That  Code, inter alia, deals with certain matters related to democratic rights of workers. Certain important aspects in regard to the democratic rights of workers are discussed in the earlier article. One more  important change in the new “Code on Industrial Relations” against workers  is that the time limit to raise an “Industrial Dispute” before the conciliation officer is further reduced to “two years” from the existing “three years”. When the Government frames rules and schemes under the code some  more that are detrimental to the rights and interests of workers would be exposed.

The new codes which are discussed in the present article, namely, The Code on Wages,2019, The Code on Social Security, 2020 and The Code on Occupational Safety and Health, 2020 deal mostly with the matters related to  wages, welfare and Social Security etc. of workers. Some important aspects which are much relevant to the struggles of working-class are dealt with herein.

Many   provisions of these new codes are, in essence, repetition of that of the corresponding existing laws like The Minimum Wages Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act,1965, The Payment of Gratuity Act,1972, The Employees Compensation Act,1923, The Factories Act,1948, The Employees Provident Fund Act,1952 and The Employees State Insurance Act, 1948 etc. Some of the provisions in these existing laws  which are formally in favour of workers have been deleted in the new codes. The provisions that are disadvantageous to workers are retained. Some provisions that are more favourable to employers and disadvantageous to workers are added.

The  existing Acts were brought into force in different historical and political contexts. Some of them were enacted by the British colonial government with a view primarily to contain and divert the ensuing revolutionary movement of the working-class of India that was taking inspiration from  the victorious  Russian working-class revolution of 1917. Some of them were enacted by the government of the Republic of India, in its early days, as part of the political programme of making the people of this country believe that the “independence” is real and the “Constitution” is democratic. (The employees Provident Fund Act,1952).Some of these Acts were brought by the Indira Gandhi regime, at a time when another revolutionary situation emerged again in the country, as also in a bid  to masquerade the policies of government   as  “socialist” and to keep the official left( as against communist revolutionaries fighting for “people’s democracy”) in support of the regime. (The Payment of Gratuity Act, 1972).  Some of the existing laws relating to Unorganised  Sector Workers etc.  were enacted  in the wake of neo-liberal policies.

         Weaning  away the working-class from the  path of revolutionary struggles  by way of encouraging economism,  creating  legal  illusions  and dividing  the workers into number of categories and segments had  been the common and   key objective behind the legislation of all these Acts.

Now, the stated goal of simplification of labour laws is to cater to a policy of ease- of -doing-business, which is in  effect ease of loot and plunder by big  businesses.

      In all these existing Acts,  the State (appropriate government) is vested with certain  powers and responsibilities rather than creating enforceable rights for the workers. Such  powers and responsibilities of the government are two-fold, one is enforcement and the other is adjudication which are delegated to the Labour Department. The enforcement and the adjudication gradually became empty words as  the corrupt system increasingly degenerated with the growing domination of corrupt officials in the Labour Department supported by corrupt political leaders of ruling classes.

Further after the advent of Neo-liberal policies many state governments have issued G.O.s and circulars, though not lawful, almost nullifying the enforcement by restricting inspections and penal actions against the erring employers  by the labour officials concerned. The inaction for decades on the part of both  the central and state governments  in respect of amendments that needed  to be made  to various  wage and other ceilings over  applicability  of these Acts, certain erroneous judgements of various courts in favour of employers and against the workers,  the lack of strict enforcement, the absence of guarantee to the democratic rights to organise and struggle (see earlier article) and the weakened trade union movement, all,  kept the benefits and welfare said to have been provided for  by these Acts out of reach of  the overwhelming majority of the workers.



With regard to “wages”, the crux of the bone of contention between the employers and employees and the pivot on which the entire capitalist system is moving, it is to be noted that  there is no law in our country  prescribing how much wages a particular category of employer should pay to a particular category of employee/worker. There is no   specific  enactment  to prescribe how the wages, payable to a  particular category of worker working in a particular establishment/industry,  should be decided. It is the discretion of the employer initially to decide the quantum of wages payable to any workman in his establishment. Later on the same would be decided depending on the collective  bargaining  capacity of the workers, if at all one exists, but not on the basis of  any statutory right or provisions. There are certain judgements of  various High Courts  and Supreme Court upholding  certain principles  relating  to enhancement of wages, which may be of some help in adjudication of  related  disputes but not conferring any rights on workers nor fixing any statutory obligation on the employers in this regard.  However , for a long time, workers and unions stopped fighting  in Labour Courts for wage increases with the experiences  of prolonged  proceedings of courts, of never ending litigations and finally of not getting the justice. There is an enactment  prescribing only “minimum wages, which are expected  to meet only bare  minimum  necessities, but not any actual and justified wages to be paid to a specific worker for a specific kind of work in a specific industry.

         The government claims that the definitions of “workman” and “wages” are different in different labour laws and that now a single definition is fixed for all purposes.  This is true to some extent. However, the substantial and notable points  are, the continuation of exclusion of House rent allowance and Conveyance allowance from the definition of wages ,  and the legitimisation of exploitation through  division of wages into “basic wages” and “allowances”   by fixing the proportions of these components.

Wages are divided  into “basic wages” and “allowances” by the employers to reduce the payments of PF contributions, overtime wages, leave wages, bonus and gratuity.

The ratio of these two components in the wages  is varied across industries.  In many establishments  the allowances exceeds the basic wages, some where vice-versa and  some where their proportions are equal. Now, in the new Code it is enacted that if the allowances exceed 50% of the Wages, such amount of allowances above 50%  shall be treated as basic wages. Thus the division of the wages into two components and the exploitation of workers with it are more  legitimized. “Simplifying”  exploitation! It is   a relief,  to some extent, to those whose wages are paid more in  allowances than in basic wages.

The  government  further claims that  every worker is covered under the eligibility to receive the said  “Minimum Wages” that would be prescribed by the government under the Code. True, earlier, only the workers working in certain establishments which were notified in the schedule to the Minimum Wages Act [schedule employments] were eligible for minimum wages prescribed by the government under the Act. Those workers doing certain jobs which are not schedule-employments under the Act cannot claim such minimum wages. For a long time many  employers, both in public and private sector, have been denying payment of minimum wages to several categories of workers stating that those workers are  not covered under the “schedule employments”.  Similarly the casual and contract workers were also denied, for years and decades,  payment of minimum wages by several employers stating that the former are not on the permanent rolls of the establishment.

The minimum wages prescribed by the government under the Act are common to all establishments of a particular category irrespective of  their  size, paying capacity, profitability and financial  condition. For instance a worker of a particular category working in a big  shoe making company like Bata and one working in a small and medium level local shoe making industry are  entitled for the same  amount of minimum wages. Similarly,  workers of all ages and having different lengths of services are also  entitled for the same amount of minimum wages.  An young  worker of a particular category who joined today in service and one  who would retire the next day would receive the same amount of minimum wages.

The employers are classifying the wages  as “Basic Wages” and “Allowances”. The law as interpreted by the Supreme Court says that in whatever form the employer pays the wages, if the total wages i.e., the sum of both “basic wages and all  “allowances “are equal to the minimum wages prescribed under the Act, there would not be any  violation of the Act. This may be true in respect of regular wages payable for a particular work period, but it should be noted that with the said  interpretation and classification of wages the workers are heavily losing when it comes to payment of “bonus”, “overtime wages”, “leave wages” and “gratuity” etc., as only the “basic wages” will be taken into account for computing the amount payable against these benefits and nothing will be paid on the “allowances”.

When any employer fails  to pay minimum wages, the workers have to approach an authority appointed under the Act and file an application for payment of the same. This application has to be filed within six months of the date on which the said minimum wages are payable. The workers have to face several hurdles and difficulties in filing and pursuing such cases. Even if the outcome is in favour of workers the employers would obtain stay orders from High Courts. Many managements of medium and heavy industries including that are owned and managed by the central and state governments, like Railways, RTCs etc., deliberately denied payment of minimum wages to tens of lakhs of workers. Extending the working hours, formally or informally, from 8 hours to 12 and more hours is one way of making a mockery of payment of minimum wages which are fixed for 8 hours. Unless there is an honest and strong trade union nobody looks into the ground realities regarding the blatant violation of the law in this respect.

Further the determination and fixing/revision of minimum wages has to  be done by a board appointed by the government for every five years. For the last 20 years this five years time  was practically extended even to 10 years  with government not appointing a board and not taking up the revision. The experience in Andhra Pradesh provides a striking example to understand the callousness of the governments in this respect. Minimum wages were fixed latest  by 2007,  2011 and 2012 for most of the schedule employments under Minimum Wages Act. Till this date they have not been revised. The TDP government, at the fag end of its tenure in 2019 appointed a board which proposed a draft rates of revised minimum wages which are ironically either almost equal to the existing rates without any tangible increment and ludicrously even lesser than in respect of certain categories of schedule employments. The matter has seen no further progress with the general elections in April 2019. Even the new government of YSRCP/Jaganmohanreddy is in no hurry to look into this matter as this finds no place in their priorities.

A formula was adopted to determine and fix the minimum wages in which quantities and  weightages of  minimum consumption of food and cloth etc., was incorporated. Apart from its correctness or otherwise, it is important to note that the expenditure in respect of education, medical care, accommodation and transport, which consume most of the earnings of workers, more so in the present conditions of commercialization of all sectors,    are not properly accounted  in determining these minimum wages. This aspect itself is a matter of serious debate.

The provisions related to “minimum wages” in the new Code on Wages, 2019 have not addressed any of the flaws, deficiencies and difficulties in the existing corresponding Act which are discussed above. The only solace offered is that instead of making the Act  applicable to only “schedule employments”, the present  Code stipulates that every employer shall pay minimum wages to every employee. While it is certainly a welcome and positive development, with a sea of infirmities explained above and given the political and economic conditions which make the enforcement a dream, what would happen in practice with this expansion of the coverage remains a big question. ( about the further weakening of enforcement in  all three Codes, I will discuss at the end of the article  to avoid repetition.) In the new Code a concept of “National floor wage” is introduced. On the face of it, it seems that no state government should fix minimum wages below this floor wage, but it is also true that no state government would fix minimum wages more than the said floor wage. It may also become an incentive to some  state governments to reduce the minimum wages in their state to the level of “national floor wage”.

In the  new Code   the limitation period for filing an application before the authority concerned in respect of non-payment of minimum wages is extended to three years from six months as per the existing Act.


        The existing Payment of Wages Act, 1936, which is also merged into the new Code on Wages, also does not  contain any  provisions with regard to determination, fixation and enhancement of wages but only provides for certain procedures in respect of, mode and time of payment of wages, deductions to be made from wages and claims for payment of wages etc. However, the wage ceiling fixed for applicability of this Act was not amended/enhanced  for a long time and was kept at low rates even after some amendments which left   a vast majority of workers outside the purview of the Act. There is no significant difference between the provisions of the existing Act and those of in the  new Code on Wages.

        The Payment of Bonus Act,1965 is one another important Act that was merged  into the new Code on Wages.  This was hailed as  a  remarkable legislation that provided for “sharing of Profit” by workers. The law provides for payment of a minimum Bonus( after a passage of five years after the business is commenced) to a worker  equal to 8.33% of his annual earnings, which approximately equals to his wages for one month, irrespective of the fact that whether the establishment concerned earned any profit or incurred loss. Actually it was being deemed as a deferred wage, in the given low wage situation,  as a garnishing. If the establishment earns profits a worker could get a bonus up to 20% of his annual earnings, that would be arrived at as per a formula prescribed by the Act. So far so good. Regrettably, there are two kinds of ceilings of wages in this Act which deprive most of the so called organised sector workers of this much praised profit sharing. One is a ceiling for the total applicability of the Act and the other in respect of computation of the amount of bonus to be  paid to a particular worker. Until a much belated amendment,   for  the workers who receive basic wages(including Dearness Allowance)  more than Rs.3500 per month the Bonus Act itself was not applicable. Thus overwhelming majority of workers were made ineligible for any Payment of Bonus. Further, even in respect of workers whose wages are more than Rs.2500 per month the Bonus payable to them is to be computed taking their monthly wages only as Rs.2500. The secret of capitalists (not!) sharing their profits with the workers is best explained by these two lethal “ceilings”. These ceilings were increased to 6500 and 3500  respectively in the year  2007  and further to 21000 and 7000 in the year 2015.   Even after these enhancements a considerable section of workers are outside the applicability of the Act. Even if the  prescribed “minimum wages” are more than the second ceiling  the Bonus was paid only as per the ceiling but not as per the minimum wages. This was corrected vide the amendment of the Act in 2015 and minimum wages are also included to the second ceiling. Further only basic wages are taken to compute Bonus and the allowances, which counts nearly 50% of the total wages)  are not considered. The maximum Bonus of 20% is to be calculated on the basis of the audited financial reports of the companies. For a long time it has been the practice of companies to manipulatively show reduced profits  in the annual reports. Thus Bonus Act is one of the best examples for how to make a big offer and nullify it before it is actually passed over into the hands of the receiver. Indian State and Polity  excelled  in  this art. The provisions related to the payment of Bonus in the new Code on Wages are mere repetition of that of the existing Act.

It is to be noted that a large chunk of workers who are engaged in the form of casual and contract workers are not being paid this bonus. Contract workers in some industries where there are strong unions could get only the minimum bonus of 8.33%, only after bitter struggles for the same.




The main existing Acts merged into this new Code on Social Security are The Employees Provident Fund  And Miscellaneous Provisions Act, 1952, The Employees State Insurance Act, 1948, The Employees Compensation Act,1923,  The Maternity Benefit Act, 1961,   The payment of Gratuity Act, 1972, The Building and Other Construction Workers Welfare Cess Act 1996 and The Unorganized Workers Social Security Act, 2008.

        The Employees Provident Fund Act is applicable to every establishment in which 20 or  more workers are employed. However, in many establishments, the  employers are not implementing this Act on their own. In a considerable number of establishments the employers are not implementing this Act. In most of the establishments the Act was implemented only after a trade union was formed and fought for the same. The state Labour Department has no powers to enforce this Act or to take any penal action against the employers for not implementing the Act. Only the Employees Provident Fund Organisation, EPFO,  working  under the central government is empowered for the same and its performance in enforcing the Act is not as it should be, leaving so many employers scot free.

Many employers are employing hundreds of workers as “casual” for several years and evading implementation of the Act. Many workers feel that they are made permanent when the employer starts deductions of PF contributions from their wages. There were innumerable cases where the employers deduct the contributions from the wages of the workers but would  not remit to the EPFO. There were such cases  where some employers deduct and remit the contributions but due to non-maintenance of necessary records tens of thousands of workers (particularly contract workers with a short tenure of employment) cannot  claim the amounts from EPFO. Thousands of crores of such unclaimed contributions  remain accumulated with the EPFO. ( Rs. 40865 cr remains unclaimed, as on April 12, 2017, lying idle in dormant accounts, says EPFO, as per a report in Times if India 2019, Feb 12. This happens in cases of job loss, job- switch etc. If not claimed with in 7 years of dormancy, it is said, the amount will be deposited in Senior Citizen Welfare Fund.  As per a report in, May 9, 2020, there is an unclaimed corpus of  Rs.1.3 Lakh cr available, under EPF, Rs.45000 Cr and ESI, Rs.85000 cr… it is not impossible for the government to trace the beneficiaries. Now the employers are seeking to use this corpus).

The central government and the EPFO have implemented some amnesty schemes whereby the employers are left with no punishment if they remit a paltry amount even after non-implementation of the Act for several years. Even the government has recently decided to pay  the employer’s part of contribution for some years. Still there would be lakhs of workers for whom the law is not implemented.

Till 1995, 10% of basic wages                           ( subsequently increased to 12%) of the wages of the workers were deducted and were remitted to the EPFO, together with an equal amount paid by employers. Thereafter a Pension Scheme was introduced, in which 8.33% of the total 24% of contributions is remitted to pension fund and some pension is being paid to the worker after the retirement. This pension is very meagre and it is the grievance of the workers that the government is taking away their hard earned PF amounts and not paying even  a simple interest on it in the form of pension, and they could never get back the principal amount. This was much criticised as a pick-pocketing of workers by the government. Even after much clamour the minimum pension is still kept at Rs.1000 per month. There were reports that the scheme was going to be modified so that the minimum pension would be enhanced to Rs.3000. It is the 7th year the Modi government  is in office but it  is not uttering a word in this regard.

Such is the ground reality in respect of the existing PF Act. There is nothing in the  new Code which could be expected to change this situation. The existing Act  and the new Code are   applicable  only  to the establishments  with 20 and more workers. With this threshold a vast number of workers would not come under the protection of these laws and be deprived of the benefits therein.

         Coming to the existing ESI Act, the case is similar to that of EPF Act in respect of (non) implementation. There are millions  of workers for whom the law is not implemented.  The ESI dispensary is the basic unit where the worker and his dependents are to get the medical treatment. These dispensaries are a home to many insufficiencies like non-availability of medical staff, medicines and medical equipment. The  offices of ESI are known for rampant corruption. Many higher authorities of the ESI corporation are also charged with serious offences of corruption. Recently there was a  scam of hundreds of crores of Rupees of funds embezzled in purchasing medicines and cosmetic material  by state level officers of the Corporation in Andhra Pradesh and an enquiry is instituted into the same, which could be  just a tip of ice berg.

The workers covered under the Act have been facing so many difficulties and hardship in getting medical treatment, leave wages and other compensation. The medical boards constituted for determining compensation are functioning in bureaucratic and corrupt methods depriving many workers of justified compensation. The state governments are not doing anything to set the things right. It is worth mentioning here that the Andhra Pradesh government has not constituted, for the last seven years, the  Medical Appellate Tribunal under the Act which examines appeals against decisions of medical boards below and hundreds of appeals filed by workers are kept pending for a long time.

         This is the state of affairs, which is not exhaustive but only indicative, with the welfare and Social Security said to have been provided by the existing ESI Act. The new Code, similarly as in the case of PF Act contain nothing worth calling  new.  The threshold limits prescribed for the applicability of both the existing and the new Code excludes lakhs of workers from the scope of these laws and deprive them of the benefits therein.

         The provisions relating to payment of gratuity in the new Code are also mostly similar to that of the existing Payment Gratuity Act,1972. However, some provisions are included as a solace. In the definition of “employee” a   workman  employed for  “fixed term employment’  ( an euphemism for tenure contract employee and a high way  for evasion of “retrenchment compensation”) is also included. The minimum service of  five years  to become eligible to receive gratuity is not required in the context of a termination of fixed term employment on expiry of the fixed term.  (However, as per the definition of fixed term employment in the Code on Industrial Relations, one  year service is required for a fixed term employee to receive gratuity). In the definition to  employee workman employed through contractor is  also included. Similarly, the definition of “employer” includes a contractor. These express inclusions  in respect of contract workers are not there in the corresponding existing Act.

However, even as per the existing Act, the contract workers are entitled to receive gratuity from a contractor if they work for more than five years under the same contractor.  The Principal employers and contractors are evading payment of gratuity to contract workers, even though the workers work for more than five years, by way of changing the names of contractors. The term of contract is being fixed for two or three years and every time the contractor changes the name of his firm. The Principal employer is made responsible for payment of Wages , PF and ESI contributions but not for payment of gratuity. Therefore mere inclusion of contractor and his workmen in the definitions of employer and employee respectively could not be expected to    bring any change in the ground reality. It is to be noted that many Principal employers, of PSUs included, are not taking responsibility for ensuring implementation of even the benefits other than gratuity, like PF, ESI  and bonus, and the workers had to fight for the same for years together through their union,  as experienced by FITU.

         In respect of Building and other Construction workers, the unorganised workers the new Code repeats the provisions of the corresponding existing laws which only create certain responsibilities on the government to prepare schemes for providing health care, pension etc., to these workers but is  not conferring any rights on the workers. Nothing is there in the Code to guarantee better and justified terms of employment,  conditions of work and wages and other allied benefits. The schemes declared under the existing laws could not bring any change or improvement in the miserable life of the workers in these sectors. The schemes that would be formulated under the new Code could not be hoped to be better either. Now, in the new Code gig workers, platform workers and interstate migrant workers are also included to get the benefits under the schemes to be prepared. Unless there is an  economy which could provide these workers sufficient incomes and better working conditions any social security schemes under the Code could at best remain an eye wash. Both the existing laws and the new Code exclude a vast section of unorganised and migrant workers from the scope of even these eye wash schemes.


         The real solution to the plight of these unorganised and migrant workers has to be sought in identifying and addressing  the root causes, such as agrarian crisis and lack of and uneven development of industrialisation. As majority of rural people have no land in their hands, as the landlord system is continuing in varied forms and  as the peasantry is being exploited by the capitalist market and other institutions there is  an  agrarian crisis    pauperising  and  impoverishing crores of rural poor and  forcing them to migrate. The lack of development of industry in their own district and state is forcing them to migrate to other districts and states. If  land is distributed and landlord system is abolished most of these poor would find  employment in their own villages. Unless the incomes of the rural people, 70% of our population, are increased no development of industry could be expected.    Curbing the rights of workers would not lead to Industrial development, nor the plight of the workers could be removed with social security legislations,  eye wash or  substantial.

        Many     provisions in this new Code  related to “Maternity Benefitand that are related to “equal remuneration” to women workers, as in the code on wages  are  repetition of that of  the existing laws. The proportion of women workers in industrial employment is vary small in our country. The majority of those who work in industries are engaged as casual and contract workers. Women are not paid even  equal wages on par with male workers despite the constitutional and statutory provisions in this regard. Most of the benefits like ESI, PF and Bonus etc. are also denied to them. Then the fate of provisions under Maternity Benefit Act could be imagined.  The threshold limits  in  the existing law  s well as in the new Code exclude considerable section of women workers   from the scope of the law and deprive them of the benefits. Again it is a question of requirement of strong unions and active  participation of women in the working-class movement which is not as required due to several reasons including  patriarchy, prevalent not only in the employers but also in the unions and leaderships. It is a common experience that, where women  actively participated in the movements there were  notable successes. Trade union movement in India is lagging behind in this respect and has much  to do. The workers and the leaders have to realise this and reorient their movements to achieve the equal participation of women not only in industrial employment but also in trade union movement, which alone  guarantees the enforcement and protection of rights not only of women workers but also of the working-class as such.

The  relevant new code permits employers to  employ women workers in the night shifts also, i.e, between 6 pm and 7 am. This may seem to be providing equal opportunity for the women workers, but in reality helps only the employers to further  exploit the former in the given social, economic, and political environment in our country, particularly in respect of women. The Working class should fight to bring about a change in this environment, and more particularly to  completely eradicate  patriarchy.



The following  existing Acts have been merged into this Code on Occupational Safety, Health and Working Conditions.

  1. The Factories Act,1948.
  2. The Plantation Labour Act, 1951.
  3. The Mines Act, 1952.
  4. The Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955.
  5. The Working Journalists (Fixation of Rates of Wages) Act, 1958.
  6. The Motor Transport Workers Act, 1961.
  7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966.
  8. The Contract Labour (Regulation and Abolition) Act, 1970.
  9. The Sale Promotion Employees (Conditions of Service)Act, 1976.
  10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)Act, 1979.
  11. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981.
  12. The Dock Workers (Safety, Health and Welfare) Act, 1986.
  13. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service)Act, 1996.

This article does not  present a complete comparative analysis of all the provisions of all these existing Acts with those of the new Code, but only deals with certain notable changes. The Employers have been provided some reliefs from the requirements of Registrations, Licenses and permissions etc. from the government.  As per the existing Factories Act,  if an application for permission of establishing a factory is not disposed of in three months, the permission will be deemed to have been granted. This is now generalised for all registrations, permissions and licences ( including in respect of contract labour) required to be obtained under the new Code. As per the new Code, a single electronic application is sufficient for several registrations and licenses and if such application is not disposed of in 45 days, the license etc. applied for will be deemed to have been issued.( notable is that no such deeming has been provided for in respect of registration of a trade union). The applicability threshold has been raised from 10 workers to 20 workers in respect of establishments run with the aid of power and from 20 to 40 in respect of those run without power. In respect of provisions relating to contract workers they are applicable only to those establishments with 50 and above contract workers. This is   20 in the existing Act. This excludes considerable number of workers from the applicability of the Code.

The  existing Factories Act and mines Act etc., prescribe certain specific standards of occupational safety, health and working conditions which may not be exhaustive. Now, in the new Code no such specific standards are prescribed in the Code, but the central government is empowered to prescribe such standards. The Code does not define the measures and standards to be maintained by employers in factories and mines etc., but the government kept the power with it to define the same. This means that the core provisions to be enshrined in the “Act” now are  transferred to the “Rules” and  “schemes” to be formulated by the government. Most of the key powers in this regard are vested with the Central government.

As per the new Code, “safety committee” shall be constituted  in non- hazardous factories and mines etc., only  where 500 and  more workers work. This was 250 in the existing Act. However  establishments categorised as hazardous with 250 and more workers shall constitute a safety committee, as per the new Code. In many existing factories these committees are constituted for name sake and they could not be so effective in ensuring safety. Things come to notice, and forgotten soon, only when some serious and fatal accidents take place. Even simple things like gloves, goggles and shoes are not provided  in  many  industries; the workers and unions also do not insist on them.

In the existing Factories Act a right is conferred on the workers to intimate to the employer and authorities concerned regarding any hazardous conditions. While retaining this right, the new Code cast a duty also on the workers (applicable not only to workers in factories but to all such as workers in mines etc.) the failure of which is punishable with imprisonment up to two years.

        Hours of work is one of the  important matters governed by these laws. AS per the existing Factories Act and Mines Act, the limit of   daily hours of work is 9 hours and the limit of   weekly hours of work is 48 hours. Now in the new Code for all workers only daily limit of 8 hours of work was prescribed. Draft rules in respect of this Code are just released  wherein the weekly hours of work are fixed as 48 hours and  the maximum “spread over”  of period of work in a day, including all rests and intervals, is increased to 12 hours from 10 and half hours in the existing Factories Act.  This “spread over” is being misused by several employers,  particularly in transport sector, increasing the actual hours of work up to 12 hours in a day in stead of 8 hours.

In the existing Factories and other related Acts Double wages are prescribed for extra work beyond 9 hours in a day and 48 hours in a week. However, in the new Code, the number of hours beyond which the double rate of wages to be paid has not been specified and the power to prescribe the same is given to the government. This is taking away the direct “statutory right” of the workers and converting the same into a “power” of government.

A proviso is included in the new Code that a worker shall be required to work overtime by the employer subject to the consent of such worker for such work. There are and will be number of circumstances like low wages and lack of job security  which prevent the workman to exercise this provision of “consent”  and which force him to “consent” for overtime work.

In many Factories and Establishments overtime wages(double wages) are not being paid for the extra hours of more than 9 hours in a day if the weekly hours of work do not exceed 48 hours. As per the new Code the overtime wages shall be calculated on daily or weekly basis, which ever is favourable to the workmen.  However many employers, particularly in transport sector, including those owned by government like AP and TS RTC, have not been implementing the 8 hours law. Tens of Lakhs of workers are not paid overtime wages as per law by the employers who have been deliberately flouting the law with impunity. Without unions and  struggles   this couldn’t be enjoyed  by workers any where.

  By now, 12 hours working day, without payment of O.T wages, has become a norm in several establishments, more so in    transport sector, commercial units  like shops and malls, including in IT/BPO sector. The concept of 8 hours work day  has been subverted.

In the present labour scenario the number of contract workers, even in perennial nature of jobs,  in  most  establishments  exceeds that of permanent workers. This is the key area and method of exploitation of labour. The existing Contract Labour Act empowers the government to prohibit engagement of contract labour in any “process or operation or work” after considering the factors such as “ whether the operation or work is incidental to, or necessary for the trade, business, manufacture or occupation carried on in the establishment” and whether the work etc., are of “perennial nature”. In the wake of struggles by workers,  state governments like AP have diluted these provisions introducing the concept of “core” area/jobs. They brought amendments defining what are not “core” jobs, legitimising engagement of contract labour in many perennial nature of jobs. The Central government” has followed this anti-worker sophistication  and incorporated the concept of  “core” jobs in the new Code and listing  what are not core jobs. The following are some of the jobs which are not core areas where engagement of contract labour shall not be prohibited by the government:

  1. Sanitation, sweeping and cleaning
  2. Watch and ward and security services
  3. Canteen and catering
  4. Loading and unloading
  5. Running hospitals
  6. Transport including ambulance
  7. Housekeeping

        It should be noted that all these operations or works are of  perennial nature and are  part of the business of any establishment. Thus the government legitimized the engagement of contract labour in many perennial nature of works through the new Code. This is certainly in favour of the employers at the cost of the workers.

  Curiously a  demand or an industrial dispute for regularisation of contract workers working in such perennial and core jobs, by way of abolition of contract system in those  jobs, can not be raised by the contract workers and their unions as held by several High Courts and Supreme Court. It has to be raised by the regular workers and their unions only. Most  of the unions of regular workers are not taking up this demand.

    It is to be further noted that the provisions relating to contract workers in the new code are applicable to those establishments where 50 and more workers are engaged as contract workers. This excludes a considerable section of contract workers from the scope these statutory provisions and makes it easier for several employers to engage contract workers even without required registration and licence and denying the statutory benefits to workers.



On a closer scrutiny, we can understand that the enforcement has been further weekend, as  per the new labour codes when compared  with the existing laws. The change in the term “inspectors” as “ inspector- cum -facilitators” indicates the nature of this dilution of enforcement. The nexus of Industrial managements, corrupt officials and politicians had already weakened the enforcement in practice. Various  governments passed G.O.s restricting inspections and penal actions creating a free environment for the employers to violate law and exploit workers. Now, as per the new Codes, the inspector cum facilitator has to act in accordance with the inspection schemes that may be prescribed  by the government.  Certain powers are given to the inspector cum facilitators to enter into establishments and search documents etc. However as per the language of the Code the inspectors has to follow the scheme prescribed by the government and act mostly as advisors to the employers, who are often  alerted before inspections, but not as officers enforcing the provisions of the Codes.

However in respect of hazardous establishments, the inspector cum facilitator is empowered to order stopping the activity for three days when a danger is apprehended and the same can be extended further with the approval of Chief- Inspector cum Facilitator.

The general violations of the provisions of the existing Factories Act by the employers attract a punishment of imprisonment up to two years and a fine. In the new Code, the provision for punishment of imprisonment in this regard has been deleted and only punishment of fine is prescribed.  The punishment fixed for  violation of provisions relating to hazardous conditions as per the existing Act is imprisonment up to seven years and for continuation of same offence is imprisonment up to ten years. This is reduced to two years and three years respectively, and a fine up to fifty lakhs rupees for the offence of continuation of same offence. Thus the quantum of punishments are well reduced. There has been no basic change after Bhopal disaster. Litigation was allowed to go on for three decades.

Further, compounding of offences is also provided for in the new Code. Experience for all these years show that violation of the existing Acts, compromising the safety and health of the employees, has been a regular phenomenon and enforcement of prescribed standards and punishment for violation have  been rare or occasional. With no change in the economic and political system and given the weakened trade union movement the enforcement and punishment would become further rarefied. The new Code provides for maintaining a “Social Security Fund” to which the fines collected from erring employers shall be remitted and which would be utilized for the welfare of the workers. The more the violations of the Code and convictions of the same, the more funds for the said fund!


         Thus the new Codes repeat the provisions of existing Acts to  a considerable extent, shift several provisions from the Acts to the Rules and schemes to be prescribed by the government, legitimize the existing anti-worker violations into law, dilute enforcement and make certain promises for the unorganised sector workers etc., with a few changes that may be useful to workers. On the whole, they would be disadvantageous to the workers, help employers continue their exploitation of workers with further “ease” and violation of laws with further impunity.

The working class of the so called organised sector remains divided into various unions at all India level and at factory level as well. Corrupt, bureaucratic and castiest  elements and lackeys of ruling class parties hijacked the  trade union movement dividing  the workers and making workers subservient to the managements and indifferent to  working-class politics.  The trade unions of workers in organised sector became segregated and they are not uniting with the contract workers and unorganised workers. Since 1991 the central trade unions including INTUC  and BMS have been opposing these Labour law reforms  and observing “All India Strikes”; which have become more routine, token and symbolic than purposive and suatained. Nevertheless the governments were able to gradually dilute the Labour laws and rights of workers and could finally complete their agenda. In protest of these new Codes except BMS all Central trade unions have given a call  for another such country wide strike agitation on 26th  November 2020. The BMS also  strongly opposed  these labour law amendments terming them as “predatory”  and “imported” and decided agitations demanding to stop the “ordinance raj”  and  “brutal way” of amending labour  laws. It reportedly threatened to take up  a continuous agitation including national level strikes. Thus the entire working-class in India, irrespective of political ideologies and affiliations, is strongly opposing these labour law amendments by the autocratic and fascist  Modi/BJP government at the centre.  Given the divisions, “march separately and strike together”  may be an appropriate tactic.

The need of the hour is to unite the working-class from grass root level to all India level basing on  correct working-class politics and to get rid of the corrupt and bureaucratic leaderships.  Striving to  forge a fighting and political unity between working-class and other toiling classes, particularly the peasantry and the rural poor, is much needed to bring out the working-class movement from the present state and to defeat the anti-worker and anti-people policies of the rulings classes and their parties and governments.  Otherwise, the country wide strike agitations etc., would remain token shows and  could not be expected to bear fruits as experience shows.

The present   union Govt. led by Modi basically emulates the previous regimes and continues to serve the interests of Super Powers like USA and imperialist foreign capital, pursuing expansionist and war-mongering policies, mainly against Pakistan and China and   suppressing the people of Kashmir etc., committing only to protect the interests of a handful of Indian Big houses at the cost of overwhelming majority of the people of the country.

Its reactionary policies are more brazen, aided by a largely compliant and pliable media, and further beefed up by a police-military state: It is further curbing the rights of the states, spreading communal hatred, invoking national chauvinism and jingoism.  It pursues a policy of undeclared emergency,  routinely indulges in encounter killings, regularly invokes the draconian amended UAPA and the colonial sedition laws, brands anyone anti-national and indulges in stifling any dissent and democratic voices.

This sham nationalism and chauvinism need to be exposed and opposed by the working-class; the present bureaucratic TU leaderships are themselves a hurdle in this task and need to be exposed and opposed, which calls for strengthening the correct working-class ideology,  politics and organisation.

The BJP and Modi regime  claimed to be an alternative, but in practice it is following worst features of Congress regimes in misusing its central power,  including CBI, ED, IT raids etc., against its political adversaries, subverting electoral processes and continuing vote-bank and casteist  politics and further it is bent on establishing a “Hindu Rashtra”.  Its practices  and claims are at divergence. Those  seeing it as an alternative must  see this reality. The   present  Labour Law Reforms are part of its anti-people policies which are only meant to serve and further facilitate exploiting classes; they won’t serve any purpose so far as interests of the country  or toiling people are concerned. The government must be forced to give up all such anti-people policies and measures.

Some of the parties that are not in power in the centre are ruling in some states,   Congress being a major such ruling class party.  Thus various state governments, led by ruling class parties,  are adopting the same or similar  anti-worker and anti-people policies. The working-class, all toiling masses  and people in general should oppose and resist all such policies and measures, and unitedly fight to defend their rights  interests.


( A discussion on the new “Code on Industrial Relations” can be seen in the part.1, published in  on 20th Nov, 2020)

Writer is a trade union leader working in the field for the last 30 years and General Secretary of Federation of independent Trade Unions-FITU. AP, and a functionary of UCCRI-ML founded by veteran communist revolutionaries D.V.Rao and T.Nagireddy.

He can be reached at

[email protected]



Support Countercurrents

Countercurrents is answerable only to our readers. Support honest journalism because we have no PLANET B.
Become a Patron at Patreon

Join Our Newsletter


Join our WhatsApp and Telegram Channels

Get CounterCurrents updates on our WhatsApp and Telegram Channels

Related Posts

Labor Codes 2020 from a Labor rights perspective

The working conditions of labor during industrial revolution was characterized by long working hours (12-16 hour shifts), low wages, unsafe working conditions and lack of worker rights. The labor movements…

Join Our Newsletter

Annual Subscription

Join Countercurrents Annual Fund Raising Campaign and help us

Latest News