New Labour Codes and Informal Workers

The new Labour Codes of 2019 and 2020 have raised concerns because they may undermine the rights and welfare of workers, especially those in the unorganised sector.

Concerns over the new Labour Codes

• About New Labour Codes: The new Labour Codes of 2019 and 2020 consolidate multiple labour laws concerning industrial relations, wages, social security, and occupational health and safety.
• Lack of tripartite Consultation: These codes were passed without consultation among workers, employers, and government representatives at the Indian Labour Conference (ILC).
• Threat to Labour Rights: As implementation of the codes begins, there are concerns that the hard-won labour rights of workers across sectors are either threatened or destroyed.
• Exclusion of the Informal Sector: Although 90% of India’s workforce is in the informal sector (contributing 65% to GDP), they are largely ignored in three of the four new codes.
• Regulatory Dilution: The Occupational Safety, Health and Working Conditions (OSHWC) Code repeals the Building and Other Construction Workers (BOCW) Act, 1996, eliminating over 180 sector-specific safety provisions and creating a regulatory vacuum for millions employed in the high-risk construction sector.
• Web-Based Inspection Regime: The shift from physical inspections to a web-based inspection system undermines effective enforcement of workplace safety and minimum wages.
  • It is violating International Labour Organization (ILO) Convention 81 (Labour Inspection), which India has ratified and which mandates on-site verification.
• Occupational Health Crisis: Unorganised workers face severe health risks—silicosis in construction, high cancer incidence among agricultural workers due to pesticide exposure, and chronic eye, skin, and kidney disorders among salt-pan workers.
• Violation of Global Norms: The OSHWC Code shows limited recognition of occupational disease realities, contravening ILO Convention 161, which requires a national occupational health policy and mandates identification, treatment, and rehabilitation of affected workers.
• Exclusion from Social Security: With Employees’ State Insurance (ESI) largely inaccessible to informal workers, millions face no institutional recognition or effective state-backed mechanisms to address occupational health and safety.

Welfare Fund Crisis

• Social Security Code gaps: In the Social Security (SS) Code, Organised workers seem to receive some social security benefits, while informal workers are offered vaguely defined welfare schemes.
• Abolition of Cess: Various cesses collected to provide for worker welfare in beedi, salt, mining, and other sectors have been abolished under GST reforms with no replacement.
• Single Welfare Board: The SS Code establishes a single welfare board for all unorganised workers, ignoring the diversity of sectors beyond construction and gig work.
• Centralisation Risk: In construction, the centralised e-Shram registration system allows the central government to potentially take over accrued welfare funds estimated at ₹1 lakh crore.
• Erosion of State Welfare Architecture: In Tamil Nadu, the Social Security (SS) Code threatens the dissolution of all 39 sector-specific State welfare boards, undermining long-standing decentralised labour welfare mechanisms.
• Absence of Saving Clauses: The Code contains no saving provisions to protect State-level welfare boards or the benefits they deliver, including old-age pensions, maternity assistance, and educational support for workers’ children, raising concerns over cooperative federalism.

Way Forward

• Protect State Rights: States like Tamil Nadu and Kerala must refuse to notify rules until “Saving Clauses” are added to protect their welfare boards.
• Restore Safety Rules: The 180 safety rules from the BOCW Act must be reinstated in the central regulations.
• Physical Inspections: Web-based systems must be backed by mandatory physical inspections to comply with ILO Convention 81.
• Tripartite Dialogue: The government must return to the table with unions and employers to address these critical gaps.

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Conclusion

As emphasised by the ILO and B.R. Ambedkar, “Labour is not a commodity.” True economic growth cannot be achieved by compromising the dignity and safety of 90% of the workforce.

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