New Labour Reforms: What Changes for Employers & Employees

The labour reform bills directly affect employees in organised & unorganised sector, as they affect the companies.

In a bid to improve working conditions of labourers/employees and employers across the country, Parliament passed three crucial bills on Tuesday, 22 September.

The three bills – Industrial Relations Code Bill, Code on Social Security Bill and Occupational Safety, Health & Working Conditions Code Bill – are now set to become laws after the President’s nod.

These Bills directly affect the employees working in the organised and unorganised sector, as they will affect the companies that employ them. The new bills give certain facilities, concessions and benefits to both employees and employers.

Here are some major highlights of the labour reforms that the three Bills list:

Industrial Relations Bill

• With the Industrial Relations Code Bill, the government has sought to amend the definition of 'strike' to bring 'mass casual leave' under its ambit, wherein, if over 50 percent of a company's workers take concerted casual leave, it will be treated as a strike.
• However, according to the bill, the workers planning to go on ‘strike’ must give at least 60 days notice and the strike cannot continue while proceedings are underway before a Tribunal or a National Industrial Tribunal.
• Companies in which the number of employees is less than 300 will be able to lay off without getting approval from the government. Earlier, only a company with 100 employees was allowed to do so.
• Overall, companies are allowed to hire or fire their employees. According to the new rules, the expulsion, punishment, promotion of employees working in the company will be more in favor of the employer.

Social Security Bill

• The Social Security Bill recommends the creation of a National Security Board for employees and workers. This board will suggest to the central government to make laws for the different sections of workers in the unorganised sector.
• The new law will also bring employees of the unorganised sector under the ambit of social security related schemes. These include schemes such as life and disability insurance, provident fund, skill development, etc.

Occupational Safety, Health and Working Condition Bill

• Through this bill, companies will be allowed to give jobs to people on contractual basis, so the employers will not have to hire permanent employees.
• Companies will be able to increase or decrease the contract for any length of time.
• Women employees will be permitted to work at night, subject to certain conditions that relate to safety, holidays, working hours, and their consent.
• If the company gets the work done after 7 pm then it will be the responsibility of the company to protect the women employees.
• Companies will have to pay more for overtime and recruitment of any employee cannot be done without an appointment letter.
• The code specifies a migrant worker as someone who has come from his/her resident state to seek employment in another state, and earns up to Rs 18,000 per month.
• The code also seeks to withdraw the previous provision for temporary accomodation for workers at or near their worksites. But it proposes a journey allowance to be paid by the employer that enables a worker to travel between his native place and the site of employment.

(With inputs from Quint Hindi.)