Article (November-2020)


Highlights of new Labour Codes and impact on employers and workforce

Anil Kaushik

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With passing of the new remaining three labour codes by parliament, the objective of the Govt. appears to have been completed.  All the four codes have now become the Acts as President has accorded his assent on 28th Sep. 2020. The Code on wages Act 2019 has already become an Act. By this exercise 39 central Acts have been merged in these four codes.  Now Govt. has to frame the Rules under respective codes.

By this Four Codes Govt. has subsumed the following existing Acts:

The Code on Wages Act 2019: The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.

The Industrial Relations Code 2020: The Industrial Disputes Act 1947, Trade Unions Act 1926 and Industrial Employment (S.O.) Act, 1946.

The Social Security Code  2020 : The Employees Compensation Act, 1923,The Employees State Insurance Act, 1948, The Employees Provident Fund and Misc. Provisions Act, 1952,The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, The Maternity Benefit Act, 1961, The payment of Gratuity Act, 1972, The Cine workers Welfare Fund Act, 1981,The Building and other Construction workers welfare Cess Act, 1996 and The Unorganised workers Social security Act, 2008.

The Occupational safety, Health and working conditions Code 2020: 1- The factories Act, 1948, The Plantations Labour Act 1951,The Mines Act, 1952, The Working Journalists and other newspapers Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, The working journalists (Fixation Of wages) Act, 1958, The Motor Transport Workers Act, 1961,The Beedi and Cigar workers (Conditions Of Employment) Act ,1966,The Contract Labour (Regulation & Abolition) Act, 1970, The Sales Promotion Employees (Conditions Of Service) Act, 1976, The Interstate Migrant Workmen (Regulation Of Employment & Conditions Of Service) Act, 1979, The Cine Workers and Cinema Theatre Workers (Regulation Of employment) Act, 1981,The Dock Workers (Safety, Health And Welfare) Act, 1986, The Building and other Construction Workers (Regulation of Employment and conditions of Service) Act, 1996.

Thus in Total 29 Central act are set to be repealed and will be a matter of past. This is the time for professionals to unlearn and then re-learn. The IR Code 2020 has 104 sections in 14 chapters in total with three schedules. The Social security Code 2020 has 164 sections in 14 chapters with seven schedules and The OSH&WC Code  2020 has 143 Sections in 14 chapters with three schedules.


1- The definition of wages provided in all the three codes is same. Wages  means basic pay, dearness allowance and retaining allowance but does not include  allowances as mentioned in clauses from (a) to (k)  subject to the condition that if allowances are more than 50% of wages, excess of such 50% will be deemed as wages. The net result of this will be that worker/employee will be entitled to all benefits at least on 50 % of remuneration so paid to him.

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