top of page

Three Codes of Laws: Industrial and Working sector

India is known as the second highly populated Nation. The occupational structure of the country is divided into three sectors that are agriculture sector, industrial sector, and tertiary sector. Most of the population of India is working in the agrarian sector. Industrial sector can be defined as a combination of both employers and employees working in the industry. There are two categories of workers that are settled and migrant workers. The migration has been done to find work mainly in the metropolitan cities. Since the sector is growing rapidly and so the interest of workers and the owner integrated, therefore, there is a need to have a particular and definite rule of law regarding their issues and the profits.

The workers include two categories that are organized sector and unorganized sector. In an organized sector the employees have more power than the employer and in an unorganized sector the situation is totally different as here the employer ruled over the employees and he can do whatever he wants to do. But in a society,both the sectors have to be maintained equally. Therefore from all the 29 labour laws at the national level, the government has framed four codes including the best part from all these laws. The first code that was the wages code has been already introduced in 2019 and now in 2020 three other codes have been introduced. During this lockdown,the category which has been eventually affected by this is the migrant workers because they have no source of income after lockdown and failed to have basic needs. During this period various changes have been implemented in the system of law regarding industrial and the workers. With regard to the same changes, there is an implementation of three labour codes. It includes:-

· Industrial Relations code bill 2020

· Code on social security bill 2020

· Occupational safety health and working conditions code bill 2020

The Occupational Safety, Health, and Working Conditions Code, 2020

This code has defined the term “migrant workers” as any worker who came from his own state to another state in search of employment and whose earning is below rupees 18000 per month should be categorized as a migrant worker.

The law focuses on the safety and health of the workers who are working in those particular industries or factories and also regulates the working conditions for them so that their physical and mental health can be maintained and the productivity can be increased.

Another thing which the government is imposing in this code is that migrant workers has to make different license for working in different factories or under different forms but now a single license for stating firms to have workers on contract across different location has been allowed by the government which makes it easier for them to hire the workers for the work.

The government has also increased the threshold limit of the contractor employees from 20 to 50 under the OSH code.

The Code on Social Security, 2020

This code is basically focused on providing universal social security to all the workers working in the organized sector,unorganized sector, the gig and platform workers. The unorganized, gig, and platform workers occupied 90% of India’s total workforce and by including them all under this social security code made the labour laws more effective and useful for the workers.

Under this code,The National Security Board has to be framed which has the main work to recommend the central government for formulating suitable schemes for the benefits of all these workers. This board will regulate all the schemes and programs that are going to be framed while dealing with this untouched workforce of the nation.

Another most important announcement included in this code is that the aggregators employing gig workers have to contribute 1-2 percent of the annual turnover for their social security without any loophole.

The Industrial Relations Code, 2020

There are various provisions that have been laid under this code and these are somehow in favor of the employee and on the other hand in the favor of the employer. The code deals with the trade unions condition of employment in the industrial sector while controlling their industrial disputes with their workers.

The Government of India has increased the threshold on the number of employees that are needed in an organization. That simply means that for retrenchment and closure of any factory if the factory has 300 workers instead of 100 as earlier then the owner has a right to fire the workers who are employing there if there is a need to shut down the factory and it can be done without the prior permission of the board that has been established for the checking their work.

The second point is related to the right of legal strike. Now the workers are not allowed to do any strike without giving 60 days prior notice to the officials. And also they are not allowed to do any sort of strike while the case is in arbitration proceedings under the tribunal. In simple words, the right of the legal strike has been snatched from the workers.

Consequences of the codes

  • Positive Effects

With regards to the provision related to 300 workers instead of hundred workers. Now there is a freedom to the factory that they can hire more people to their firms and due to these workers are more employed because when this number was 100 the factories are not giving high productivity and there is less employment due to the possibilities of being shut down. But due to this, they can have more people in the industry.

Even according to the survey it is defined that the states which has cool labour laws have more productivity then the hard and fast rule states. The best example of this can be seen in Rajasthan as after increasing the numbers the workers in factories,they are providing more employment to workers and hence the productivity is also increasing day by day.

All the changes in the other two codes are welcomed by the people so there is no issue with the other ones because they are in favor of the workers and owners and not causing any harm to either of the parties.

  • Negative Effects

This gave more power in the hands of the employer as they can fire anyone at any time when deems fit. Hence it will cause unemployment and problems for the workers.

When the situation was concerned with legal strikes, earlier a six-week notice was required to be given in the necessity services factories because the strike will affect the large number of people. Therefore it is necessary as looked legally and practically good. But now this provision has been laid down over all the factories so it will not have the same situation with other ones. Therefore it is snatching their rights of legal strike and it will not be tolerated when this monopoly or hardship of the employees is done.


The laws including in all these three codes are framed for the management of factories and workers to have a well-settled and furnished relationship between the employer and their employees. And the second reason behind implementation of this classification is that all the separated labour laws are now integrated and formulated at one single place which will be more convenient for the users to use for the sake of justice. It may be possible that the conditions and amendment described in these codes may differentiate from the needs of the society but we have to extract the best from it and the needful changes should be done in the same to make laws more effective and helpful for the society for its welfare and development.


~Archana Pandey


Jamnalal Bajaj School of Legal Studies Banasthali Vidyapith Rajasthan

47 views0 comments


bottom of page