DEST Practice 15

Labour law reforms have been a significant focus of government policy over the past decade, driven by the recognition that India's complex, fragmented, and often archaic labour regulatory framework, accumulated over decades of legislative accretion, imposed unnecessary compliance burdens on businesses, created perverse incentives for employers to remain small and informal, and failed to extend adequate social security protection to the vast majority of India's workforce engaged in informal and unorganised sector employment. The codification of labour laws, through which over forty central labour statutes were consolidated into four Labour Codes covering wages, industrial relations, social security, and occupational safety health and working conditions, is the most comprehensive reform of labour legislation in independent India's history. The Code on Wages, the first of the four codes to be enacted and notified for implementation, extends the coverage of minimum wage and wage payment protections to all workers including those employed in the unorganised sector and domestic workers who were not covered by the previous legislation, providing a universal legal floor below which wages cannot be set. The Industrial Relations Code consolidates three central statutes including the Trade Unions Act, the Industrial Employment Standing Orders Act, and the Industrial Disputes Act, extending some dispute resolution mechanisms to smaller establishments that were previously excluded by threshold provisions, and introducing provisions to facilitate retraining and redeployment of workers as an alternative to redundancy. The Code on Social Security consolidates nine statutes including the Employees Provident Funds and Miscellaneous Provisions Act and the Employees State Insurance Act and extends the scope of social security protections to platform workers, gig economy workers, and unorganised sector workers who have historically been entirely excluded from formal social security. The Employees Provident Fund Organisation manages the largest social security corpus in India, covering over six crore active subscribers who contribute a portion of their monthly wages to retirement savings, with matching employer contributions and a guaranteed minimum return set by the government each year. The Employees State Insurance Corporation provides medical care, cash benefits during sickness, maternity benefit, disability benefit, and dependants benefit to workers in specified categories of establishments and their families, serving several crore beneficiaries. The e-Shram portal, which registered over twenty-eight crore unorganised workers, created for the first time a national database of informal workers that can serve as the foundation for extending social security and welfare programme coverage to this vast and previously invisible workforce. The construction workers welfare boards maintained by state governments provide health, housing, education, and accident compensation benefits to registered construction workers using the cess collected under the Building and Other Construction Workers Act.