The Lok Sabha on Sep 26, 2020, cleared new versions of three labor codes Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020, and Occupational Safety, Health and Working Conditions Code Bill, 2020. 

While the government proposes to increase the ambit of social security by including gig workers and inter-state migrant workers, it has also proposed measures that will provide greater flexibility to employers to hire and fire workers without government permission. 

1) Occupational Safety, Health and Working Conditions Code Bill, 2020. 

It has defined inter-state migrant workers as someone who has willingly come to work to one state from another and is earning up to Rs 18000 a month. The proposed definition makes a distinction from the present definition of only contractual employment. (basically, noncontractual workers will also be counted as migrant workers, and will be eligible for benefits). 

The government has, under the code, allowed a single license for staffing firms to hire workers on a contract basis across different locations. Earlier, multiple licenses were needed to hire workers from different states. 

So, all in all, this law is a good one. It simplifies shit(paperwork) for contractors and expands the definition of a migrant worker. 

2) The Code on Social Security Bill, 2020

It intends to provide for universal social security to all workers, including the unorganized and the gig and platform workers. Together, these account for over 90 percent of the Indian workforce estimated at 50 crore. 

Earlier, workers only in the organized sector were eligible for social security benefits, this is now being expanded to gig workers too. (unorganized, contract basis workers). 

It proposes a National Social Security Board which shall recommend to the Central Government for formulating suitable schemes for different sections of unorganized workers, gig workers, and platform workers. 

Also, aggregators employing gig workers will now have to contribute 1-2 percent of their annual turnover for social security. 

Eg of gig workers: Swiggy, Amazon delivery people 

This is a brilliant move and has been welcomed by all sides. 

3) Industrial Relations Code Bill, 2020(the most controversial one, or the only one which has sparked a debate) 

It seeks to consolidate and amend laws relating to trade unions, conditions of employment, investigation, and settlement of industrial disputes. 

In the Industrial Relations Code Bill, 2020, the government has proposed to introduce more conditions restricting the rights of workers to strike, alongside an increase in the threshold relating to layoffs and retrenchment in industrial establishments having 300 workers from 100 workers or more at present — steps that are likely to provide more flexibility to employers for hiring and firing workers without government permission. 

Earlier, factories or industries with less than 100 workers could hire and fire workers, at their own discretion, without adhering to government laws and regulations(related to retrenchment and closure). 

Now, this limit has been increased to 300 workers, which means more factories will be included in this ambit, which means more factories will be able to hire and fire workers, as and when they wish. 

This significantly improves the ease of firing for employers, if they need to cut their costs or close their factories.(earlier firing and closure required govt permission, and a lot of paperwork and hassles, if the no of employees were greater than 100)(now increased to 300). 

The Standing Committee on Labour, in its report submitted in April, had also suggested hiking the threshold to 300 workers, noting that some state governments like Rajasthan had already increased the threshold and which, according to the Labour Ministry, has resulted in “an increase in employment and decrease in retrenchment” 

What is the Govt’s rationale for increasing the limit? 

The government maintains that fewer people are employed when the threshold limit is 100 workers. 

According to the labor minister, it discourages employers to recruit more workers than 100, they deliberately keep their workers’ strength below 100. (because otherwise retrenchment, firing, and closure is a very tedious task, requiring a lot of government permissions and paperwork)(so factory owners were not setting up big factories, because in case of potential losses, they would not be able to fire workers as per their needs)(low scale, low productivity)(very very very capitalist argument :p)

The minister also added that investors will be encouraged to set up big factories and employ more workers, after the increase in the threshold limit for “hire and fire” from 100 to 300. 


Analysts say the increase in the threshold for standing orders will water down the labor rights for workers in small establishments having less than 300 workers. “The increase in the threshold for standing orders from the existing 100 to 300 is uncalled for and shows the government is very keen to give tremendous amounts of flexibility to the employers in terms of hiring and firing…dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers. This is complete demolition of employment security,” XLRI professor and labor economist KR Shyam Sundar said. 

The Industrial Relations Code also introduces new conditions for carrying out a legal strike 

For instance, the IR Code proposes that no person employed in any industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal or a National Industrial Tribunal and sixty days after the conclusion of such proceedings. Thus, elongating the legally permissible time frame before the workers can go on a legal strike, making a legal strike well-nigh impossible. 

At present, a person employed in a public utility service cannot go on strike unless he gives notice for a strike within six weeks before going on strike or within fourteen days of giving such notice, which the IR Code now proposes to apply for all the industrial establishments.

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