Introduction to Changes in New Labour Codes from Old Labour Acts in India

The Indian government consolidated 29 central labour laws into four new labour codes between 2019 and 2020 to simplify compliance, promote ease of doing business, and extend protections to unorganized and gig workers. These codes are: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020. The old laws were fragmented, leading to overlaps, inconsistencies, and compliance burdens, with over 1,200 provisions across multiple acts. The new codes reduce this to about 480 provisions, introduce uniform definitions (e.g., for “wages”), enhance worker rights like fixed-term employment benefits, and incorporate modern elements like gig worker protections and electronic compliance. However, critics argue they tilt towards employers by raising thresholds for permissions (e.g., for layoffs) and potentially weakening union powers. Below, I detail key definitions and changes for each code in tabular form, drawing from comparative analyses. Explanations are provided in depth for clarity, including impacts on employers, employees, and the economy.

1. Code on Wages, 2019

This code consolidates four old acts: the Payment of Wages Act, 1936; Minimum Wages Act, 1948; Payment of Bonus Act, 1965; and Equal Remuneration Act, 1976. Key aims include uniform wage definitions, floor wages, and gender neutrality. It expands coverage to all employees (no wage ceilings) and simplifies payments via electronic modes. Changes promote timely payments and reduce disputes but require employers to recalibrate payroll systems to cap exclusions at 50% of remuneration.

Key Definitions (Old vs. New)

The new code standardizes definitions to eliminate inconsistencies across old acts, ensuring uniformity in wage calculations for bonuses, deductions, and claims.

Term	Old Definition (From Relevant Acts)	New Definition (Code on Wages, 2019)	Key Changes/Impact
Wages	Varied: Under Payment of Wages Act, included salary, allowances, overtime; under Minimum Wages Act, focused on scheduled employments; exclusions like bonuses/PF differed. No uniform cap on exclusions.	All remuneration (expressed in money) including basic pay, dearness allowance, retaining allowance. Excludes bonus, house accommodation value, PF/pension contributions, conveyance allowance, HRA, overtime, gratuity, commission. Exclusions capped at 50% of total remuneration; if exceeded, excess treated as wages.	Uniformity reduces litigation; impacts PF/gratuity calculations as higher “wages” base increases liabilities. Employers must restructure pay to avoid exceeding 50% exclusions, potentially raising costs by 10-15% for some.
Employee	Limited: Under Payment of Wages Act, applied to those earning < Rs. 24,000/month; Minimum Wages Act covered scheduled employments only.	Any person (excluding apprentices) employed on wages for skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, or clerical work. No wage threshold.	Broader inclusion protects managers/supervisors; extends minimum wage protections to unorganized sectors, benefiting ~500 million workers but increasing compliance for small firms.
Employer	Varied: Included owners, managers, or persons responsible for supervision/control in specific acts.	Includes owner/occupier, manager, or person responsible for supervision/control; for contractors, the principal employer.	Clarifies liability in contractor setups; reduces ambiguity in multi-employer scenarios, aiding dispute resolution.
Bonus	Under Payment of Bonus Act, allocable surplus-based; minimum 8.33%, max 20%; disqualifications for fraud/theft.	Similar, but adds disqualification for sexual harassment convictions; payable even if dispute referred to tribunal.	Enhances accountability; ensures minimum payout during disputes, protecting workers but adding employer obligations.

Key Changes (Old vs. New Provisions)

Changes focus on expansion, simplification, and penalties. For instance, floor wages prevent state-level undercutting, potentially raising minimum wages in low-income regions by 20-30%.

Subject Matter	Old Provisions (From Relevant Acts)	New Provisions (Code on Wages, 2019)	Detailed Impact/Explanation
Applicability	Limited to scheduled employments (Minimum Wages Act) or wage ceilings (Payment of Wages Act: < Rs. 24,000/month).	Applies to all establishments and employees, including organized/unorganized sectors; no wage limits.	Universal coverage could benefit 90% of India’s workforce in informal sectors; employers face higher compliance costs but reduced multiple filings. Economic impact: Promotes wage equity, potentially boosting consumption in rural areas.
Floor Wages	No central floor; states set minimum wages independently, leading to variations (e.g., Rs. 100-400/day across states).	Central Government sets floor wage; states cannot set below it; different floors for regions/skills.	Prevents wage dumping; could increase wages in backward states by 15-25%, aiding migration control but raising business costs in labor-intensive industries like textiles.
Claim Period for Wages	6-12 months (varied by act, e.g., 6 months under Minimum Wages).	Extended to 3 years from due date.	Gives workers more time for claims, reducing exploitation; employers need better record-keeping to defend old disputes, potentially increasing legal costs.
Mode of Payment	Mostly cash/cheque; electronic not mandated.	Mandatory bank transfer/electronic; cash only for < Rs. 1,000 claims.	Modernizes payments, reducing cash handling risks; benefits remote workers via digital inclusion but challenges unbanked employees in rural areas.
Gender Discrimination	Prohibited in wages (Equal Remuneration Act) but limited to same work; no mention of recruitment/promotions.	Prohibits in wages, recruitment, transfers, promotions for same/similar work; covers all genders.	Strengthens equality; could reduce gender pay gap (currently ~20%) but requires HR policy overhauls, impacting hiring in male-dominated sectors.
Bonus Payment	No provision for disputes; disqualification only for fraud/theft.	Minimum 8.33% during disputes; adds sexual harassment disqualification.	Protects workers in litigation; aligns with #MeToo, enhancing workplace safety but adding HR scrutiny.
Registers/Returns	Multiple (10+ registers, 4 returns across acts).	Simplified: 2 registers, 1 annual return.	Reduces paperwork by 70%; saves time/costs for SMEs, allowing focus on operations.
Penalties	Lower: e.g., Rs. 500-1,000 fines; no compounding.	Higher: Up to Rs. 50,000 for wage violations (first offense), Rs. 1 lakh repeat; compounding at 50% fine.	Deters non-compliance; compounding encourages quick resolutions, reducing court burdens. Inspector-cum-Facilitators advise before penalizing, promoting collaborative enforcement.

2. Industrial Relations Code, 2020

This code merges three old acts: the Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946; and Industrial Disputes Act, 1947. It introduces fixed-term employment, raises thresholds for layoffs/closures, and mandates negotiating councils to curb union multiplicity. Changes aim to balance worker protections with employer flexibility, but may weaken collective bargaining in smaller firms.

Key Definitions (Old vs. New)

Definitions broaden worker inclusion while excluding certain institutions, reducing scope for disputes over “industry” status.

Term	Old Definition (From Relevant Acts)	New Definition (Industrial Relations Code, 2020)	Key Changes/Impact
Worker	“Workman” under Industrial Disputes Act: Non-managerial, earning < Rs. 10,000/month initially (later raised).	Person employed for skilled/unskilled/manual/operational/supervisory/technical/clerical work; includes journalists/sales employees; excludes managerial (earning > Rs. 15,000/month supervisory).	Expands to gig-like roles; protects more white-collar workers but excludes high-earners, impacting IT/sector disputes.
Industry	Broad: Any business/trade; judicial exclusions for domestic/charitable.	Excludes charitable/philanthropic institutions, sovereign government functions (e.g., defense), domestic service.	Narrows scope, exempting NGOs/hospitals; reduces litigation but may leave some workers unprotected.
Fixed-Term Employment	Not defined; treated as permanent, leading to retrenchment claims.	Engagement for fixed period via contract; eligible for pro-rata benefits like gratuity.	Legitimizes flexible hiring; benefits seasonal industries but risks job insecurity if misused.
Strike	Allowed with conditions in non-public utilities; no flash strikes ban.	Prohibited without 14-day notice; banned during conciliation/arbitration; flash strikes illegal.	Curbs sudden disruptions; promotes dialogue but criticized for limiting worker leverage.

Key Changes (Old vs. New Provisions)

Thresholds for permissions rise from 100 to 300 workers, easing operations for medium firms but raising layoff fears.

Subject Matter	Old Provisions (From Relevant Acts)	New Provisions (Industrial Relations Code, 2020)	Detailed Impact/Explanation
Fixed-Term Employment	No provision; all hires potentially permanent.	Introduced with full statutory benefits (gratuity after 1 year); no retrenchment on expiry.	Enables flexible staffing in manufacturing/IT; workers gain benefits, but could lead to “perma-temp” exploitation without conversion rights. Economic boost: Attracts FDI by reducing hiring rigidity.
Layoff/Retrenchment/Closure Permission	Required for factories/mines with ≥100 workers.	Raised to ≥300 workers; government can notify higher/lower.	Eases operations for 80% of establishments (<300 workers); critics say it weakens job security amid unemployment (8-10%). Reskilling fund (15 days’ wages) mitigates via training.
Strike/Lockout	14-day notice only in public utilities; allowed during adjudication.	14-day notice for all; prohibited during conciliation (60 days validity), arbitration, or 60 days post-award.	Reduces industrial unrest (strikes down 50% historically); promotes arbitration but may suppress unions, affecting wage negotiations.
Negotiating Union/Council	No mechanism; multiple unions led to exploitation.	Sole negotiating union if >51% members; council if none.	Streamlines bargaining; reduces inter-union rivalry, benefiting large firms but challenging small unions.
Industrial Tribunal	Single member.	Two members (judicial + administrative).	Improves expertise; faster resolutions, reducing backlog (millions of cases).
Penalties	Lower fines; no compounding.	Up to Rs. 10 lakh + 6 months jail; compounding at 50-75% fine.	Stronger deterrence; compounding saves court time, encouraging compliance.

3. Code on Social Security, 2020

Consolidating nine old acts (e.g., Employees’ Provident Funds Act, 1952; Maternity Benefit Act, 1961; Unorganised Workers’ Social Security Act, 2008), this code extends benefits to gig/platform workers and introduces electronic registration. It prioritizes inclusivity but faces implementation challenges in informal sectors.

Key Definitions (Old vs. New)

New terms for modern workforces ensure gig workers access schemes.

Term	Old Definition (From Relevant Acts)	New Definition (Code on Social Security, 2020)	Key Changes/Impact
Gig Worker	Not defined; excluded from most benefits.	Person working outside traditional employer-employee relation (e.g., freelancers).	Enables schemes for 10-15 million gig workers; aggregators contribute 1-2%, boosting social security net.
Platform Worker	Not defined.	Engaged in platform work via online intermediaries.	Covers app-based jobs (e.g., Uber); mandates contributions, reducing vulnerability in gig economy.
Fixed-Term Employee	Not explicitly; gratuity after 5 years continuous service.	Contract for fixed period; pro-rata benefits.	Gratuity after 1 year; equalizes with permanents, aiding flexible labor markets.
Social Security	Fragmented: PF/ESI for organized; limited for unorganized.	Includes PF, gratuity, maternity, insurance; schemes for unorganized/gig.	Holistic; Central/State boards oversee, potentially covering 90% workforce but requiring Aadhaar registration.

Key Changes (Old vs. New Provisions)

Extends ESI/PF to gig workers via schemes; limitation periods prevent indefinite claims.

Subject Matter	Old Provisions (From Relevant Acts)	New Provisions (Code on Social Security, 2020)	Detailed Impact/Explanation
Gig/Platform Worker Schemes	None; unorganized partially covered.	Central schemes for life/disability, health/maternity, old age; funded by aggregators (1-2% turnover).	Revolutionary for 400 million informal workers; could reduce poverty but burdens startups with contributions. Helplines/facilitation centers aid access.
Gratuity	5 years continuous service; not for fixed-term.	Pro-rata for fixed-term (1+ year); based on new wages.	Benefits short-term hires; increases liabilities (15 days’ wages/year), impacting finances but enhancing retention.
Registration	Separate per act; manual.	Electronic; deemed if registered under other laws.	Simplifies; reduces bureaucracy, saving time for 10 million establishments.
Limitation for Dues	No limit (PF); varied for others.	5 years for inquiries; 2 years post-dues.	Protects employers from old claims; encourages timely filings, reducing litigation.
Penalties	Lower; no enhanced for repeats.	Up to Rs. 3 lakh + 2 years jail; enhanced for repeats; compounding 50-75%.	Stronger enforcement; deters evasion, but voluntary coverage allows opt-ins with 75% employee consent.

4. Occupational Safety, Health and Working Conditions Code, 2020

Merging 13 old acts (e.g., Factories Act, 1948; Contract Labour Act, 1970; Inter-State Migrant Workmen Act, 1979), it broadens safety to all establishments and mandates appointment letters. Changes emphasize welfare but permit night shifts for women with safeguards.

Key Definitions (Old vs. New)

Expands to commercial establishments; narrows contract labour.

Term	Old Definition (From Relevant Acts)	New Definition (OSHWC Code, 2020)	Key Changes/Impact
Worker	Varied; Factories Act: Factory workers; excluded managers.	Employed for any work; includes journalists/sales; excludes managerial > Rs. 18,000/month supervisory.	Covers 10+ worker establishments; protects more but thresholds ease for small units.
Establishment	Limited (e.g., factories ≥10 power/20 manual).	Any place with industry/trade; includes commercial with 10+ workers.	Broader; applies to offices/hotels, enhancing safety in services sector.
Contract Labour	Broad; included part-time/supply chain.	Hired via contractor; excludes regular employees with benefits/increments.	Narrows; prohibits in core activities unless exceptional, reducing exploitation.
Inter-State Migrant Worker	Recruited via contractors; no wage threshold.	Self-recruited or via contractor; earning ≤ Rs. 18,000/month.	Includes voluntary migrants; journey allowances for 10+ hires, aiding 100 million migrants.

Key Changes (Old vs. New Provisions)

Uniform hours and welfare; higher penalties promote compliance.

Subject Matter	Old Provisions (From Relevant Acts)	New Provisions (OSHWC Code, 2020)	Detailed Impact/Explanation
Working Hours	Varied (e.g., 9 hours factories); no uniform overtime consent.	Max 8 hours/day, 48/week; overtime with consent at 2x rate.	Standardizes; protects health, reducing burnout; flexible for media/transport but requires shift displays.
Women Night Shifts	Prohibited/restricted in many acts.	Allowed (7 PM-6 AM) with consent, transport, safety.	Promotes gender inclusion; could increase female participation (currently 20%) but needs robust safeguards.
Contract Labour	Licence for 20+; valid 1 year; core activity bans variable.	Threshold 50+; 5-year licence; prohibits core unless sudden increase.	Eases multi-state ops; principal employer liable for welfare, reducing contractor defaults.
Welfare Facilities	Factory-specific (e.g., canteens >250).	For all: Canteens (>100), creches (>50 women), medical; safety committees (>500).	Enhances in non-factories; costs up but improves morale/productivity.
Migrant Workers	Limited to contractors; no lump-sum allowance.	Journey allowance; toll-free helpline; database.	Supports mobility; reduces distress migration, benefiting construction/agriculture.
Penalties	Lower (e.g., Rs. 1,000-5,000).	Up to Rs. 2 lakh + jail; double for repeats; compounding 50-75%.	Deters violations; inspector-facilitators advise, fostering preventive culture.