Rolling Out Labour Codes

The Union Labour Ministry recently informed Parliament that several states in India have not yet published the draft rules for the labour codes passed in 2019 and 2020. Specifically, four states have not released the draft rules for the Code on Wages (2019), while five states have yet to release the draft rules for the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code, all of which were passed in 2020.

What are the Labour Codes?

• India’s labour laws had historically been fragmented, with over 29 laws governing various aspects of labour, many of which had been in place since the British colonial era.
• These laws had become increasingly irrelevant in a modern, dynamic economy, and compliance with them was cumbersome for both employers and workers.
• Thus, the previous 29 laws were condensed into four main codes (the new Labour Codes):
  • The Code on Wages (2019):The code ensures all workers receive minimum wages and timely payments, with a uniform definition of “wages” across all codes to avoid multiple interpretations and reduce litigation.
  • The Code on Social Security (2020):It focuses on expanding social security benefits to all workers, including gig and platform workers. It introduces a Re-skilling Fund and allows the government to extend benefits through the Employees’ State Insurance Corporation (ESIC) and Employees’ Provident Fund Organization (EPFO).
  • The Occupational Safety, Health and Working Conditions Code (2020):It improves workplace safety by including provisions for annual health check-ups and requiring employers to formalize employment contracts by issuing appointment letters. This enhances job security and ensures access to statutory benefits.
  • The Industrial Relations Code (2020):It simplifies compliance for businesses while safeguarding workers’ rights, including dispute resolution mechanisms and protections for collective bargaining.
• The four labour codes aim to strike a balance between easing labour market restrictions and enhancing workers’ rights and welfare. 

Unemployment Rates and Youth Employment:

• According to the ILO's Global Report Trends for Youth (2022), the worldwide youth unemployment rate was 6% in 2021. By 2023, the global youth unemployment rate had decreased to 13.3%.
• For India, the official data on employment and unemployment comes from the Periodic Labour Force Survey (PLFS) conducted by the Ministry of Statistics and Programme Implementation (MoSPI).
  • The PLFS data for 2023-24 showed that the unemployment rate for youth aged 15-29 in India was 2%, which is lower than the global average.
• Additionally, the Worker Population Ratio (WPR) for youth, which indicates the level of employment, improved from 4% in 2017-18 to 41.7% in 2023-24. This suggests a positive trend in youth employment in India.