Benefits of Labour Codes: UPSC Daily Important Topic | 18 July 2022

Benefits of Labour Codes

∆Code of Wage Act 2019:

✓It is expected to reduce litigation as it streamlines the definition of wages.

✓It will substantially reduce the number of minimum wages in the country from the existing more than 2000 rates of minimum wages.

✓This would ensure that every worker gets a minimum wage which will also be accompanied by an increase in the purchasing power of the worker thereby giving a fillip to growth in the economy.

∆Consolidation and simplification of the Complex laws:

✓The three Codes (IR , SS & OSHW) simplify labour laws by subsuming 25 central labour laws that have been on the table for at least 17 years.

✓It will provide a big boost to industry & employment and will reduce multiplicity of definition and multiplicity of authority for businesses.

∆Single Licensing Mechanism:

✓The codes provide for a single licensing mechanism.

✓It will give fillip to industries by ushering in substantive reform in the licensing mechanism. Currently, industries have to apply for their licence under different laws.

∆Easier Dispute Resolution:

✓The codes also simplify archaic laws dealing with industrial disputes and revamp the adjudication process, which will pave the way for early resolution of disputes.

∆Ease of Doing Business:

✓According to the industry and some economists, such reform shall boost investment and improve ease of doing business.

✓It drastically reduces complexity and internal contradictions, increases flexibility & modernizes regulations on safety/working conditions

∆Other benefits for Labour:

✓The three codes will promote fixed term employment, reduce influence of trade unions and expand the social security net for informal sector workers.

∆Gender parity:

✓Women have to be permitted to work in every sector at night, but it has to be ensured that provision for their security is made by the employer and consent of women is taken before they work at night.