New Labour Codes and Threats to Informal Workers

Context

• India enacted four Labour Codes (2019–2020) to replace 29 existing labour laws:

  1. Code on Wages, 2019

  2. Industrial Relations Code, 2020

  3. Code on Social Security, 2020

  4. Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020

• Passed without tripartite consultation at the Indian Labour Conference (ILC).

• Concerns raised by unions regarding erosion of labour rights, especially for informal/unorganised workers.

Importance of Informal Sector

• Over 90% of India’s workforce

• Contributes nearly 65% of GDP

• Includes construction workers, agricultural labourers, beedi workers, salt workers, gig workers, etc.

Myth of “Universalisation” and “Consolidation”

Government Claim

• Codes consolidate existing laws

• Universalise social security

Reality

• Informal workers largely excluded except nominal mention in Social Security Code

• Sector-specific protections diluted or repealed

• Consolidation has resulted in loss of safeguards, not simplification

Occupational Safety Concerns (OSHWC Code)

Repeal of BOCW Act Protections

• Building and Other Construction Workers (BOCW) Act, 1996 had ~180 safety rules

• These rules are missing in OSHWC Code’s central rules

• Construction sector = one of the most hazardous sectors

Inspection Mechanism Weakened

• Physical inspections replaced by web-based inspections

• Ineffective for:

  • Workplace safety

  • Minimum wage enforcement

• Violates ILO Convention 81 (Labour Inspection) – ratified by India

Occupational Health Neglect

Health Risks Ignored

• Silicosis – construction & mining

• Cancer – agricultural workers (pesticide exposure)

• Eye, skin, kidney diseases – salt pan workers

International Obligations

• ILO Convention 161 (Occupational Health Services)

  • Mandates:

    • National occupational health policy

    • Identification, treatment, rehabilitation of occupational diseases

• OSHWC Code lacks these provisions → non-compliance

Threats under Social Security (SS) Code

Vague Welfare Provisions

• Organised workers: defined benefits

• Informal workers: vague “welfare schemes” without legal guarantees

Abolition of Sector-Specific Cesses

• GST reforms removed cesses for:

  • Beedi workers

  • Salt workers

  • Mining workers

• No alternative funding mechanism

• Results in financial vacuum for welfare schemes

Weakening of Welfare Boards

Centralisation Issues

• SS Code proposes one welfare board for all unorganised workers

• Ignores sectoral diversity and specific needs

e-Shram Portal Concerns

• Centralised registration

• Risk of central takeover of accumulated welfare funds

• Construction workers’ welfare funds ≈ ₹1 lakh crore

Tamil Nadu Case Study 

• Tamil Nadu has:

  • 39 sector-specific welfare boards

  • Strong framework under Tamil Nadu Manual Workers Act, 1982

• About:

  • 3 crore informal workers

  • 2 crore registered beneficiaries

• SS Code threatens:

  • Dissolution of existing boards

  • Loss of pensions, maternity aid, education assistance

• No saving clauses for State laws

Inter-State Variation

• Andhra Pradesh: Welfare boards closed

• Kerala: Refused to implement labour codes

• Tamil Nadu: Deliberating, resisting dilution

Key Issues Identified

• Erosion of labour rights

• Centralisation vs federal autonomy

• Absence of guaranteed funding

• Dilution of occupational health standards

• Violation of international labour conventions

Way Forward / Recommendations

• Insert saving clauses to protect State welfare boards

• Restore sector-specific legislation (e.g., BOCW Act)

• Ensure tripartite consultation before implementation

• Strengthen inspection mechanisms

• Guarantee dedicated funding for informal workers

• Align labour codes with ILO conventions

• States should safeguard progressive labour laws

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