New Labour Codes Trim Harsh Penalties For Employers, Leave Only 22 Offences Punishable By Jail

In a significant regulatory overhaul, the Centre’s four labour codes sharply reduced the number of offences carrying imprisonment for employers- from 87 earlier to just 22- offering substantial relief to businesses while retaining strict safeguards for worker welfare.

Of the 22 provisions that still carry jail terms, 16 offences are now compoundable and only six sections prescribe imprisonment for first-time violations, primarily relating to workplace safety and social security breaches. The revisions aim to strike a balance between ease of compliance for establishments and strong protection for workers.

How Have Labour Laws Been Rationalised?

The government consolidated 29 labour laws into four comprehensive codes- the Code on Wages (2019), Industrial

Relations Code (2020), Code on Social Security (2020) and the Occupational Safety, Health and Working Conditions Code (2020). The restructuring is built on decriminalisation, simplification of procedures and rationalisation of penalties.

A major reform is the introduction of compounding of offences. First-time violations that earlier attracted up to one year’s imprisonment can now be settled on payment of a prescribed fee. Even repeat offences may be compounded after a cooling-off period of three to five years.

What Is Role Of Improvement Notices?

The codes introduce “improvement notices,” a pre-prosecution mechanism aimed at reducing litigation. Authorities must issue such notices and give sufficient time for establishments to rectify violations before legal action can begin. Procedural lapses- whether by employers, employees or trade unions- have been fully decriminalised and made compoundable, irrespective of the nature of contravention.

The transition from punitive action to corrective facilitation aims to enhance compliance levels, reduce harassment and modernise India’s labour regulation landscape- without diluting worker protections.