Ease rules for employers! New labour codes slash jail provisions to 22; promote more facilitative regulatory setup

The four new labour codes have significantly reduced the number of offences that carry imprisonment, cutting them to 22 from 87 earlier, according to a senior government official, ET reported.Of these, 16 offences are compoundable, while only six sections now provide for imprisonment along with higher fines for first-time violations related to safety and social security. The overhaul aims to balance ease of compliance for employers with stronger worker protection, the official said.The government has consolidated 29 labour laws into four major codes: Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions Code (2020) — with a clear emphasis on decriminalisation and rationalised penalties.The codes introduce compounding of offences, allowing first-time violations punishable by up to one year’s imprisonment to be settled with the designated authority through a prescribed fee. Repeat offences can also be compounded after a gap of three to five years.“Through provisions such as for inspector-cum-facilitator, compounding and penalties, the new Codes promote a more facilitative regulatory environment, shifting the focus from punishment to compliance,” Rishi Bagla, chairman of CII Western Region said, ET reported.To further reduce litigation, the codes also introduce the concept of an “improvement notice” before prosecution, giving establishments time to rectify issues. Procedural lapses have been fully decriminalised and made compoundable, regardless of whether the contravention is by employers, employees or trade unions.