Labour laws: Challenges And Measures in Employment and Labour Workforce Sector

Labour laws: Challenges And Measures in Employment and Labour Workforce Sector


Recently, Union Government has gone for complete codification of central labour laws into 4 codes:

  1. The code on wages, 2019
  2. The Occupational Safety, Health and Working Conditions Code, 2020
  3. The Code on Social Security, 2020
  4. The Industrial Relations code, 2020

Challenges in Employment and Labour Workforce Sector:-

  1. Dominance of agriculture – India has total workforce of about 52 Crore. 49% is employed in agriculture sector.
  2. Highest Unemployment in 45 years – 6.1% in 2017-18.
  3. Lesser % of Formalisation – ES 2019-20, formalisation is 9.98%.
  4. Salaried workforce is mere 23% (ES 2019-20).
  5. Poor Quality of human capital – only 5.4% of workforce undergo formal skill training (NSDP – 2015).
  6. India Skill Report, 2020 – stated that only 46.21% of those getting out of higher education institutes are employable.
  7. Insufficient employment generation – with 12 million new fresh faces entering labour market/year, but on an average, only 4.36 million formal jobs are created/year. (ES – 2019-20).
  8. With national WFPR at 40%, Female LFPR is only at 23.7%.

            Because of all these challenges, India’s Demographic dividend (with working age population of 15-64 years at 66.2%) may turn into demographic disaster.

Measures to improve the situation:-

Enhance Skill and Apprenticeship –

  1. LMIS (Labour Market Information System) should be made effective and functional.
  2. Ensure wider use of apprenticeship programmes by all enterprise.

Labour Law Reforms

  1. The National Policy for Domestic Workers needs to be brought in at the earliest.

Enhance Female LFP

  1. Effective implementation of Maternity Benefit Act, 2017 and Sexual Harassment of Women at Workplace Act, and ensuring implementation of these legislations in informal sector too.

Improve data collection on employment :-

  1. Ensure continuation of data collection under PLFS.
  2. Conduct annual enterprise survey using the GSTN.

Ease of Industrial relations to encourage formalisation

  1. Strengthen labour courts/tribunals for timely dispute resolution.


  1. Enforce the payment of wages through cheque or Aadhaar enabled payments for all.

The implementation of the above provisions will strengthen the “Rise of India”.

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