Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour policies need to change for better quality livelihoods


From UPSC perspective, the following things are important :

Prelims level: Universal basic income.

Mains level: Social security ,Inclusive growth.


  • One of the biggest economic fallout of the pandemic has been the deteriorating labour market conditions.
  • Given the ebb and flow of the pandemic, the growth recovery is likely to be fragmented and will weigh on the number and types of jobs available.

What is quality and sustainable livelihood?

  • “A livelihood comprises the capabilities, assets and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future, while not undermining the natural resource base.’’

Sustainable livelihoods objectives

  • improved access to high-quality education, information, technologies and training and better nutrition and health;
  • a more supportive and cohesive social environment;
  • more secure access to, and better management of, natural resources;

Definition of labour welfare

  • Labour welfare relates to taking care of the well-being of workers by employers, trade unions, governmental and non-governmental institutions and agencies.
  • Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages.

Why labour law is needed

  • Labour law aims to correct the imbalance of power between the worker and the employer; to prevent the employer from dismissing the worker without good cause; to set up and preserve the processes by which workers are recognized as ‘equal’ partners in negotiations about their working conditions etc.

Constitutional mandate

  • Article 41 – The state shall within the limits of its economic capacity and development make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement and in other cases of underserved want.
  • Article 42 – The state shall make provision for securing just and humane conditions of work and for maternity relief.

Challenges in labour welfare in India

  • Technical glitches: Under the Constitution of India, Labour is a subject in the concurrent list where both the Central and State Governments are competent to enact legislations. As a result, a large number of labour laws have been enacted catering to different aspects of labour e.g. occupational health, safety, employment etc.
  • Loopholes: Because of the predominantly heavy handed labour regulations (also called as Inspector Raj) with exploitable gaps, the MNCs and domestic organizations have resorted to alternate ways i.e. employing contract labour at less than half the payroll of a permanent employee.
  • Gaps in labour laws: One of the main reasons for labour reforms is the concept of contract labour. Trade Unions suggest that this concept itself should be removed. There is stringent hiring and firing process defined in Industry Disputes Act. It makes it mandatory for the organization to seek Government permission before removing an employee.

Global best practices  

  • Universal basic income pilot project: For two years Finland’s government gave 2,000 unemployed citizens €560 a month with no strings attached. It was the first nationwide basic income experiment. The concept is slowly becoming difficult for people to ignore.

How will dynamic policies and labour codes respond?

  • Labour productivity: It is likely to improve with both employees and employers developing a sense of being partners in wealth creation.
  • Labour reform: A transparent environment in terms of workers’ compensation, clear definition of employee rights and employer duties.
  • Compliance un-burdening: Simplified labour codes making compliance easier are likely to attract investments.
  • Formalization of the economy: With more workers in the organized sector, leakage in terms of direct as well as indirect taxes may be plugged.


  • The guiding principle for India’s labour policy reformers should not merely be ring fencing jobs but safeguarding workers through social assistance, re-employment support (such as that which is provided in several Western nations) and skill building, and supporting employers in employee training and development.

Mains question

Q. Why there is need to make labour policies more dynamic? Do you think universal basic income approach will be the best way forward for achieving quality livelihood?

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