Surjeet Singh Rana, IOCL

ranass@indianoil.in

  • In India, labour is a subject in the Concurrent List.
  • Since it is in the Concurrent List, both the Parliament and the state legislatures can enact laws on it.
  • As per the Central Government, before the new labour codes were passed, there were more than 40 central laws and more than 100 state laws on labour and related matters.
  • The Second National Commission on Labour (2002) recommended that the central labour laws should be integrated into groups like:

1. Industrial relations
2. Wages
3. Social security
4. Safety
5. Welfare and working conditions

This was recommended by the Commission because the existing labour laws were archaic, complex and had inconsistent definitions. The Commission suggested simplification of the labour codes for the sake of transparency and uniformity.

In 2019, the Central Government introduced four bills on labour codes to consolidate 29 central laws. While the Wages Code was passed in 2019, the other three bills were referred to a Standing Committee on Labour. As per the recommendations of the Committee, the government replaced these bills with new ones in September 2020, and these were passed in the same month. The Four labour codes are given and explained briefly hereunder:

1. Wage Code 2019
2. Industrial relation Code 2020
3. Occupational Safety Health and Working condition Code 2020
4. Social Security Code 2020

Wage Code 2019

The Code on Wages seeks to – regulate wages & bonus payments in all employments – where any industry, trade, business, or manufacturing is carried out. Code has 9 Chapters, 67 Sections & 26 definitions of constantly used terms Intended to promote equity & labour welfare and sustainability of enterprises, thereby catalysing economic growth and creation of employment opportunities.

Amalgamation of 4 Existing Acts:

1. Equal Remuneration Act 1976
2. The Minimum Wages Act 1948
3. The Payment of Bonus Act 1965
4. The Payment of Wages Act 1936

Code on Wages: Some Important Definitions

Establishments: Any place where any industry, trade, business, manufacture or occupation is carried on and includes Government establishment

Workers: Any person (except an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward

Employee: Any person employed on wages by an establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward

Wages: means all remuneration, whether by way of salaries, allowances or otherwise, if the terms of employment were fulfilled, be payable to a person employed in respect of his employment

The main feature of the Wage Code:-

Industrial Relation Code 2020

The IR Code 2020 seeks to bring transparency and accountability in the enforcement of labour laws, which is expected to lead to better industrial relations and, thus, higher productivity. The IR Code has a total of 104 sections spread over 14 chapters and three schedules.

Amalgamation of 3 Existing Acts:

1. The Trade Unions Act, 1926
2. The Industrial Employment (Standing Orders) Act, 1946
3. Industrial Disputes Act, 1947.

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These enactments primarily dealt with aspects like procedure for registration of trade unions, their rights and duties (Trade Unions Act, 1926); regulation of conditions of service including aspects like recruitment, discharge, misconduct (including acts or omissions which constitute misconduct), disciplinary action, holidays and leaves etc, by way of framing of the standing orders and obligating the employers to include these matters in the Standing Orders and getting the same certified (Industrial Employment Standing Orders Act, 1946) and the procedure and mechanism for investigation and settlement of industrial disputes as well as the procedure for resorting to lay-off, retrenchment and closure, etc. (ID Act, 1947)

    Salient Features of the Code:

    ● Contracting the scope of ‘Industry’ by defining the same so as to exclude institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic services; sovereign functions; domestic services; and any other activity as may be notified by the Central Government {Section 2(m) in the Code}.

    ● Revision/modification in the definition of ‘worker’ by way of enhancing the salary limit from INR 10,000 to INR 15,000 per month or an amount as may be notified by the central government from time to time {Section 2(zm) in the Code} so as to include persons engaged in a supervisory capacity drawing salary upto this limit.

    ● Modification/ change in the definition of ‘strike’ so as to include the concerted casual leave on a given day by 50 per cent or more workers employed in an industry, also within its ambit {Section 2(zf) in the Code}.

    Occupational Safety Health and Working condition Code 2020

    This Code is enacted to Consolidate and Amend the Laws Regulating the Occupational Safety, Health and Working Conditions of the Persons Employed. The OSH Code has a total of 143 sections spread over 14 chapters and three schedules.

    Amalgamation of 11 Existing Acts:

    1. The Factories Act, 1948
    2. The Plantation Labour Act, 1951. The Mines Act, 1952
    3. The Working Journalists and the other newspaper (Condition of Services) and Misc. Prov, Act, 1955
    4. The Working Journalists (Fixation of Rates of Wages ) Act, 1958
    5. The Motor Transport Workers Act, 1961
    6. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
    7. The Contract Labour (R&A) Act, 1970. The Sales Promotion Employees (Condition of Service) Act, 1976.
    8. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
    9. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
    10. The Doc Workers (Safety Health and Welfare ) Act, 1986
    11. The Building and Other Construction Workers Act, 1996

    Salient Features of the Code:

    ● The Code expands the definition of a factory as a premise where at least 20 workers work for a process with power and 40 workers for a process without power.

    ● The Code fixes the daily work hour limit to a maximum of eight hours.

    ● It defines an inter-state migrant worker as someone who has come on his/her own from one state, received employment in another state, and earns up to Rs.18000 per month.

    ● It also empowers women to be employed in all kinds of establishments and at night (between 7 PM and 6 AM), subject to their consent and safety.

    ● The OSH Code removes the manpower limit on hazardous working conditions and makes the application of the Code obligatory for contractors recruiting 50 or more workers (earlier, it was 20).

    ● It ensures that no charge is levied on any employee for the maintenance of safety and health at the workplace, including the conduct of medical examinations and investigations for the purpose of detecting occupational diseases.

    ● The OSH Code provides for the constitution of a National Occupational Safety and Health Advisory Board (National Advisory Board) by the Central Government, which shall be empowered to advise the Central Government.

    Social Security Code 2020

    “Social security” means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under this Code. The Social Security Code has a total of 164 sections spread over 14 chapters.

    Amalgamation of 9 Existing Acts:

    1. The Employees’ Compensation Act, 1923
    2. The Employees’ State Insurance Act, 1948
    3. The Employees Provident Fund and Miscellaneous Provisions Act, 1952
    4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
    5. The Maternity Benefit Act, 1961
    6. The Payment of Gratuity Act, 1972
    7. The Cine Workers Welfare Fund Act, 1981
    8. The Building and Other Construction Workers Welfare Cess Act, 1996
    9. The Unorganised Workers’ Social Security Act, 2008

    Salient Features of the Code:

    ● The Code has widened coverage by including the unorganised sector, home-based workers, self-employed workers, fixed-term employees, gig workers, platform workers, inter-state migrant workers, etc., in addition to contract employees.

    ● The code for the first time recognises the need to provide social security benefits such as including life insurance and disability insurance, health and maternity benefits, provident fund and skill upgradation to workers in the unorganised sectors who form a significant part of the workforce but are not covered by any of the existing welfare schemes.

    ● Under the code, while the definition of wages is broadly similar to the EPF Act, a new concept of deemed wages has been introduced. ▫ It means that if an employee receives more than 50% of the total remuneration in the form of allowances and other amounts that are not included within the definition of wages, then the excess amount would be deemed to be wages for the purposes of contributions towards EPF.

    ● The SS Code has fixed different thresholds with respect to eligibility for gratuity of permanent and fixed-term employees. However, a continuous service of five (5) years shall not be necessary where the termination of the employment of any employee is due to death, disability or expiration of fixed-term employment. Gratuity under the SS Code is payable to employees hired directly or through a contractor.

    ● EPFO’s coverage would be applicable to all establishments having 20 or more workers. At present, it is applicable only to establishments included in the Schedule.

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