Highlights Of News Labour Codes

Update: 2022-07-05 04:21 GMT

Many of the Employment laws of our country have not been revised for a long period. Legislature has therefore, drawn 4 Labour Codes namely : a) The Code on Wages 2019, b) The Industrial Relations Code 2020 , c) The Code on Social Security Code 2020, and d) The Occupational Safety, Health and Working Conditions Code 2020, popularly known as Labour Codes, 2020, combining various statutes with certain modifications. When these get executed, there will be significant changes. Some of the pertinent ones are:

  • (i)Definition of wages will stand revised. According to Codes, total excluded components which are not attracted for purposes of Provident Fund, gratuity, bonus, etc. of CTC should not exceed 50% of the total remuneration.
  • Retrenchment, closure provisions would be eased, but there won't be immediate hire and fire. Industrial Relations Code, 2020 allows factories, mines, plantations etc. with up to 300 workers to retrench or close without seeking permission from appropriate government. Till now this provision has been applicable only to units with up to 100 workers. Threshold of 300 is there just under the Uttar Pradesh Industrial Disputes Act and in some states by virtue of state notifications.
  • Definition of Cine Workers which was restricted to feature films under the Cine-Workers and the Cinema Theatre Workers (Regulation of Employment) Act of 1981, will now expand and become audio-visual workers. This means feature films, non-feature films, television, web-based serials, talk shows, reality shows, animation, cartoon depiction, digital production, musician, singer, news reader, dancer, stunt person, technical, artists etc. all shall be covered within the Codes.
  • (iv)In case of fixed term employees, gratuity a terminal / retiral benefit will be applicable on mere completion of 1 year of service, unlike regular category of employees that require 5 years of service. For Working Journalist, it will be 3 years. Provision that fixed term can be terminated without compliance of retrenchment clauses is retained in upcoming Codes as well .
  • (v)Supervisory level employees below Rs 18,000 will be considered as workman. Only salary cap is being amended. Current settled position of nature of duties being relevant to determine as to whether employee is workman or not, is not being modified. Further since Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 and Sales Promotion Employees (Conditions of Service) Act, 1976 will stand repealed and merged, employees defined under said Acts will stand included in definition of workman. This is basically amalgamation of current statutes.
  • (vi)Contractor has been included in the definition of "employer" in new Codes. As of now such a provision is there only under the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996. Although majorly all current labor laws recognize responsibility of principal employer, contractor for making compliances, however said statutes do not specifically include contractor as an "employer" in definition.
  • While filing appeals w.r.t. Provident Fund liabilities, current provisions entail 75% of the amount imposed as deposition (with discretion of court to reduce/waive) at the time of challenging an order of PF department. However, Social Security Code 2020 mentions 25% deposition.
  • (viii)The Codes also expands definition of 'working journalists' to cover electronic/digital media.
  • Benefits to gig, platform, unorganized workers have been included. If we closely read judgments of Apex court, currently also daily wagers, causal workers, any sort of category are covered for social security schemes. However, if the same employees are working in multiple organizations, executing new provisions will need to be contemplated.
  • Time limit of filing cases before labour court/Industrial Tribunal will be 2 years. This will curtain filing of stale disputes; System of reference to labour court/Industrial Tribunal will be done away with and will remain only in cases of National Tribunal. Worker/s may apply to labour court/Industrial Tribunal 45 days after the application for conciliation of dispute was made.
  • Uniform Registration under Contract Labour and other provisions will become applicable. License to contractor will be valid for a period of 5 years. Contract Labor provisions will be applicable to establishment with 50 or more workers after implementation of Codes, current figure being 20.
  • It will be mandatory for employers to issue appointment letter. Contractors will also need to give experience certificate.
  • There will be establishment of re-skilling fund. Prescribed amount per worker will need to be transferred by employer at the time of retrenchment, apart from compliance of other retrenchment provisions.
  • (xiv)Modifications will be there in daily working hours , leaves, pay days etc .
  • (xv)It is to be noted that Labour Codes are a Central Legislation. State Acts such as Shops and Establishment Act will remain as it is, unless specifically amended.
  • Some of the penalties shall increase to couple of lakhs apart from enhanced imprisonment years .
  • Threshold workers limit for framing standing orders will stand increased to 300.
  • For strikes, 14 days' notice will have to be given to employer by workers/union. Validity of such a notice of strike will remain for a period of 60 days. No urgent strikes permissible after the implementation of Codes. During conciliation, court case, arbitration proceedings etc. and prescribed period thereafter, strike will stand prohibited. Like strike is a weapon in the hands of workers, lockout is in the hands of employer. Similar provisions have been made for lock out also.
  • There will be specific provisions for recognition of trade unions.
  • Some of the Industrial Tribunals may have Division Bench, one judicial officer and one officer from Government.
  • (xxi)There is power to defer application of the Code in the event of disaster, pandemic, etc. Code also empowers the appropriate government to exempt any industrial establishment or class of industrial establishments from certain provisions of the Code, subject to fulfilment of conditions.
  • Disbursement of wages will mandatorily have to be done through bank transfer or electronic mode. Only where express permission would be there, payment could be allowed in any other mode.
  • Incase principal employer is obliged to pay wages to contract labour due to non -compliance by contractor , there will be provisions for recovery of such payment from security deposit made by contractor while taking license .
  • (xxiv)Inter-state Migrant workers will include workers from other states directly coming on their own or called by employer or engaged through contractor.
  • (xxv)There are provisions w.r.t. notification of vacancies to Government.
  • (xxvi)Woman would be allowed to work late night with due precautions at many places which till now was disallowed.
  • (xxvii)Government will be able to extend ESI scheme to any hazardous occupation even if a single employee is employed .
  • (xxviii) A fixed limitation period of 5 years will be set for Provident Fund Authorities for initiation of inquiry for non-compliance.
  • (xxix) 'Building and other construction works' will exclude residential works having a total cost of construction exceeding Rs 50 lakhs or such amount as may be notified and employing more than a certain notified number of workers. Such constructions would thus not be subjected to the levy of cess.
  • (xxx)Aadhaar number is made mandatory for availing benefits and services under the Code.

Above are some of the key changes that will take place as and when Codes are implemented.

The author is an Advocate practising  at Supreme Court and High Court of Delhi. Views are personal


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