New Labour Code which has been introduced recently
1. FOUR NEW
LABOUR CODES &
KEY CHANGES
IN 2020, THE INDIAN
GOVERNMENT
INTRODUCED FOUR
LABOUR-TO SUBSUME
THE EXISTING 29
CENTRAL LABOUR
AND INDUSTRIAL
LAWS AND AIM TO
AVOID MULTIPLICITY
OF LAWS
2. ries
of
Old
Vs
New
Legislation Sr. No. Old Legislations New Legislation
1
1. The Payment of Wages Act, 1936
2. The Minimum Wages Act, 1948
3. The Payment of Bonus Act, 1965
4. The Equal Remuneration Act, 1976
Code on Wages 2019
2
1. Industrial Employment (Standing Order) Act, 1946
2. Industrial Dispute Act, 1947
3. The Trade Unions Act, 1926
Industrial Relation Code 2020
( IR )
3
1. The Factories Act, 1948
2. The Contract Labour (Regulation & Abolition Act) Act, 1970
3. The Inter State Migrant Workmen (Regulation of Employment and Condition of Service) Act, 1979
4. Dock Workers ( Safety, Health and Welfare) Act, 1986
5. The Building and other Workers (Regulation of Employment and Conditions of Service) Act, 1996
6. The Working Journalist and other News Paper Employees (Conditions of service and Misc. Provisions) Act, 1955
7. The Working Journalists (Fixation of Rates of Wages) Act, 1958
8. The Beedi and Cigar workers (Conditions of employment) Act, 1966
9. The Cine workers and Cinema Theatre workers Act, 1981
10. Sales Promotion Employees (Condition of Service) Act, 1976
11. Mines Act, 1951
12. The Plantation Labour Act, 1951
13. The Motor Transport Workers Act, 1961
Occupational Safety, Health & Working
Condition Code 2020
( OSH)
1. The EPF and M.P. Act, 1952
3. Industrial
Relations
Code
2020
The Definition of Worker:
• Based on wages being drawn.
• Worker/Employees with salary up to Rs. 18000 will fall under the category of worker.
Fix term Employment:
• Employer can keep Fixed Term Employees (FTE) for specific duration and retrenchment compensation not to be paid.
• FTE will be entitled same salary or social security as regular employees.
• The codes provides that the fixed term employees will get all the statutory benefits like ESI, EPF, Bonus, Wages, etc. at par with regular employees who are doing work of
similar nature
• The termination of service of a worker as a result of completion of tenure of fixed term employment would not be retrenchment.
• The employee would be eligible for gratuity if he renders service under the contract for a period of one year.
Industrial Dispute Period:
• The employee can raise industrial dispute with the employer within a time limit of only 2 years instead of 3 years.
• Definition of Industrial Dispute has been modified to include the dispute arising out of discharge, dismissal, retrenchment or retirement of such worker.
• The worker may approach the Industrial Tribunal for a dispute relating to dismissal, retrenchment or termination of service within 45 days of making an application for
resolution of the dispute.
Lay-off and Retrenchment:
• Establishments with less than 300 employees can lay-off, retrench or close without government approval, earlier the limit was 100 employees.
• Employers of individual establishments such as mines, factories and plantations employing at least 300 workers are required to obtain prior permission of the central or
state government before lay-off, retrenching or closer. Any person contravening this provision shall be liable to a fine of Rs 1,00,000, which may extend to Rs 1,000,000.
• If an employee is suspended by the employer pending investigation or inquiry, the amount of subsistence allowance at the rate of 50% of the wages for the first 90 days of
suspension and at the rate of 75% of such wages for the remaining period of suspension shall be payable.
Grievance Redressal Committee:
• The number of members in an individual establishment employing 20 or more workers has been increased from 6 to 10.
Standing Order:
• The provisions of the standing orders shall apply to individual establishment having 300 or more workers, as amended by the appropriate Government.
Trade Union:
• The trade union will have to give notice 14 days before going on strike.
• To ensure better and effective participation of trade unions, a new facility of “Recognition of Negotiating Unions" has been introduced. Provision of “Negotiation Union”
and “Negotiation Council” has been made to settle any dispute through negotiation and workers will be able to get their rights
4. Occupational
Safety,
Health
&
Working
Condition
Code
2020
Appointment Letter:
• For the first time, workers were given the legal right to receive appointment letters.
• The code provides a single registration for an establishment instead of multiple registrations. This will create a centralized database and make it easier to do
business.
Health Checkup:
• Free health check-up once a year by the employer for workers above a certain age.
New category of workers has been included in this code:
• A Gig worker refers to a person who performs work or participates in work arrangements outside of the traditional employer-employee relationship and earns
income from such activities.
• Gig workers are independent arrangers, freelancers, workers who are employed on project-based work and short-term work. The most common are platform-based
jobs where workers earn money by providing specific services, including food delivery services.
• Platform worker means a person who is engaged in or performing platform work.
• Platform work means a form of employment in which organizations or individuals use online platforms to access other organization or individuals to solve a specific
problem or provide specific services in exchange for payment.
There is no major difference between Gig workers and Platform workers. This is the first time in India that application-based assignments carried out by multiple workers
are being recognized as an employee-employer relationship.
Addition in Cine Workers:
• The Code also covers audio-visual production, including feature films, non-feature films, television, web-based serials, talk shows, reality shows, etc. and under the
new definition of audio-visual worker, singers, news readers, dancers, stunt persons, technical artistes and work life supervisors etc. have been covered subject to
some pay wages ceiling to be notified by the Central Government.
Working Hours for Women:
• According to this new provision, female workers/women can work in night shifts with their consent. Moreover, the time slot of such night shifts will be from 7:00 PM
to 6:00 AM, which will be approved by the Central or State Government.
Working Hours:
• The working hours for different categories of establishments and employees will be as per the rules prescribed by the Central or State Government. Further, in
respect of overtime work, the employee will be paid double the rate of daily wages.
• Regarding leaves, the Code states that no employee shall work more than six days a week, although an exception is made for motor transport workers.
5. Social
Security
Code
2020
Revised Wages:
• 1st part includes all the components of salary that can be expressed in terms of money, such as basic salary, all reimbursements, all allowances, all benefits.
• 2nd part of the definition provides specific exclusions such as bonus payable under any law, conveyance allowance, house rent allowance, overtime allowance, accommodation,
electricity, water supply, medical care, other amenities/services excluded by general or special order of the appropriate Government, commission, contribution to provident
fund/pension, sums granted to meet special expenses, gratuity, retrenchment, remuneration payable under any other agreement between the parties.
• 3rd part of the definition provides that the total excluded components should not exceed 50% of the total remuneration. The third part of the definition provides the limit as the
definition very clearly specifies the list of exclusions, so whatever is paid to the employees will be covered and the limit within this specific exclusion cannot be more than 50%.
Employee Provident Fund Scheme (EPF):
• Aadhaar based registration is mandatory.
• The major reform in the Employees' Provident Fund Scheme includes the introduction of a limitation period of five years for initiating investigation and a limitation period of two
years for conducting enquiries.
• All establishments employing 20 or more workers are covered under EPF, earlier it was applicable only to establishments included in the schedule.
• This system has been designed to include self-employed or any other category within the scope of the EPF scheme.
• The penalty for not depositing the employee contribution deducted from the salary has been increased from Rs 10,000 to Rs 1,00,000 and a provision of imprisonment of one to
three years has been made.
• Thereafter, non-payment of contribution may result in imprisonment of two to five years and a fine of Rs three lakh.
Employee State Insurance (ESI):
• ESIC facility will be available for all districts.
• If the employer and majority of employees agree, voluntary registration will be allowed under the Code and the ESIC scheme will be implemented. Further, the government may
also extend the ESI scheme to any hazardous occupation even if it employs only one employee.
• Gig workers and unorganized sectors will also be able to link with the ESIC.
• Plantation workers will also come under the purview of ESIC.
• If an employer fails to pay ESIC contributions, the ESIC must pay benefits to the employees, which the ESIC may recover from the employer to the extent of the capitalized value
of the benefits, excluding the amount of contributions paid, interest and damages payable by the employer.
Maternity Benefit:
• Every woman is eligible to receive medical bonus up to Rs 3,500 where pre-natal and post-natal care is not provided by the employer, subject to the upper limit of Rs 20,000
specified by the Central Government, this upper limit of Rs 20,000 has been removed under the Code.
Right and duties of employees and employers:
• Employees also have rights and duties set out in the Code; employees will take care of their own health, follow specified safety and health measures, report unsafe conditions to
the inspector.
