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The Central Government codified 29 labour laws into 4 codes for the upliftment of workers by providing
them security, respect, health and other welfare measures. These labour reforms will not only enhance
the Government’s mission of ‘Ease of Doing Business’ but will also help in employment generation and
workers well-being. The benefits of these labour codes have been extended to unorganized sector as
well. These codes were passed in the Parliament and will become applicable soon after their publication
in the official gazette. The new Labour Law is divided into:
A) CODES ON WAGES, 2019
- It is a consolidation of 4 Acts i.e. Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Bonus Act, 1965, Equal Remuneration Act, 1976.
- The Code on Wages, 2019 provides for minimum wages to workers working in both organized and unorganized sectors.
- The Code provides that the Central Government shall fix floor wage taking into account minimum living standards of a worker and no employer shall pay to any employee wages less than the minimum rate fixed.
- Recognition to workers in unorganized sector in the country is provided by giving them equal rights.
- It provides for review of minimum wages in every five (5) years.
- It guarantees timely payment of wages to all workers and prohibits discrimination based on gender for payment of wages.
- The definition of wages is amended to include basic pay dearness allowance and retaining allowance.
- To remove regional disparity in minimum wages the provision of floor wage has been introduced. The determination of minimum wages has been made easy. It will be based on criteria such as skill level and geographical area.
- No worker shall work for continuous period unless a day of rest in every period of 7 days is provided.
- The total amount of deductions (such as house-accommodation, amenities) from the wages of an employee shall not exceed 50% of such wages.
B. CODE ON SOCIAL SECURITY, 2020
- It is a consolidation of 9 Acts i.e. the Employees’ Compensation Act, 1923, the Employees’ State Insurance Act, 1948, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, the Maternity Benefit Act, 1961, the Payment of Gratuity Act, 1972, the Cine Workers Welfare Fund Act, 1981, the Building and Other Construction Workers Welfare Cess Act, 1996 and the Unorganised Workers' Social Security Act, 2008.
- Employees engaged on fixed term to get same social security benefit as permanent employees.
- The code provides for creation of national database of workers through web portal and provides that all the employers employing more than 20 workers shall mandatorily report vacancies online.
- The code provides for mandatory registration of entities working in hazardous area with ESIC.
- The code provides for free treatment at hospitals and dispensaries of Employees’ State Insurance Corporation (ESIC) for workers contributing to the fund.
- The provisions of ESIC, Pension scheme will now be available to workers working in unorganized sector including platform workers, gig workers, plantation workers.
- The contributions by the employer and the employee to Provident Fund shall be 10% each of the wages and if any employee so desires, be an amount exceeding ten per cent. of the wages.
- The contributions by the employer to Pension Scheme shall not exceed 8.33% of the wages.
- The contributions by the employer to the Deposit-Linked Insurance Fund shall not be more than 1% of the wages.
- Requirement of minimum service for payment of gratuity in case of fixed term employees has been removed. Further, the employer shall mandatorily obtain insurance for paying off its liability towards the Gratuity.
- No woman shall be entitled to maternity benefit unless she has actually worked for a period of not less than 80 days in the 12 months immediately preceding the date of her expected delivery in an establishment of the employer from whom she claims maternity benefit.
- Every woman who returns to duty after delivery of child be allowed 2 additional breaks for nursing the child in the course of her daily work until the child attains the age of 15 months.
- Every establishment in which 50 employees are employed shall have the facility of crèche and the employer shall allow at least 4 visits a day to the crèche.
- There shall be levied and collected a cess for the purposes of social security and welfare of building workers at such rate not exceeding 2% but not less than 1% of the cost of construction incurred by an employer undertaking building or other construction work.
- The contribution to be paid by the aggregators to the Social Security Fund shall be at such rate not exceeding 2% but not less than 1% of the annual turnover of every such aggregator who falls within a category of Aggregators.
- The Central Government shall frame suitable welfare schemes for unorganised workers, gig workers and platform workers on matters relating to -
- i. life and disability cover;
- ii. health and maternity benefits;
- iii. old age protection;
- iv. education; and
- v. any other benefit as may be determined by the Central Government.
C. THE OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020
- It is a consolidation of 13 acts i.e. the Factories Act, 1948; the Plantations Labour Act, 1951; the Mines Act, 1952; the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955; the Working Journalists (Fixation of Rates of Wages) Act, 1958; the Motor Transport Workers Act, 1961; the Beedi and Cigar Workers (Conditions of Employment) Act, 1966; the Contract Labour (Regulation and Abolition) Act, 1970; the Sales Promotion Employees (Conditions of Service) Act, 1976; the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; the Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981; the Dock Workers (Safety, Health and Welfare) Act, 1986; the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.
- Earlier only workers appointed by a contractor were recognized as Inter-State Migrant Workers. Now the new Code provides enables the workers to register themselves as Inter-State Migrant Workers on the national portal and avail all the social security schemes and benefits.
- A National database will be created for Inter-State Migrant Workers.
- No worker shall be required or allowed to work for more than 8 hours in a day and not more than 6 days in any a week.
- There shall be displayed a notice of periods of work showing clearly for every day the periods during which workers maybe required to work.
- Every worker who has worked 180 days or more in a calendar year shall be entitled for 1 day leave for every 20 days of his work.
- If a worker does not take the whole of the leave allowed during the calendar year, then any leave not taken shall be added to the leave to be allowed in the succeeding calendar year or encash the leaves not availed. However, the total number of leaves to be carried forward shall not exceed 30 days.
- Women shall be entitled to be employed in all establishments for all types of work with their consent before 6 a.m. and beyond 7 p.m.
- No contractor shall supply or engage contract labour or undertake or execute the work through contract labour unless a licence is issued to him.
- No person shall be employed as an audio-visual worker in or in connection with production of any audio-visual programme unless an agreement in writing in the prescribed in executed and is registered with the competent authority.
- Social Security Fund to be established by the appropriate Government for the welfare of the unorganised workers.
- Every employer shall ensure that workplace -
- i. is free from hazards,
- ii. complies with the occupational safety and health standards,
- iii. provides annual health examination or test free of costs
- iv. provides and maintains a working environment that is safe and without risk to the health of the employees
- v. issues a letter of appointment to every employee on his appointment in the establishment
- vi. has a provision and maintains plant and systems of work
- vii. appoints safety officers in a -
- a. factory wherein 500 workers or more are ordinarily employed;
- b. factory carrying on hazardous process wherein 250 workers or more are ordinarily employed; or
- c. building or other construction work wherein 250 workers or more are ordinarily employed; or
- d. mine wherein 100 workers or more, are ordinarily employed.
- viii. Has adequate and suitable welfare facilities such as -
- a. washing bathing, clothing,
- b. first-aid boxes,
- c. canteen facilities wherein 100 or more workers including contract labourers are employed,
- d. shelters or rest-rooms and lunch-room in every establishment wherein more than 50 workers are employed,
- e. in case of mines, medical examination of the employees employed or to be employed in the mines, before their employment and at specific intervals;
- f. ambulance room in every factory, mine, building or other construction work wherein more than 500 are ordinarily employed
- g. medical facilities at the operating centres and halting stations, uniforms, raincoats and other like amenities for protection from rain or cold for motor transport workers appointment of welfare officer in every factory, mine or plantation wherein 250 or more workers are ordinarily
- h. Temporary living accommodation, free of charges and within the work site or as near to it as may be possible, to all building workers employed by him
D. INDUSTRIAL RELATIONS CODE, 2020
- It is a consolidation of 3 Acts i.e. the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, the Industrial Disputes Act, 1947.
- Workers covered under the ESI Scheme will be granted unemployment allowance in case of job loss.
- Workers will be provided 15 days wages for re-skilling in case of retrenchment.
- Tribunals to be set up for resolution of disputes within a year.
- A Trade Union which gets more than 51 % vote will be recognised as the Sole Negotiating Union. In any other case, a negotiating council of trade unions will be constituted.
- Industrial establishment in which 100 or more workers are employed are required to constitute a Works Committee.
- Industrial establishment in which 20 or more workers are employed are required to constitute a one or more Grievance Redressal Committees consisting of not more than 10 members with adequate representation of women workers.
- The State Government may appoint a person to be the Registrar of Trade Unions, and other persons as Additional Registrar of Trade Unions, Joint Registrar of Trade Unions and Deputy Registrar of Trade Unions.
- No employer, who proposes to effect any change in the conditions of service shall effect such change without giving to the workers as maybe prescribed or within 21 days of giving such notice.