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Labour law reforms

The Ministry of Labour and Employment has taken several initiatives, legislative as well as administrative, to provide decent working conditions and improved quality of life for workers, employment generation and simplification of Labour Laws for ease of doing business. The endeavour of the Ministry is to create a climate of trust that is essential for economic growth and development and for the dignity of the labour force of the country.

Labour codes

As per the recommendations of the 2nd National Commission on Labour, Ministry has taken steps for codification of existing Central labour laws into four Codes by simplifying, amalgamating and rationalizing the relevant provisions of the Central Labour laws.

Salient Features of Four Labour codes

The Code on Wages, 2019

  • It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out. 
  • Subsumes 4 Labour Acts, namely, the Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976
  • Universalizes minimum wages to all employees in all sectors as against employees of scheduled employment, at present
  • Central Government to fix National Floor Wages
  • Revision of minimum wages ordinarily at an interval of 5 years
  • Universal applicability of provisions of timely payment of wages 

To access the complete document, click here.

The Industrial Relations Code, 2020

  • Subsumes 3 Labour Acts, namely, the Industrial Disputes Act, 1947; the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946.
  • The IR Code, 2020 has been notified on 29.09.2020.
  • Recognition of trade unions or federation of trade unions by the Central and State Government to replace Code of discipline
  • Concept of Recognition of Negotiating Union/Council introduced
  • Definition of Worker (limit for declaring supervisor to be notified) and definition of Industry (Bangalore Water Supply case)
  • Fixed Term Employment worker category included
  • Re-skilling Fund for training of retrenched employees
  • Concerted casual leave by 50% or more workers on a day to be treated as strike
  • Set up Industrial Tribunal by replacing multiple adjudicating bodies like the Court of Inquiry, Board of Conciliation, Labour Courts.
  • Reference of dispute to Industrial Tribunal by Appropriate Government done away.
  • Two Members Industrial Tribunal. Each individual Member can adjudicate all issues except matters relating to retrenchment, closure, strike, etc.
  • Dispute of registered trade unions included within the purview of Industrial Tribunal as demanded by Trade Unions
  • Incorporation of 14 days' notice period for all strikes and lockouts which was earlier required for public utility services only
  • Introduction of provision of compounding of offences

To access the complete document, click here.

The Occupational Safety, Health and Working Conditions Code, 2020

  • Subsumes 13 Labour Acts relating to Factories , Mines, Dock, Construction Workers, Plantation, Motor Transport & Beedi and Cigar, Contract Labour & InterState Migrant Workers.
  • The OSH Code, 2020 has been notified on 29.09.2020.
  • Code envisages:
    • Occupational Safety standards for different sectors Health and Working Conditions : ventilation, drinking water, etc.
    • Hours of Work , Overtime hours, Leave, Holiday, etc.
    • Welfare provisions : canteen, crèche, rest rooms, first aid, etc.
    • Mandatory provision for granting appointment letter by the employer.
    • Annual health check-up / examination had been provided in respect of tests etc. as prescribed for such employees or description or class of employees or establishments or description of establishments above the prescribed age, and the cost for the same to be borne by the employer
    • Duties of employers, employees, manufacturers, etc.
    • Registration of establishments including deemed registration,
    • Common Licence for contract worker, Factories, Beedi & Cigar.
    • Definitions in various Acts rationalised Including in case of “worker”, "establishment", "industry". Definitions reduced to 65 as against 160 in the 13 Acts.
    • One registration for establishments having 10 or more employees as against separate registrations under 6 Central Acts including BOCW Act, The Contract Labour Act, Inter-State Migrant Workmen Act, Motor Transport Workers Act, Plantation Labour Acts and Factories Act.
      • The applicability of the ISMW has been fixed at 10 to bring uniformity of applicability threshold in OSH Code
      • Further, wage limit as to who is ISMW would be notified by the Central Government.
      • For the purpose of collection of data while seeking registration, an establishment would have to necessarily indicate the number of ISMW employed in his establishment.
      • Wide expansion of the definition of ISMW: to include (a) recruited through contractor (b) directly recruited by the employer (c) ISMW comes of his own for employment in another state. 
    • The ambit of the benefit to ISMW have been replaced to provide (a) lumpsum allowance for undertaking journey by migrant worker to visit his native place in a period to be decided by appropriate Government; and (b) to formulate a scheme for providing portability of benefits of public distribution system and portability of benefits to a worker who is engaged in building and other construction work in one State and move to another State by appropriate Government.
    • An all India licence de-linked from “work order” introduced to avoid obtaining of repeated licence for each work under existing Contract Labour Act.
    • Ambit of cine worker has been expanded to include all audio-visual workers and workers in the electronic media
    • Multiple committees under five labour Acts have been merged into one National Occupational Safety and Health Advisory Board. Provision of state advisory board has been provided.
    • Different applicability thresholds for welfare provisions like crèche, canteen, first aid, welfare officer etc in different Acts have been rationalized.
    • Compounding of offences has been introduced.
    • A part of the penalty for any violation of the provisions of the Code leading to death or serious bodily injury to any person, can be given to the victim or the legal heirs of the victim by the Court.
    • Web-based inspection introduced.
    • Number of returns reduced

To access the complete document, click here.

The Code on Social Security, 2020

  • Subsumes 9 Labour Acts including Employees' Provident Funds & Miscellaneous Provisions Act , Employees' State Insurance Act, Payment of GratuityAct, Maternity Benefit Act, Employees Compensation Act, Building and Other Construction Workers Welfare CessAct.
  • The Code on Social Security, 2020 has been notified on 29.09.2020.
  • Proposes to create a comprehensive framework legislation for social security
  • A right based system for phased universalization of social security contribution to be made by the employer/employee
  • Government may contribute for deprived category of worker

To access the complete document, click here.

The Employees' Compensation Act, 1923

Wage ceiling for calculation of compensation under the Employees' Compensation Act, 1923 has been revised to Rs. 15,000/- p.m. from Rs. 8,000/- p.m. w.e.f. 03.01.2020.

Source : Ministry of Labour & Employment 



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