ANALYSIS OF NEW LABOUR CODES

By

Name of the Student: Akash Chaudhary

Roll No. : 2016122

Semester: V

Name of the Program: 5 year (B.A., LL.B. / LL.M.)

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYA PRASTHA, SABBAVARAM,
VISAKHAPATNAM – 531035, ANDHRA PRADESH
Introduction

The Ministry of Labour and Employment introduced four Bills in 2019 to amalgamate 29 central
laws related to labour laws thereby simplifying and modernizing the labour regulations in a
labour intensive country, like India. These bills regulate: (i) Wages, (ii) Industrial Relations, (iii)
Social Security, and (iv) Occupational Safety, Health and Working Conditions, which have been
codified and enacted as:

1. The Code on Wages, 2019;

2. The Industrial Relations Code, 2020;
3. The Occupational Safety, Health and Working Conditions Code, 2020; and
4. The Code on Social Security, 2020

COMMON CHANGES

1. Appropriate government: The Central Government will be the 'appropriate government' for
public sector undertakings known as PSUs. This would be applicable even if the central
government's holding is less than 50%. The central government will be the appropriate
government for specific industries like telecom, banking, railways, mines. This includes any
controlled industry as well as the government may specify. The definition of 'controlled industry'
is given as any industry whose control has been mentioned under Central Acts in The
Occupational Safety, Health and Working Conditions Code, 2020.

2. Offences compoundable with imprisonment: Compoundable offenses under The Industrial

Relations Code, 2020 and The Code on Social Security, 2020 are punishable with one year of
imprisonment or fine. Sum of 50% of maximum fine shall be compoundable for offences with
fine and 75% for offences with imprisonment.

3. Inspectors-cum-Facilitators: of maximum fine shall be compoundable for offences with A

'Inspectors-cum-Facilitators' shall be established as new authority under The Occupational
Safety, Health and Working Conditions Code, 2020, The Code on Social Security, 2020 and The
Industrial Relations Code, 2020. Their duty will be to provide information and reports to industry
employees and employers regarding compliance as decided by the central/appropriate
government.

CODE ON SOCIAL SECURITY, 2020

The code was introduced to provide social security benefits by extending its goals to employers
and employees.1 The code seeks to simplify labour laws by amalgamating various enactments
such as:
 1. The Employees' Compensation Act, 1923
2. The Employees' State Insurance Act, 1948
3. The Employees' Provident Funds 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, 1961
8. The Building and Other Construction Workers Welfare Cess Act, 1996
9. The Unorganized Workers' Social Security Act, 2008

HIGHLIGHTS:

1. The code shall be applied to any establishment by notification of the central government
subject to the threshold specified.
2. Aggregators have been introduced in the Code as a digital intermediary or a
marketplace for a buyer or user of a service to connect with the seller or the service
provider. List of aggregators as mentioned in Schedule 7 of the code shall contribute
1%-2% of their annual turnover for the purpose of the social security fund.
3. The central government shall frame social security schemes with respect to providing
benefits under Employees' State Insurance Corporation (ESIC) for platform workers, gig
workers and unorganised workers. The code empowers the central government to
extend its social security benefit schemes to self-employed or to any other class of
persons as specified.
4. Fixed term employees shall be subjected to payment of gratuity on a pro rata basis by
the employer. The term of gratuity period has been reduced from 5 years to 3 years for
working journalists.
5. The Code of Social Security introduces the term 'career centre' for providing information
about job vacancies and vocational guidance to workers seeking employment. Career
centres shall be established by the central government as any office, place, portal or
employment exchange for providing career services.
CHANGES MADE IN THE CODE ON SOCIAL SECURITY, 2020:

THE INDUSTRIAL RELATIONS CODE, 2020

The Code introduces provisions for simplifying compliance burdens and promoting ease of
doing business in an establishment. The code seeks to simplify labour laws by amalgamating
various enactments such as:

1. The Industrial Disputes Act, 1947

2. The Trade Unions Act, 1926; and
 3. The Industrial Employment (Standing Orders) Act, 1946.

HIGHLIGHTS:

1. The Code has introduced a 'sole negotiating union' in establishments where there are
more than one trade union. Such sole negotiating union is required to have 51% or more
workers as members per Section 14 of the Code. Only the sole negotiating union shall
be permitted to negotiate terms with the employer.
2. The code provides provisions for workers to secure their employment after being laid off.
A fund shall be initiated consisting of contributions from the employer and the
appropriate government.
3. Mechanism for resolution of industrial disputes shall be constituted by the central
government consisting of a national industrial tribunal and one or more industrial tribunal.
4. As per the provisions of the Code, no person shall go on strikes and lock-outs in breach
of contract without giving prior notice of 60 days before going on strike or before 14 days
of submission of notice or during pendency of conciliation or tribunal proceedings
including within 7 days of conclusion of proceeding.

CHANGES MADE IN THE INDUSTRIAL RELATIONS CODE, 2020

OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020

The code was introduced in the Parliament to regulate and manage safety and health conditions
in industries and establishment.5 The code seeks to simplify labour laws by amalgamating
various enactments such as:

1. The Factories Act, 1948;

2. The Plantations Labour Act, 1951;
3. The Mines Act, 1952;
4. The Working Journalists and other Newspaper Employees (Conditions of Service and
Miscellaneous Provisions) Act, 1955;
5. The Working Journalists (Fixation of Rates of Wages) Act, 1958;
6. The Motor Transport Workers Act, 1961;
7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966;
8. The Contract Labour (Regulation and Abolition) Act, 1970;
 9. The Sales Promotion Employees (Condition of Service) Act, 1976;
10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979;
11. The Cine Workers and Cinema Theatre Workers Act, 1981;
12. The Dock Workers (Safety, Health and Welfare) Act, 1986; and
13. The Building and Other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996.

HIGHLIGHTS:

1. An inter-state migrant worker shall be provided benefits with respect to portability and
ration, including cess.
2. Employees shall be given a health check-up by the employer once a year and free of
cost.
3. The employer shall mandatorily issue an appointment letter to the employee for
promoting formalisation at workplace.
4. National Occupational Safety and Health Advisory Board shall be constituted by the
central government as per the provisions of the Code. The board shall advise the central
government on issues related to implementation of health and safety standards
regulated under the Code. The State Occupational Safety and Health Advisory Board
shall also be constituted on a state-level.

CHANGES MADE IN OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS

CODE, 2020
CODE ON WAGES, 2019

The Code on Wages, 2019 was enacted to amend and consolidate the laws relating to wages,
bonus and matters incidental to the same. The code repeals 4 major labour law enactments -

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

HIGHLIGHTS:

1. The Code provides for a common definition of the term Wages, this is significant change
introduced to provide a uniform definition of the term Wages as opposed to the different
definitions given under the Payment of Wages Act, 1936, the Minimum Wages Act, 1948
 and the Payment of Bonus Act, 1965 1 . This will allow the employers to follow a
standard practice for computation of wages and avoid multiple interpretations of the term
wages.6
2. According to the conditions applicable in the Code, employers shall pay wages not less
than 50% of total remuneration. Minimum 50% of Cost-to-Company shall comprise of
basic pay and dearness allowance. The computation of wages will include basic pay,
dearness allowance, retaining allowance, and it specifically excludes house rent
allowance, conveyance, statutory bonus, overtime allowance, and commissions.
3. The Central Advisory Board shall be constituted by the central government as per the
provisions of the Code. It shall comprise members for representation of employers and
employees including independent persons and 5 state government representatives.
State Advisory Board shall comprise representative members of employers and
employees including independent persons.

CHANGES MADE IN THE CODE ON WAGES, 2019

CONCLUSION:

The new labour code introduces various provisions and special provisions for accommodating
better regulations for industries and establishments thereby allowing industries flexibility.
Further, the codification and consolidation of such laws has also led to expansion of the ambit
and applicability of the laws, ease of compliance, removal of multiplicity of definitions and
overlapping of authorities. The new set of rules shall empower the relationship between the
employer, employee, the government and have a positive long-term impact on the industry and
further contribute towards the idea of ease of doing business.