A MORE UNIFIED LABOUR LAW REGIME WITH THE NEW LABOUR CODES: INDIA

Older than the nations’ independence is its labour laws, and the Central Government is finally attempting to consolidate, unify and improve them through 4 (four) new Acts.  Hailed as modern labour law, the Codes are drafted and designed to improve working condition and more importantly augment ease of doing business in India. The codes consolidate various definitions such as wages, employee, employer as well as new definitions such as fixed term employee and homebased worker have been introduced.

The 4 new labour codes that will replace the current central labour laws are discussed below however the Code of Wages and Code on Social Security are discussed more elaborately.

The Code on Wages, 2019

The Code focuses on simplifying laws related to payment of wages, overtime, bonus and minimum wages, etc. The most important aspect of this Code read with The Code on Social Security is that both of them consolidate the definition of wage which was entangled in different meanings under the old regime. Wage shall mean to include all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes basic pay; dearness allowance; and retaining allowance, if any. The Code also clarifies that bonuses, conveyance allowance, house rent alliance and overtime allowances shall not be included in wages, though provided the Government notifies otherwise and also for the purpose of equal wages to all genders conveyance allowance and overtime allowances could be considered for computation of wages.  

Section 3(1) of the Code prohibits discrimination in an establishment or any unit thereof among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.

The Code on Social Security, 2020

The objective of the Code is to amend and consolidate the existing labour laws relating to social security with a wider goal of extending social security benefits to all employees and workers irrespective them working in an organized or an unorganized sector. The Code brings, within itself the self-employed workers, home workers, wage workers, migrant workers, gig workers and platform workers for the purpose of social security schemes, including life insurance and disability insurance, health and maternity benefits, provident fund.

An important and a new definition under the Code is that of ‘fixed term employment’ which is defined as engagement of an employee on the basis of a written contract of employment for a fixed period provided that hours of work, wages, allowances, and other benefits shall not be less than that of a permanent employee doing the same work or work of a similar nature and further he shall be eligible for all benefits, under any law for the time being in force, available to a permanent employee proportionately according to the period of service rendered even if the period of employment does not extend to the required qualifying period of employment. The contribution to the provident fund has been reduced to 10% of the wages payable towards each of the employees, whether employed by him directly or by or through a contractor.

The Occupational Safety, Health and Working Conditions Code, 2020

This Code consolidates and amend the laws regulating the occupational safety, health and working conditions of the persons employed in an establishment and for matters connected therewith or incidental thereto. The Code is applicable to establishments with 10 or more workers. The Code also empowers women to be employed in all kinds of establishments and at night (between 7 PM and 6 AM) subject to their consent.

The Industrial Relations Code, 2020

The Code essentially repeals the long standing Industrial Disputes Act, 1947 and essentially is an Act to consolidate and amend the laws relating to Trade Unions, conditions of employment in industrial establishments or undertaking, investigation and settlement of industrial disputes and for matters connected therewith or incidental thereto.

The new reforms are positive amendment in the progress of the nation and fundamentally improves ease of doing business. Attempts have been made to ensure that no discrimination is based on gender, though the same shall mostly depend on the implementation of the Codes. The Central Government plans of implementing these reforms on 01.07.2022.

Published by Pushkar Taimni

Pushkar Taimni heads the practice at Law Chambers of Pushkar Taimni. He can be contacted at pushkar@ptaimni.com or taimnico@gmail.com.

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