Labour Codes

Subject: Economy

Section: Unemployment

Context:

Prime Minister Narendra Modi will inaugurate the two-day conference at Tirupati on Thursday which will deliberate on various issues:

Details of deliberations

Reforms and social security for informal workers,
Vision-2047 for workforce
Proposed implementation of the four labour codes.
- Central government is aiming for consensus with states in all respects as well as publishing draft rules by all states and Union Territories.
Integrating e-Shram portal for social security schemes run by the Central and state governments to universalise social protection for workers and improve employment opportunities for all.
Improving medical care and services through ESI (employee state insurance) hospitals run by state governments and integration with Pradhan Mantri Jan Arogya Yojna (PMJAY).

Concept:

Major Highlights of the New Labour Code

Code of Wages 2019:

It regulates the wages and bonus payments in all employment areas where any industry, trade, business, or manufacturing is being carried out.
It subsumes the following four labour laws:
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
It universalizes the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling and seeks to ensure “Right to Sustenance” for every worker and intends to increase the legislative protection of minimum wage.
It has been ensured that employees getting monthly salary shall get the salary by 7th of next month, those working on a weekly basis shall get the salary on the last day of the week and daily wagers should get it on the same day.
The Central Government is empowered to fix the floor wages by taking into account the living standards of workers. It may set different floor wages for different geographical areas.
The minimum wages decided by the central or state governments must be higher than the floor wage.

Industrial Relations Code 2020

Industrial Employment (Standing Orders) Act, 1946 makes it obligatory for employers of an industrial establishment where 100 or more workers are employed to clearly define the conditions of employment and rules of conduct for workmen, by way of standing orders/services rules and to make them known to the workmen employed.
- The new provision for standing order will be applicable for every industrial establishment wherein 300 or more than 300 workers are employed or were employed on any day of the preceding twelve months.
It proposes that workers in factories will have to give a notice at least 14 days in advance to employers if they want to go on strike.
- No person employed in any industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal or a National Industrial Tribunal and sixty days after the conclusion of such proceedings.
It also introduces new conditions for carrying out a legal strike. The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present.
Besides, every industrial establishment employing 20 or more workers will have one or more Grievance Redressal Committees for resolution of disputes arising out of employees’ grievances.
The code also proposes setting up of a reskilling fund to help skill retrenched workers.

Occupational Safety, Health and Working Conditions Code 2020

It spells out duties of employers and employees, and envisages safety standards for different sectors, focusing on the health and working condition of workers, hours of work, leaves, etc.
The code also recognises the right of contractual workers.
The code provides employers the flexibility to employ workers on a fixed-term basis, on the basis of requirement and without restriction in any sector.
More importantly, it also provides for statutory benefits like social security and wages to fixed-term employees at par with their permanent counterparts.
It also mandates that no worker will be allowed to work in any establishment for more than 8 hours a day or more than 6 days in a week.
In case of overtime, an employee should be paid twice the rate of his/her wage. It will be applicable to even small establishments, which have upto 10 workers.
The code also brings in gender equality and empowers the women workforce. Women will be entitled to be employed in all establishments for all types of work and, with consent, can work before 6 am and beyond 7 pm subject to such conditions relating to safety, holidays and working hours.
For the first time, the labour code also recognises the rights of transgenders. It makes it mandatory for industrial establishments to provide washrooms, bathing places and locker rooms for male, female and transgender employees.

Code on Social Security 2020

This will replace nine social security laws, including Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme, Employees’ Compensation Act, among others.
The code universalizes social security coverage to those working in the unorganised sector, such as migrant workers, gig workers and platform workers.
For the first time, provisions of social security will also be extended to agricultural workers also.
The code also reduces the time limit for receiving gratuity payment from the continuous service of five years to one year for all kinds of employees, including fixed-term employees, contract labour, daily and monthly wage workers.
It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganized workers, gig workers and platform workers.
Also, aggregators employing gig workers will have to contribute 1-2% of their annual turnover for social security, with the total contribution not exceeding 5% of the amount payable by the aggregator to gig and platform workers.