Introduction
The three Labour Codes mentioned as below covering organized, unorganized, and self-employed sectors have been introduced in September 2020:
1) The Code on Social Security, 2020;
2) The Industrial Relations Code, 2020; and
3) The Occupational Safety, Health and Working Conditions Code, 2020
Key features
1) Many definitions have been added/modified such as “fixed-term employment” “career centre”, “aggregator”, “gig worker”, “home-based workers”, “platform worker”, “wage ceiling” etc.
Definition of fixed-term employment has been introduced with the emphasis on the treatment in terms of wages and benefits at par with permanent employees doing the same work
“fixed-term employment” means the engagement of an employee on the basis of a written contract of employment for a fixed period:
Provided that—
(a) his 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
(b) 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 by him even if his period of employment does not extend to the required qualifying period of employment;
A revised definition of wages for all purposes has been provided below:
“wages” means 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,—
a) basic pay;
b) dearness allowance; and
(c) retaining allowance, if any,
but does not include—
(a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment;
(b) the value of any house accommodation, or of the supply of light, water, medical attendance, or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(d) any conveyance allowance or the value of any travelling concession;
(e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment;
(f) house rent allowance;
(g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal;
(h) any overtime allowance;
(i) any commission payable to the employee;
(j) any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment, under any law for the time being in force.
Provided that for calculating the wages under this clause, if payments made by the employer to the employee under sub-clauses (a) to (i) exceeds one half or such other per cent. as may be notified by the Central Government, of all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause.
Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in sub-clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent, of the total wages payable to him, shall be deemed to form part of the wages of such employee.
2) Inclusion of contract labour in the definition of the employee. Such inclusion of contract labour has an implication of the applicability of various laws basis on the minimum number of employees like PF, ESI etc. Now for calculating the number of employees will also include the number of contacts labour.
3) Option provided to the establishment to be covered under EPF and ESIC on a volunteer basis where the number of employees in that establishment is less than the threshold.
4) Provision for availing the common creche facility services has been provided in the code. An establishment may avail common crèche facility of the Central Government, State Government, municipality or private entity or provided by non- Governmental organization or by any other organization or group of establishments who may pool their resources for setting up of common crèche in the manner as they may agree for such purpose.
5) Any vacancy in an establishment shall be reported to the Career Center. Career Centres means any office (including employment exchange, place or portal) established and maintained for providing career services. There is no obligation on the employer to recruit through the Career Centre.
6) Scheme may be framed by the Central Government for providing social security benefits to self-employed workers or persons.
7) Under Industrial Relation Code, there are various changes have been done with respect to the trade unions, strikes, standing orders, lay-off, retrenchment and closure, compounding of offences, various definitions like workers, industries etc.
8) The Occupational Safety, Health and Working Conditions Code, 2020 is applicable to all establishments having ten or more workers. Here “worker” means any person (except an apprentice as defined under clause (aa) of section 2 of the Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward.
9) The limit of female workers for the purpose of creating a creche facility for the children below 6 years of age, would increase to 50 female workers from 30 currently.
10) The establishment employing 100 workers will be responsible to provide canteen facility, a reduction from the current limit of 250.
11) Provisions have been made for the employment of female employees for working beyond 7 pm till 6 am with their consent and conditions relating to safety, holiday, working hours.
12) Considering Covid-19, the Central Government has reserved his power to make regulation for general safety and health of persons in the event of a declaration of an epidemic, pandemic or disaster. This has not to be affected by any other law for the time being in force.
13) The Code has made maximum registration process to be initiated electronically and hence a minimum of physical contact exists.
14) Contrary to earlier provisions women workers are entitled to be employed in all establishments for all type of work including hazardous process subject to the conditions that the government may require the employer to provide adequate safeguards prior to their employment in hazardous or dangerous operations.
15) The workplace should be kept free from hazards that cause or likely to cause injury or occupational disease to the employees.
16) Employers are required to conduct free annual health check-up for their employees.
17) Issuance of appointment letter to every employee on their appointment in the establishment. This has been explicitly written for the first time in the law.
18) The Code makes mandatory provisions for the employers to provide a safe working environment and trying to cover the risk of unfortunate incidents arising in the course of employment.
The implementation of several provisions of the Codes has been left to the appropriate government. The Government of India is currently in the process of formulating the Rules under these Codes. Once the Rules have been drafted and finalized, the above Codes along with the Rules shall come into force on such date as appointed by the Government by notification in the Official Gazette.
