New Labour Laws: Creating a Middle Ground for a Balance Between the Rights ofEmployers and Employees

AUTHOR : Akshay Dubey, Graduated from Invertis University, BA LLB (2018-23)

In any country, it is important to protect the workers from mistreatment, inhumane work conditions, hazardous workplaces, underpayment/non-payment or delaying in payment of wages, and there are various laws for the same. In India, there are labour laws to protect the rights of the workers; such laws have been under implementation for many decades. However, keeping in mind the technological advancements, modern workplace issues, and rapidly changing workforce and industrial needs, the current labour laws are outdated and the fragmentation of the labour laws further makes their implementation even more challenging, making India in dire need to bring reforms in the labour laws. In an effort to codify these fragmented laws and to bring reforms, the Parliament of India has passed four new labour codes in 2020 to consolidate and simplify the existing 44 labour laws. These newly passed laws are the Code on Wages, 2019, Code on Industrial Relations, 2020, Code on Social Security, 2020, and Code on Occupational Safety, Health, and Working Conditions, 2020. Below are more details about these laws.

Code on Wages, 2019:

This act has subsumed the following acts:

- Payment of Wages Act, 1936

- Minimum Wages Act, 1948

- Payment of Bonus Act, 1965

- Equal Remuneration Act, 1976

The Code on Wages, 2019 contains laws including but not limited to determining minimum wages, payment of wages, establishment of an advisory board, and gender equality in remuneration and recruitment. The brief explanation is given below:

1. Determining Minimum Wages:

Section 9 of the Code of Wages introduces a new concept of Floor Wages. It is the minimum wage which must be paid by the employer regardless of the nature of the work. The government cannot fix a minimum wage below the floor wage.

2. Payment of Wages:

According to Section 54, any employer who fails to pay wages as per the standards prescribed in the code may be fined up to Rs. 50,000 on the first offense. On the second and subsequent offenses within 5 years, the employer may face imprisonment of up to 3 months or a fine of up to Rs. 100,000 or both.

3. Establishment of Advisory Boards:

Section 42 deals with Advisory Boards, which are established to fix minimum wages and encourage the employment of women.

4. Gender Equality in Recruitment and Remuneration:

Section 3 of the Code of Wages prohibits gender-based discrimination in recruitment and remuneration, ensuring 'equal pay for equal work' and promoting fairness and equity in employment opportunities.

Code on Industrial Relations, 2020:

This act has subsumed the following acts:

- Trade Unions Act, 1926

- Industrial Employment (Standing Orders) Act, 1946

- Industrial Disputes Act, 1947

The key provisions of this act are mentioned below:

1. Right to Strike:

This act provides for the rights of the workers to strike as per Section 77; however, they can strike only after giving a 14-day notice.

2. Re-skilling Fund:

Section 83 of this code requires the appropriate government to establish a fund to support the re-skilling of the workers.

3. Industrial Disputes:

Section 44 provides for the formation of a two-member (one presiding as a judicial member and one administrative member) Industrial Tribunal to address employer-employee disputes.

4. Expanded Definition of Workers:

This code has broadened the definition of workers and now includes:

- Journalists as per Section 2(f) of Working Journalists and Other Newspaper

Employees and Miscellaneous Provisions Act of 1955

- Sales Persons as per Section 2(d) of the Sales Promotion Employees (Terms of Service) Act 1976

- Individuals in managerial positions earning less than ₹18,000 are also included in the definition of ‘workers’

5. Creation of a Fund for Retraining the Laid-Off Workers:

Section 83 of this code provides for the creation of a fund for the retraining of laid-off workers. The employer has to give a contribution, which would be equal to the most recent 15-day pay of the worker.

Code on Social Security, 2020:

This act has subsumed the following acts:

- Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

- Employees’ State Insurance Act, 1948

- Employees’ Compensation Act, 1923

- Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

- Maternity Benefit Act, 1961

- Payment of Gratuity Act, 1972

- Cine-workers Welfare Fund Act, 1981

- Building and Other Construction Worker’s Welfare Cess Act, 1996

- Unorganised Workers Social Security Act, 2008

Below are the key provisions of this act:

1. Social Security Fund for Gig Workers, Unorganised Sector Employees and Platform Workers:

Section 141 provides for the establishment of a social security fund for gig workers, members of the gig economy, unorganised workers, and platform workers.

2. Expanded Definition of Employees:

Along with Section 2(26), The definition of employees has been expanded to include Gig Workers as per Section 2(35), Home-Based Worker as per Section 2(36), Inter-State Migrant Workers as per Section 2(41), Platform Workers as per Section 2(61), and Self-Employed Workers as per Section 2(75) in the definition of employees.

3. Reporting the Vacancies to the Career Centres:

Section 139 provides for mandatory reporting of job openings for employers to the Career Centres.

4. National Social Security Board:

Section 2(49) provides for the National Social Security Board, which shall be constituted according to Section 6.

5. Gratuity Period:

Section 53 provides for gratuity to be payable when the worker(s) has rendered the service for a period of not less than 5 years. However, journalists have to render the service for not less than 3 years to be entitled to gratuity. There is no requirement to render the service for any fixed period for fixed-term workers.

6. Crèche Facilities for Women:

Section 67 provides for crèche facilities for women employees.

7. Social Security Benefits to Self-Employed Workers and Workers of Any Class:

Sections 15(d) and 15(x) empower the Central Government to frame rules for providing social security benefits for unorganised workers, enhancing their life, dignity, and well-being.

Code on Occupational Safety, Health, and Working Conditions, 2020:

This act has subsumed the following acts:

- Factories Act, 1948

- Mines Act, 1952

- Dock Workers (Safety, Health and Welfare) Act, 1986

- Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996

- Plantations Labour Act, 1951

- Contract Labour (Regulation and Abolition) Act, 1970

- Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

- Working Journalist and other Newspaper Employees (Conditions of Service and Miscellaneous Provision) Act, 1955

- Working Journalist (Fixation of Rates of Wages) Act, 1958

- Motor Transport Workers Act, 1961

- Sales Promotion Employees (Condition of Service) Act, 1976

- Beedi and Cigar Workers (Conditions of Employment) Act, 1966

- Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

Below are the key provisions of this code:

1. Applicability:

As per Section 2(w), This act applies to:

- Factories with at least 20 workers (if the manufacturing process is power-driven)

- Factories with 40 workers (if the manufacturing process is non-power driven)

2. Employer’s Responsibilities:

Section 6 puts a responsibility on the employers to ensure a healthy and hazard-free workplace.

3. Covers Inter-State Migrant Workers:

This act now covers Inter-State Migrant Workers and provides them benefits, including:

- Ration as per Section 62(a)

- Construction worker cess as per Section 62(b)

- Journey allowance from native state to place of employment as per Section 61

4. Formalization of Employment:

As per Section 6(f), both the organised and unorganised workers have a legal right to an official appointment letter for the first time.

5. Daily Work Hour Limit:

As per Section 25, the daily work limit has now been set to a maximum of 8 hours.

6. Women Empowerment:

Section 43 empowers women to work in all establishments (between 7 pm and 6 am) subject to their:

- Consent

- Safety

7. Leave Policy:

Section 32 of the code allows 1 leave per 20 days of working (after 180 days, reduced from 240 days in the old law).

8. National Database:

Section 21 provides for the creation of a national database for unorganised sector workers through self-certification on an internet portal.

9. Migrant Worker Helpline:

Section 63 provides for a facility of a toll-free helpline for migrant workers to redress their complaints.

The old labour laws had many drawbacks, including but not limited to too much

fragmentations, outdated provisions, lack of coverage of all the workers as per the modern standards. The new labour laws mark a significant departure from the same, introducing the reforms much needed in our country by extending protections and benefits to the gig- workers, unorganised sector workers and self-employed workers. These laws also ensure gender equality, establish social security fund, fund for re-training etc. The implementation of these codes is a much welcoming step towards a more progressive and equal society.