Labour Codes Overview

Labour Codes
INDUSTRIAL RELATIONS CODE 2020
OCCUPATIONAL SAFETY, HEALTH &
WORKING CONDITIONS CODE 2020
SOCIAL SECURITY CODE 2020
CODE ON WAGES 2019

Industrial Relations Code 2020
Industrial
Employment
Standing Order
Act, 1946
Industrial
Disputes Act,
1947
Trade Unions Act,
1926

Key Changes
☺Employees with a salary up to Rs.18,000/- will fall under the category of worker.
☺ Fixed-term employment (now employer can keep fixed-term employees (FTE) for a specific duration and
retrenchment compensation not to be paid. These FTE will be entitled same salary or social security as a
regular employee).
☺Employee can an industrial raise dispute with the employer within the time limit of only 2 years instead of 3
years.
☺Trade Unions have to give notice 14 days before going on strike.
☺Establishment with less than 300 workmen can lay off, retrench, or close without government approval,
earlier this limit was 100 employees.
☺The number of members in the grievance redressal committee has been increased from 6 to 10.
☺Definition of “appropriate government” has been modified by including the establishments of the contractors,
thus contractor appropriate government shall be of the establishment where the contract labor has been
deployed.

104 Sections in 14 Chapters & 3 Schedules
Chapter 1 Preliminary Chapter 10
Special Provisions relating to Lay-off,
Retrenchment, and Closure
Chapter 2 Bi-partite Forums Chapter 11 Worker Re-Skilling Fund
Chapter 3 Trade Unions Chapter 12 Unfair Labour Practices
Chapter 4 Standing Orders Chapter 13 Offenses and Penalties
Chapter 5 Notice of Change Chapter 14 Miscellaneous
Chapter 6 Voluntary Reference of Disputes to Arbitration
Chapter 7 Mechanism for Resolution of Industrial Disputes Schedule 1
Matters to be Provided in Standing Orders
under the Code
Chapter 8 Strikes and Lockouts Schedule 2 Unfair Labour Practices
Chapter 9 Lay-off, Retrenchment, and Closure Schedule 3
Conditions of Service for Change of which
Notice is to be Given
BROAD SCHEME OF THE CODE

Occupational Safety, Health & Working
Condition Code 2020
Factories Act, 1948 Mines Act, 1951
Dock Workers ( Safety,
Health, and Welfare Act,
1986
The Building and other
Workers (Regulation of
Employment and Conditions of
Service) Act, 1996
The Plantations Labour
Act, 1951;
The Contract Labour
(Regulation and Abolition)
Act,1970
The Inter-State Migrant
Workmen (Regulation of
Employment and Conditions of
Service) Act, 1979;
The Working Journalist and
other News Paper
Employees(Conditions of
Service and Misc. Provision)
Act, 1955
The Working Journalist
(Fixation of rates of
wages) Act, 1958;
The Motor Transport
Workers Act, 1961;
Sales Promotion
Employees (Condition of
Service) Act, 1976;
The Beedi and Cigar
Workers (Conditions of
Employment) Act, 1966
The Cine Workers and
Cinema Theatre Workers
Act, 1981

 The Occupational Safety, Health and Working Conditions Code 2020 (OSH Code) was one of
the three bills passed in the Lok Sabha related to Labour reforms. It was introduced by the
Ministry of Labour and Employment in the Lok Sabha on September 19, 2020.
 The other two bills passed along with the Occupational Safety, Health and Working Conditions
Code 2020 include:
I. Industrial Relations Code 2020.
II. Social Security Code 2020.
 The OSH Code has subsumed several key pieces of legislation on the working conditions of
labour and consolidated them into one comprehensive act, including, inter alia, the Contract
Labour (Regulation and Abolition) Act, 1970, the Factories Act, 1948, etc.

 There are certain definitions that are important under the Occupational Safety Health and Working Conditions Code 2020, a few of
which have even been amended with reference to the past labour codes:
1) Employee – This has been a constant definition from the code of 2019. “Employee” is a person employed by an establishment on
wages and is required to do any skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, clerical,
or other work.
2) Employer – A person who employs, whether directly or through any person, or on behalf of an establishment is called an
“Employer”. This person/authority has the ultimate control over the establishment.
3) Establishment – An “Establishment” is any place with ten or more workers where any industry, trade, business, manufacturing or
occupation is carried on motor transport undertaking, newspaper establishment, audio-video production, building and other
construction work or plantation with ten or more workers, factory in which ten or more workers are employed, a mine or port or
vicinity of the port where dock work is carried out.
4) Hazardous Process – Any activity in relation to specific industries, where raw/intermediate/finished/bye-products, etc., if not taken
care of, may:
 Cause impairment to the health of the concerned person
 Harm the environment and cause pollution

5) Contract Labour – A worker deemed to be employed in/in connection with an establishment through a contractor without
having the knowledge of the principal employer is called a “Contract Labour” as per OSH Code.
6) Wages – Remuneration like salaries, allowances, or otherwise, expressed in terms of money for the work done by an employee
including the basic pay, dearness allowance, etc. Are called “Wages” as per the OSH Code. This does not include:
 Bonus
 Value of accommodation or light, water, medical attendance
 Employer contribution towards any pension or provident fund
 Conveyance allowance
 Sum paid to the employed person to defray special expenses
 House rent allowance
 Overtime allowance
 Gratuity

☺ The Code expands the definition of a factory as a premise where at least 20 workers work for a process with power
and 40 workers for a process without power
☺ The Code fixes the daily work hour limit to a maximum of eight hours
☺ It defines an inter-state migrant worker as someone who has come on his/her own from one state and received
employment in another state and earns up to Rs.18000 per month
☺ It also empowers women to be employed in all kinds of establishments and at night (between 7 PM and 6 AM)
subject to their consent and safety.
☺ The OSH Code removes the manpower limit on hazardous working conditions and makes the application of the Code
obligatory for contractors recruiting 50 or more workers (earlier it was20)
☺ It ensures that no charge is levied on any employee for maintenance of safety and health at the workplace including
the conduct of medical examination and investigation for the purpose of detecting occupational diseases
☺ The OSH Code provides for the constitution of a National Occupational Safety and Health Advisory Board (National
Advisory Board) by the Central Government, which shall be empowered to advise the Central Government
Salient Features

 It is the right of the employee to ask the employer about the information related to the employee’s health
and safety and enquire about the provision for the protection of the employee’s safety or health in
connection with the work activity in the workplace.
 In case of any threat or apprehension of a serious injury or danger to life, the employee may bring it to
the notice of the employer and the inspection-cum-facilitator.
 In case, as mentioned above, the employer shall immediately raise a complaint against the same, in a
manner prescribed by the Government.
 If the employer is not satisfied with the existence of any imminent danger as apprehended by his/he
employees, he/she can refer the matter to the inspector-cum-facilitator whose decision Government shall
be final.
Right of Employees under The Act

The Central Government has listed down a few key measures and steps which must be taken into consideration
regarding the health and safety of the employee. Discussed below are the same:
♠ Separate washing facility for male and female employees.
♠ Males, Females, and Transgenders must be allocated separate bathing places and locker rooms.
♠ Sitting arrangement for employees working in a standing position.
♠ Proper first aid facilities.
♠ Cleanliness and hygiene must be maintained at the workplace.
♠ Portable drinking water must be made available.
♠ Adequate lighting.
♠ Adequate measures to avoid overcrowding.
♠ The Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code“) received the President’s
assent on September 28, 2020.
Health, Safety and Working Conditions of Employees
under OSH Code

Social Security Code 2020
The EPF and M.P. Act, 1952 The ESIC Act, 1948 The Maternity Benefit Act,1961
The Building and other
Construction Workers Cess Act,
1996
The Payment of Gratuity Act,
1972
The Employees Exchange
(Compulsory Notification of
Vacancies) Act, 1959
The Cine Workers Welfare
Fund Act, 1981
The Unorganized Workers’
Social Security Act, 2008
Employees Compensation Act,
1923

• Definition of social security
• New category of workers added like gig workers,
platform workers
• Definition of interstate migrant workers.
• Definition of wage has been revised
• Renaming the designation of Inspector to
Inspector -cum-Facilitator.
• Introduction of the definition of Audiovisual
production.
• Introduces the definition of aggregator
• Code to expand the sources of funds from
corporate social responsibility
• The special purpose vehicle.
• Registration of all three categories of workers.
• Contribution from an aggregator will be notified
by the government between 1-2% of the annual
turnover.
• The maximum limit of such contribution is fixed
@ 5% of the amount paid or payable
• Introduces the definition of a career center.
Key changes

 The Central Board of Trustees of Employees' Provident Fund
 The Employees' State Insurance Corporation.
 The National Social Security Board for Unorganized Workers
 The State Unorganized Workers' Social Security Board
 The State Building and other Construction Workers' Welfare Boards.
 Any other organization or special purpose vehicle declared to be a social security
organization by the Central Government.
Social Security Organisations

 Employer and employee to contribute 10% of wages payable.
 The employee gets a lump sum amount including self and employer’s contribution with interest on both, on retirement.
 Aadhaar based registration is mandated.
 All establishments having 20 or more workers come under the purview of EPF.
 Covering the category of self-employed.
 Limitation period of five years for initiation and two years for concluding enquiries.
 Increased penalty from RS 10,000to 1,00,000; and imprisonment of one to three years on deduction of employee contribution
from salary and non-depositing.
 Subsequent failure to pay contributions attracts imprisonment of two to five years and a fine of RS 3,00,000.
 Central provident Fund Commissioner (CPFC) can permit voluntary coverage.
 Move in or Move out option based on an agreement between employer and majority of employees. A 60 days time limit not
before five years of such coverage.
 The employer to furnish all statutory returns, and paid all statutory dues a self-certification to that effect along with the
application.
Employees Provident Fund Scheme

 If the employer and majority of employees agree to voluntary registration under the ESI scheme.
 ten or more persons are employed other than a seasonal factory.
 Government can extend it to an establishment that carries on hazardous occupation even if a single employee.
 Available to all 740 districts.
 Also includes gig workers and unorganized workers, plantation workers.
 If an employer fails to contribute then also ESI benefits the employee which ESIC can recover.
 Application to opt-in or opt-out regarding coverage of establishments is to be decided upon by the Director-
General of the Corporation.
 Here too, 60 days time limit is provided for the decision.
 Corporation means Employees State Insurance Corporation (ESIC).
 Employer of a plantation may opt by giving willingness to corp. if the benefits available to employees are better
than what the employer is providing.
Employees State Insurance Scheme

 Permanent employees would be eligible for gratuity after the completion of five years.
 Gratuity shall be payable on the termination of the contract period under fixed-term employment based on
a pro-rata basis.
 A working journalist as defined in The Working Journalists And Other Newspaper Employees (Conditions
Of Service) And Miscellaneous Provisions Act, 1955.
 The threshold Gratuity period for working journalists reduces from five years to three years.
 Where an employer fails to contribute after deducting the employee’s share attracts imprisonment
between one and three years, and a fine of INR 1,00,000
 If an employer fails to give a gratuity to an employee -imprisonment for a term may extend to one year or
with a fine may extend to INR 50,000 or both.
 Compounding of any offense which is punishable with fine only or with imprisonment for a term not
more than one (1) year, and also fine.
 An application for compounding can be made before or after the initiation of prosecution.
Gratuity

 If any person has misused any benefit then the person will be deprived of such benefit.
 The Central Government may by order, defer or reduce employer's contribution, or employee’s
contribution, or both for a period of up to three months at a time, in the event of a pandemic, endemic, or
national disaster
 Establishment registered under any existing Central Labour Laws, not required to obtain registration
under Section 3 of the code.
 Appeal by the employer to EPF Tribunal is not given unless deposited 25% of the amount due with
Social Security Organization concerned -earlier75%.
 Extra expenditure as sickness benefit.
 Employer to maintain registers, records for the number of days/hours of work
 Any dispute for determination of dues from the employer, fixed the limitation period of proceedings and
inquiry to be five years -earlier 3 years.
Gratuity

 Every woman entitled to maternity benefit shall also be entitled to receive a medical bonus of
₹3,500/-
 Whose upper limit can be amended by the Central Government, this upper limit of RS 20000 has
been removed under the code.
 An establishment may avail a common creche facility
 Failure to pay contributions, cess, maternity benefit, compensation, or reduces, dismisses or reduces
in rank a female employee, record, false return, obstruct -imprisonment extending to six months or
fine may extend to INR 50,000 or both.
 Subsequent offense of failure to pay, is punishable with imprisonment of two (2) years which may
extend to five (5) years, and also a fine of INR 3,00,000/
Maternity Benefit

Code on Wages 2019
The Payment of
Wages Act, 1936
The Minimum
Wages Act, 1948
The Payment of
Bonus Act, 1965
The Equal
Remuneration Act,
1976

Definitions of Wages:
• S. 2(y), Code on wages, 2019
• S. 2(zq), Industrial Relations Code, 2020
• S. 2(88), Code of Social Security, 2020
• S. 2(zzj), Occupational Safety, Health, and Working Conditions Code, 2020
Code on Wages 2019

• Govt. Proposes to replace existing definition of basic wages in the employee’s provident
funds and miscellaneous provisions act, 1952 (EPF act) with wages in the code.
• Basic wages - all emoluments earned by an employee on duty or on leave/holiday with
wages in accordance with the terms of the contract of employment.
• Does not include cash value of food concessions, dearness allowance, house-rent
allowance, overtime allowance and any presents by employers.
Code on Wages 2019

Includes Excludes
• All remuneration by way of salaries,
allowance or otherwise
• Basic pay
• Dearness allowance
• Retaining allowance
• Any bonus not part of remuneration
• Value of house accommodation, supply of light, water, medical
attendance, other amenity
• Contribution paid by employer to any pension or PF and interest
accrued upon
• Conveyance allowance or value of any travelling concession
• Sum paid to employed person to defray special expenses by nature of
his employment
• House rent allowance
• Remuneration under an award or settlement by order of court or
tribunal
• overtime allowance
• Commission payable to employee
Code on Wages 2019
- With implementation of code, HRA will not be a part of minimum wages. This will have an implication of the EPF
contribution.
- Provides a limit upto which amount paid under clauses (a)-(i)-not considered as wages. If such payments exceed
50% or other percentage by CG-considered as wages

 69 sections
 Non-discriminatory clause that prohibits an employer from discriminating between wages payable to a male
and a female for the same work.
 Fixing of a ‘floor wage’ by the Union Government. The floor wage -base remuneration- to be complied with by
all states, and remuneration only over and above that ‘floor wage’ can be fixed by the state governments. State
governments must mandatorily revise their minimum wage rates every five years.
 Each state government can fix their own minimum wages.
 The quantum of the penalty varies with nature of the offence. The maximum penalty is imprisonment for 3
months and/ or with a fine of up to INR 1,00,000.
Code on Wages 2019 - Overview

 S. 2 (k) and (l) expanded -“employer” and “employee” - both organized and unorganized sectors.
 The provisions of the Minimum Wages Act and the Payment of Wages Act used to apply only to workers
drawing wages below a particular ceiling and working in scheduled employments only. However, under the
Code, the minimum wages and the payment of wages -all establishments, employees and employers.
 No one single consolidated dispute resolution board or committee that deals with all problems between an
employee and management. Instead, there are multiple -issue-centric in their functioning.
 ‘Inspector-cum-facilitator’ -appointed by the state government. He is deemed a public servant and his
powers include examining any worker of the establishment, eliciting information regarding any person,
confiscating documents of the employer or of other establishments as the state Government directs, and taking
cognizance of offences. Can give advice to employers and workers relating to Code.
Code on Wages 2019 - Overview

• Employee - S.2(k)- skilled, semi-skilled or unskilled, manual, operational, supervisory,
managerial, administrative, technical, clerical work- private/public sector. PBA, 1965- salary not
exceed Rs. 21,000/month.
• Employer - S.2(l)- “managing agent” in Payment of Bonus Rules-substituted by “contractor”.
Adds more accountability on contractors in contract labour.
• Workers - S.2(z)- includes working journalists, sales promotion employees and any person
dismissed, discharged, terminated-industrial dispute. Only mentioned in ERA, 1976.
• Contract labour - S.2(g)- contract labour (regulation and abolition) act, 1970 excluded
permanent/regular employees of contract.
• Industrial dispute - dispute between individual worker and employer added-not part of IDA,
1947.
Key changes in Definitions

A. Code on Wages vis –a– vis repealed Equal Remuneration Act:
 The code has done away with the discrimination on the basis of gender in matters relating to wages
with regard to same work or work of a similar nature. Now there is no discrimination on the basis of
gender as it expands to all the employees. Covers transgenders as well.
Code on Wages 2019

B. Code on Wages Vis –a –Vis repealed Minimum Wages Act:
 The Code of Wages Act is applicable on all the employees including organized and unorganized
sector employees and is not restricted only to the employees of the Scheduled employments as in the
repealed MWA.
 Introduced “Floor Wages” which was not in practice earlier. Central government will set the
national floor rate for wages after taking into account the minimum living standards of workers
varying across geographical areas; where existing minimum wages are higher than the floor wages,
the same shall be retained. State governments will fix the minimum wages for their region which
cannot be lower than the national floor rate for wages.
 Time limit for filling the claims for the dues to be paid to the employees has been extended to 3
years from 6 months in MWA.
Code on Wages 2019

C. Code on Wages Vis– a– Vis repealed Payment of Wages Act:
 The Code protects all the employees without any wage limit including the supervisors and the
managers and is not to restricted only to those employees drawing salary less than 24,000-repealed
Payment of wages Act.
 The time limit for filling the claims for the dues to be paid to the employees -extended to 3 years
from 1 year.
 This new Code grants two days limit to an employer to pay full & final salary to the worker as it
used to be in the repealed PWA on account of dismissal or retrenchment of an employee.
Code on Wages 2019

D. Code on Wages Vis –a –Vis repealed Payment of Bonus Act:
 New Code is same as revoked Payment of Bonus Act - employs 20 or more persons as was the case
in the repealed act.
 New clause disentitles an employee from receiving the bonus on conviction of an employee for
sexual harassment. Earlier it included dismissal from service on the grounds of fraud, riotous or
violent behavior while for theft, misappropriation or sabotage of any property of the establishment
as the reason for disqualification from getting the bonus.
 The time limit for filling the claims for the dues to be paid to the employees has been extended to 3
years from 1 year in the previous act of Payment of Bonus.
Code on Wages 2019

 “Wages”- narrowed down the allowances/benefits that were incorporated in the repealed Acts of Payment
of Wages and Minimum Wages Act, now the term Wages is a mixture of (i) basic pay; (ii) dearness
allowance; and (iii) retaining allowance but excludes many earlier allowances.
 Brought uniformity to “worker” –any person employed in any industry to do any manual, unskilled,
skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied
 Modified ways of conducting the inspection by the inspectors. Earlier, it was the physical inspection, but
now methods of inspection has changed like introduction of Web based electronic inspections and their
jurisdiction has been broadened to help employer for better compliance formation.
 Introduced “occupation”-also applicable to non-profit motive establishments
Changes in new code, 2019

 Basic salary component will be increased, where the provident fund will be calculated based on the basic
salary that will be increased. This implies that the PF for employees would increase and the in-hand
salary will be decreased.
 Employees may have to work for 12 hours/day as 48 hour weekly work is compulsory.
 working 4days/week
 Currently, the complete settlement of salary and dues are done after 45-60 days from an employee's last
working day. Now, full and final settlement of wages and dues paid within 2 days of an employee's last
working day following their resignation, dismissal or removal from employment and services.
 Employees get 3 week-offs, but have to work for not more than 48 hours. Employees who work for 8
hrs/day will get only 1 week off. Those who work for 12hrs/day will get three week-offs. Those who work
9hrs/day will get 2 week-offs. Hence, the offs depend on the work hours respectively.
New Wage Code, 2022

 Proper facilities and security assured to the female forces in an organization.
 Increase in the maximum number of overtime hours from 50 hours to 125 hours.
 Employees would not be able to get more than 50% of their salary in the form of allowance.
 30 holidays/year in Government departments. Defense employees-60 holidays in a year.
 The maternity leaves for female employees will increase to 26 weeks. Also, companies cannot place
them on the night shift without their consent.
 Labor forces will get leave every 180 days instead of the 240 days. But in India, the full and final
payment is credited after 45 days of exiting a company.
New Wage Code, 2022

Labour Codes Overview

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