Labour Code 2020 VS Earlier Laws
Introduction
Labour reforms when implemented would make Indian economy more productive and competitive.Now the 14 Central Acts which had 1458 sections, requiring 937 compliances have been consolidated into four Codes with just 480 sections.Also,when implemented,the industries would need to file just one return for all four Codes.The ultimate goal of the government is to see India in top 10 nations in ease of doing business index of World Bank with completion of long-pending labour reforms.These reforms could start a chain-reaction in the economy.With ease of compliance would come increased formality, which will lead to proliferation of larger enterprises and more organized jobs,which, in turn, will ensure that more firms and workers’pay taxes, increasing government revenues.
- THE COMMON FEATURES IN ALL THE 4 CODES:
- 1. WAGES : To bring in consistency, the Codes have provided for a common definition of the term ‘wages’ and includes all remuneration including house rent allowance, conveyance and other allowances capable of being expressed in monetary term.
- 2. INSPECTOR-CUM-FACILITATOR : The Codes provide for the appointment of an Inspector-cum-Facilitator, whose role is enlarged to encompass not just inspection but also to advise the employers and workers with regard to the various compliances prescribed under the Codes. Inspection will be done based on an inspection scheme which will include a web-based inspection schedule. The inspection schemes will be decided by the Central government.
- 3. COMPOUNDING OF FIRST OFFENCE : Unlike the current legislations, the Codes permit compounding of the first offence committed under the Code by paying 50% of the maximum fine provided for such offence.However, if the violation of a similar nature is repeated within a period of 5 years from the date on which the first violation was committed, the subsequent offence cannot be compounded. For further detail kindly check the Codes.
CODE ON WAGES, 2019
| SUBJECT MATTER | CODE ON WAGES | EARLIER PROVISIONS |
| APPLICABILITY UNDER MINIMUM WAGES ACT, 1948 | Applicable to all employees including organized and unorganized sector. | Applicable only on scheduled employments under Minimum Wages Act, 1948. |
| FIXATION OF FLOOR WAGES | The Central Govt will set a floor minimum wage and may set different minimum wages for different States and regions. | No provision to fix floor wages under Minimum Wages Act, 1948. |
| TIME LIMIT FOR CLAIM FOR WAGES | Claim could be made within 3 years | Any claim for wages could be made within 6 months under Minimum Wages Act, 1948. |
| APPLICABILITY TO EMPLOYEES UNDER PAYMENT OF WAGES ACT, 1936 | All employees are protected without any wage limit including supervisor and managers. | Applied to those employees drawing less than Rs.24,000/-for filing claim under Payment of Wages Act, 1936 |
| ACCOUNTING YEAR | Only year commencing with 01st April and ending on 31st March. No change of above accounting year permitted | Not necessarily one starting on 01st April and ending on 31st March under Payment of Bonus Act, 1965. It could be changed by the employer with permission of prescribed authority. It could be more than 12 months also. |
| DISQUALIFICATION FOR BONUS | On dismissal misconducts i.e.,fraud, riotous & disorderly behaviour, theft and misappropriation as provided in Payment of Bonus Act, 1965. Additionally, disqualification on conviction for sexual harassment | On dismissal misconducts i.e.,fraud, riotous & disorderly behaviour, theft and misappropriation under Payment of Bonus Act, 1965 |
| SUBJECT MATTER | CODE ON WAGES | EARLIER PROVISIONS |
| MODE OF PAYMENT | To be credited in the bank account of the employee. | By cash only under Payment of Bonus Act, 1965 |
| BONUS WHEN DISPUTE FOR HIGHER BONUS IS REFERRED FOR ADJUDICATION | Employer liable bonus @8.33% when a dispute is referred to Tribunal in a dispute for payment of higher bonus | No such provision under Payment of Bonus Act, 1965 |
| GENDER DISCRIMINATION IN FIXATION OF WAGES | Prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature. Work of similar nature is defined as work for which the skill, effort, experience, and responsibility required are the same | Prohibited gender discrimination in wage payment under Equal Remuneration Act, 1976 |
| GENDER DISCRIMINATION IN RECRUITMENT | No reference prohibiting gender discrimination provided in code as provided in Equal Remuneration Act, 1976. | Prohibits gender discrimination in conditions of service subsequent to recruitment such as training, transfers and promotions. |
| TERRITORIAL JURISDICTION FOR INSPECTOR CUM FACILITATOR | Not provided.Restricted to establishments assigned by appropriate government. | Appointed area wise |
| REGISTERS & RETURNS | Only two registers are required to be maintained. Only one return to be filed. | Over 10 Registers and 4 returns. |
CODE ON SOCIAL SECURITY, 2020
| SUBJECT MATTER | CODE ON SOCIAL SECURITY | EARLIER PROVISIONS |
| NATIONAL SOCIAL SECURITY BOARD AND STATE UNORGANISED WORKERS’ BOARD | To be constituted comprising of 43 members. | To be constituted comprising of 36 members under Unorganised Workers Social Security Act, 2008. |
| APPEAL TO TRIBUNAL | Appeal allowed by Tribunal if 25%of dues are deposited as determined by officer. | Appeal allowed by Tribunal if 75%of dues are deposited as determined by officer. |
| PRESUMPTION AS TO ACCIDENT ARISING IN COURSE OF EMPLOYMENT | a) Protecting other person who could possibly be injured in an accident b) travelling by any vehicle as a passenger with permission of employer from the place of work | Partly existed indifferent section |
| CORPORATION’S (ESI) RIGHTS WHEN AN EMPLOYER FAILS TO REGISTER, ETC | Corporation can recover capitalised value of benefit paid to employee. | Corporation can recover benefit paid or twice of contribution employer failed to pay (WIH) |
| SCHEMES FOR UNORGANISED WORKERS, GIG WORKERS AND PLATFORM WORKERS | Coverage for unorganized, gig workers & platform workers along with their family members under ESI benefits against contributions paid | Did not exist |
| HELPLINE, FACILITATION CENTRE, ETC., FOR UNORGANISED WORKERS, GIG WORKERS AND PLATFORM WORKERS | Appropriate government provide toll free call centre for helpline or facilitation centres for unorganized, gig and platform workers | Did not exist |
| APPOINTMENT OF INSPECTOR CUM-FACILITATORS AND THEIR POWERS | Besides inspections they will advise the employer and employees for compliance of the Code | Only Inspectors for inspect the establishment |
| SCHEMES FOR GIG WORKERS AND PLATFORM WORKERS | Central government to frame rules for gig and platform workers relating to- (i)Life and disability cover (ii)Accident insurance (iii)Health and maternity benefits (iv)Old age protection (v)Crèche Any other benefit as may be determined by the Central Government for their welfare to be funded by contributions towards social security fund and also a board will be constituted | Did not exist |
| ASSESSMENT AND DETERMINATION OF DUES FROM EMPLOYER | Enquiry by provident fund authority shall not be initiated after expiry of period of 5 years | No limitation prescribed for enquiry under section 7A of EPF & MP Act. |
| ENHANCED PUNISH IN CERTAIN CASES AFTER PREVIOUS CONVICTION | Including enhanced punishment for subsequent offence | Did not exist |
| POWER TO DEFER OR REDUCE THE STATUTORY CONTRIBUTIONS | Central govt. may defer for reduced employer/employees’ contributions for ESI, provident fund for a period of 3 month in the event of pandemic or natural disaster. | Did not exist |
| MISUSE OF BENEFITS | Any establishment or other person misusing benefits under the Code could be deprived from any benefit by the government | Existed in different manner |
| REPORTING OF VACANCIES TO CAREER CENTRES AND EXCLUSIONS FROM APPLICATION OF THIS CHAPTER | Before filling up vacancies in any employment, reporting to career centres shall be made by the establishments. Reporting is not required in below cases: (i)employment in agriculture (ii)domestic service (iii)for duration of 90 days (iv)in any establishment with less than 20 employees employment connected with the staff of Parliament or State Legislature. | Existed in different in the Employment Exchanges (CNV) Act, 1959 |
CODE ON INDUSTRIAL RELATIONS, 2020
| SUBJECT MATTER | CODE ON INDUSTRIAL RELATIONS | EARLIER LAW |
| INDUSTRY | Exclusions from the definition of ‘industry’– (i)Institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service; or (ii)Any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defense research, atomic energy and space; or (iii)Any domestic service; or (iv)Any other activity as may be notified by the Central Government. | Did not exclude except domestic service that too by judicial interpretations |
| FIXED TERM EMPLOYMENT | Fixed term employment will be eligible to all statutory benefits including gratuity which will be available to him even for serving for one year. | Did not exist. |
| RETRENCHMENT | Excludes termination of service of a worker as a result of completion of tenure of fixed term employment | Specific proviso did not exist. |
| EMPLOYEE | “Employee” definition has been introduced in the Industrial Relations Code, 2020. Covers any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward. | Never existed except‘workman’ which has not been incorporated in the Code. |
| WORKER | Includes working journalists and sales promotion employees | Only ‘workman’ was defined under Industrial Disputes Act whereas in other relevant Acts reference was made to an ‘employee’ |
| NEGOTIATING UNION OR NEGOTIATING COUNCIL | It has plugged loophole: exploiting the multiplicity of unions in an establishment/ organization by introducing concept negotiating union or negotiating council. | Did not exist |
| TRADE UNION FORUM FOR APPEAL | Appeal against non-registration or cancellation of registration lies only before Tribunal | It lies before High Court. |
| INDUSTRIAL TRIBUNAL | Would consist of two members to be appointed by the appropriate Government out of whom one shall be a Judicial Member and the other, an Administrative Member | Only single member was consisted in the Industrial Tribunal |
| RE-EMPLOYMENT OF RETRENCHED WORKER | Re-employment of –within a period of one year only. | No such period was prescribed |
| FLASH STRIKE | Completely prohibited. | No such prohibition |
| PROHIBITION OF STRIKE IN LOCKOUT | Strikers required to give a notice at least 14 days in advance to the employers if they wanted to go on strike. Such notice valid up to 60 days. Strike prohibited during pendency of proceedings before tribunals or arbitrator. | Only in public utility services 14 days’ notice was to be given. |
| WORKERS RESKILLING FUND | Consisted of the contributions of the employer of an industrial establishment an amount equal to fifteen days wages last drawn by the worker immediately before the retrenchment, or such other number of days as may be notified by the Central Government, for every retrenched worker in case of retrenchment only. | Did not exist. |
| PRIOR PERMISSION FOR LAY OFF,RETRENCHMENT AND CLOSURE of INDUSTRIAL ESTABLISHMENT | Applies to an establishment(not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than three hundred workers. | Applied for industrial establishment where 100 or more workers are employed. |
| COMPOSITION OF OFFENCES | Could be resolved for a sum fora sum of 50% of the maximum fine provided for such offence punishable with fine only and for a sum of seventy-five per cent provided for such offence punishable with imprisonment for a term which is not more than one year or with fine. | Did not exist. |
CODE ON OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE(OSHWC), 2020
| SUBJECT MATTER | CODE ON OSHWC | EARLIER LAW |
| REGISTRATION | Every employer of any establishment to apply for registration electronically. | Separate registration was required under each different Act. |
| APPOINTMENT LETTER | Appointment letter to be issued to every employee | Did not exist |
| NOTICES OF CERTAIN ACCIDENT, DANGEROUS OCCURRENCE AND DISEASES | Notices to the authorities and for diseases as specified under Third Schedule of the Code. | Existed in different forms. |
| RIGHTS OF EMPLOYEE(Sec-14) | Every employee shall have right to obtain from employer information related to employee’s health and safety and report to Safety Committee also | No such provision exists |
| NATIONAL OCCUPATIONAL SAFETY AND HEALTH ADVISORY BOARD | Central government to constitute the national occupational safety and health advisory board | Not exists |
| WELFARE OFFICER | On 250 workers in factory, mine, plantation | It is 500 workers in a factory |
| SAFETY COMMITTEE AND SAFETY OFFICER | •On 500 workers in a factory. •On 250 workers inhazardous process •On250 workers in buildingor other construction •On 100 workers in a mine | When there are 1000 workers. |
| WELFARE FACILITY IN THE ESTABLISHMENT | Employer responsible to provide and maintain in his establishment such welfare facilities for the employees as may be prescribed by the Central government | Exists. |
| DAILY AND WEEKLY HOURS OF WORK | 8 hours in a day and 48 hours in a week. For journalist maximum 144 hours during period of 4 consecutive weeks and not less than 24 consecutive hours during 7 consecutive days. Specific provision for working journalist and sales promotion employer pertaining to holidays,casual leave and other kinds of leave. | Not more than 48 hours in a week. Does not exist. Does not exist. |
| OVERTIME WORKING | Employer can take overtime work with consent of the worker | No such provision exists |
| NOTICE OF PERIODS OF WORK | Display of notice about period of work every day | Exists in different form |
| REGISTERS AND RECORDS | Registers and records to be maintained by employer | Existed but not in one but multiple registers. |
| SPECIAL POWERS OF INSPECTOR-CUM FACILITATORS | Steps to be taken apprehending serious hazardor imminent danger in a factory or mine. | Exists in different form |
| ENCASHMENT OF LEAVE | Worker entitled to encash leave above ceiling as prescribed. | No such provision exists |
| EMPLOYMENT OF WOMEN DURING NIGHT SHIFT | Employer can employ women employee between 7 p.m. and 6 a.m.with her consent, subject to conditions on safety, holidays and working hours. | No such provision exists |
| CONTRACT LABOUR | Licence for engaging contract labour can be obtained for working in more than one State, or for whole of India, valid for a period of five years. | No such provision exists. Validity of licence is twelve months |
| NO RECOVERY FROM CONTRACT LABOUR | Contractor shall not charge, directly or indirectly,whole or in part, any fee or commission from contract labour | No such provision exists. |
| WELFARE FACILITIES TO CONTRACT LABOUR | Welfare facilities to contract labour to be provided by the Principal Employer | Contractor is responsible to provide welfare facilities to his contract labour |
| CONTRACT LABOUR INCORE ACTIVITY | Permitted under certain condition | Existed unless prohibited by government |
| CODE NOT TO APPLY IN CERTAIN CASES | Excavation in mine being made for prospecting purposes only and not for the purpose of obtaining minerals for use or sale subject to the conditions specified etc | Did not exist in this form. |
| EXEMPTION FROM PROVISION REGARDING EMPLOYMENT | On breakdown of machinery on plant and equipment workers to be exempted from work | Did not exist in this format |
| EMPLOYMENT OF PERSONS BELOW EIGHTEEN YEARS OF AGE | Relates to the employment of persons below eighteen years of age. It provides that no person below eighteen years of age shall be allowed to work in any mine or part thereof but in case of apprentices and other trainees, such age limit is not below sixteen years | Existed in different format |
| EMPLOYMENT OF AUDIO-VISUAL WORKER | Employment with written agreement in prescribed form and registered with competent authority. | No such provision exists. |
| OFFENCES AND PENALTIES | Enhanced fines and imprisonment terms for different contraventions | Lesser Fines and imprisonment Period |
R V K S AND ASSOCIATES CHARTERED ACCOUNTANTS
Offices at:
Chennai – Bengaluru – Hyderabad – Mumbai – Vijayawada
This information provided in this article is purely for educational & learning purpose. The viewers to take appropriate professional advice before taking any implementation based on the given content.
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