Aimed at helping investors and accelerating growth, the Government is planning new labour legislation that would merge 44 labour laws under four categories -- wages, social security, industrial safety & welfare, and industrial relations.

1. Salient Features on
All LABOUR CODES
Compiled by
Dr. P.B.S. KUMAR
B,Sc, MA(PM), MA (Ind.Eco.) ,MBA(HR),BGL,DLL,PGDIR&PM ,P.hd (in HR)
Principal Director
KAKINADA HR CONSULTANCY SERVICES
KAKINADA
A.P

2. The Concept
Aimed at helping investors and accelerating
growth, the Government is planning a new
labour legislation that would merge 44 labour
laws under four categories -- wages, social
security, industrial safety & welfare, and
industrial relations.
2Dr. PBS KUMAR

3. Summary of Central Labour
Laws
• Number of Central Labour Laws which
were dealt by the Ministry- 44
• Number of Central Laws Repealed – 12
• Subsumed in 4 Codes- 29
3Dr. PBS KUMAR

4. Rationalization of Sections in Labour Codes
Name of the Code Number of
Acts
subsumed
Sections
in the
existing
Acts
Sections
in
proposed
Code
Code on Wages 4 125 69
Occupational Safety,
Health and Working
Conditions Code
13 622 134
Industrial Relations
Code
3 135 104
Code on Social
Security
9 350 163
TOTAL 29 1232 470
4Dr. PBS KUMAR

5. Status of 4 Labour Codes
• The Code on Wages notified on 08.08.2019. Draft
Rules have been placed on website on 01.11.2019
for public consultations.
• OSH Code Bill, 2019- Introduced in Lok Sabha on
23.07.2019. Referred to Standing Committee on
7.10.2019.
• Industrial Relations Code Bill, 2019- Introduced in
Lok Sabha on 28.11.2019.
• Social Security Code Bill, 2019- Introduced in Lok
Sabha on 11.12.2019.
5Dr. PBS KUMAR

6. Advantages of Codification
• One Registration; One Licence ; One
Return; Minimum Forms
• Uniform definitions
• Reduction in committees
• Web based, Jurisdiction free Inspection
Introduction of technology
• Reduction in compliance costs
• Reduction in Litigation
6Dr. PBS KUMAR

7. Salient Features of the Code on Wages, 2019
• Subsumes- The Minimum Wages Act, 1948; The
Payment of Wages Act, 1936; The Payment of Bonus
Act, 1965 and The Equal Remuneration Act, 1976.
• Definition of wage simplified. If payments made by the
employer to the employee, exceeds 50% of the all
wages (basic pay, DA, retaining allowance) the excess
shall added to the wages. (Section 2(y)
• In case of plantation worker, value of remuneration in
kind cannot exceed 15% of the total wages.
• Minimum wages and timely payment of wages extended
to all including unorganized sector (Section 5)
7Dr. PBS KUMAR

8. • Central Government to notify Floor Wages based on minimum living
conditions. No state to fix minimum wages below the floor wage.
(Section 9)
• Currently, floor wages are fixed by Central Government through
advisory. Since 2017, applicable floor wages are Rs. 176/- per day.
• Revision of minimum wages ordinarily at an interval of 5 years.
• Reduction of number of minimum wages. Either or both of the
following factors would determine minimum wage fixation (Section 6)
– Skills – unskilled, semi-skilled, skilled and highly skilled
– Geographical region
Salient Features of the Code on Wages, 2019
8Dr. PBS KUMAR

9. Salient features of the Code on Wages, 2019
• Enables payment of wages through cheque or digital or
electronic mode (Section 15)
• Tripartite Advisory Boards at Central and State level to
advise Government on matters of wage (Section 42)
• Transparent web based inspection; provision for
jurisdiction free inspection; calling of information
electronically (Section 50 & 51)
9Dr. PBS KUMAR

10. Way Forward for Central and State
Governments
• Formulation of Rules - The Central Government has
prepared draft rules under the Code on Wages. All State
Governments are also requested to take steps to
formulate rules.
• Payment of wages by digital mode - All State
Governments may notify payment of wages through digital
means.
• Fixation of minimum wages - Spadework for fixation of
minimum wages may be commenced. Ideally there
should be only four rates of minimum wage based on skill
- (unskilled, semi-skilled, skilled and highly skilled). For
geographical area, the unit can be entire State as in case
of MP and Bihar.
10Dr. PBS KUMAR

11. Occupational Safety Health and Working
Conditions Code
• Subsumes 13 Labour Acts relating to :
– 7 Sectors: Factories , Mines, Dock, Construction Workers,
Plantation, Motor Transport & Beedi and Cigar
– 2 types of workers: Contract Labour & Inter- State Migrant
Workers
• Code envisages:
– Occupational Safety standards for different sectors
– Health and Working Conditions : ventilation, drinking water, etc.
– Hours of Work , Overtime hours, Leave, Holiday, etc.
– Welfare provisions : canteen, crèche, rest rooms, first aid, etc.
– Duties of employers, employees, manufacturers, etc.
– Registration of establishments including deemed registration,
– Licence for contract worker, Factories, Beedi & Cigar
11Dr. PBS KUMAR

12. Change in Applicability Threshold
S.NO Sector Existing
No of workers
Proposed
No of workers
1 Mines 01 01
2 Dock 01 01
3 Plantation 15 10
4 BOCW 10 10
5 Motor Transport 05 10
6 ISMW 05 10
7 Contract Labour 20 10
8 Factory 10 10
12Dr. PBS KUMAR

13. Salient Features of the Code: Workers
• Applicable to all establishments employing 10 or more
workers except for mine and dock (even on 1 worker)
(section 2(u)).
• Appointment letters to every employee- promotes
formalization (section 6 (1)(f)).
• Employer to provide free of cost annual health check-up for
employees above prescribed age, tests, employees and
class of establishments by appropriate Government
(section 6 (1) (c)).
• Constitution of a bi-partite Safety Committee (workers and
employers) in establishment by appropriate Government
(section 22 (1)).
13Dr. PBS KUMAR

14. Salient Features of the Code: Workers Contd….
• Definition of audio visual worker and working
journalist modified to cover digital/audio-visual
workers and journalists working in electronic media
(sec. 2(e) and 2(zzf).
• Definition of inter-state migrant worker modified to
include migrant workers employed directly by the
employer besides the migrant workers employed
through a contractor (section 2(zd)(i)).
• Definition of a family extended to include dependent
grand-parents of the worker (section 2(x)(iii)).
• A part of the penalty imposed by the court on death or
serious bodily injury to be given to the victim or the
legal heirs of the victim (section 96 (1)(b)(proviso).
14Dr. PBS KUMAR

15. Salient Features of the Code:
Employers
• Easy Compliance
– One Registration in place of 6
– One License in place of 4
– One Return in place of 21
• Enabling provision permitting Women to work at
night on fulfilling conditions relating to safety,
working hours, holidays, transport, consent of
worker, etc (section 43)
• Limit on Overtime hours to be prescribed by the
appropriate government in place of existing 50
hours in a quarter (section 25, 27 & 86)
15Dr. PBS KUMAR

16. Salient Features of the Code:
Employers Contd..
•Welfare facilities in Plantation either through
resources of owner or through any scheme of the
Central / State Govt. (section 24(4)).
• A single all India license with 5 years validity for
hiring contract worker introduced, de-linking from
the present system of obtaining license for each
“work order” A risk- based, randomly allocated
inspection through centralised computer to bring
transparency (section 48 (3)).
•Third party audit introduced (section 37)
16Dr. PBS KUMAR

17. Industrial Relations Code, 2019
• Subsumes 3 Central Labour Acts
• Number of sections reduced from 135 to 104
 The Industrial Disputes Act, 1947
– Provides for mechanism & machinery for settlement of disputes
through conciliation, Industrial Tribunals; provisions relating to
strike, compensation/ notice & permission before retrenchment,
closure and layoff.
 The Trade Unions Act, 1926
– Deals with registration of trade unions, their rights and obligations.
 The Industrial Employment (Standing Orders) Act, 1946
– Model standing order for establishments having 100 employees
17Dr. PBS KUMAR

18. Salient features of IR Code
Retrenchment/Layoff / Closure Related
• Present: Threshold of 100 workers for seeking
permission from appropriate Government before lay
off, retrenchment and closure (factory, plantation &
Mines)
– 9 State Governments have enhanced threshold from 100
to 300 by amending Industrial Dispute Act.
• Proposed: Threshold of 100 workers or any
number notified by the appropriate government
• Enhancement of threshold from 100 to 300 as already done
by State Governments is protected by a Proviso in the Code.
18Dr. PBS KUMAR

19. Legislative Reforms that can be undertaken by the
States pending approval of IR Code
Reform States that
have
Implemented
How other
States can now
enhance
threshold
Position after IR Code
/overall codification
1 Increase in
threshold for
seeking
permission for
retrenchment,
layoff and
closure (100
to 300) –
Promotes
easy exit and
reduces
financial
burden
Andhra
Pradesh,
Haryana,
MP, Assam,
Maharashtr
a (only for
closure),
Rajasthan,
UP,
Jharkhand
and
Uttrakhand
Requires
change in ID
Act. The
concerned State
Govt. to
formulate a Bill
and get it
passed by its
Assembly.
Thereafter, seek
Presidential
Assent.
After coming into force of IR
Code, there would be no
requirement of amendment
in the IR Code for increasing
or decreasing the threshold
for the purpose of
retrenchment, lay off and
closure of Company.
The willing appropriate
Government can increase or
decrease the threshold
which is at present 100
employees to any other
higher or lower number
through a notification only.19
Dr. PBS KUMAR

20. Salient Features of the IR Code, 2019-
Fixed Term Employment
• Present: Fixed Term Employment in the Schedule
of Industrial Employment Standing Orders Act.
– Applicable for establishments with 100 or more workers
– Applicability is by notification by appropriate Government
(Central Govt. and 7 State Govt. have notified)
• Proposed: Fixed Term Employment defined in the
main Code itself
― Universal Applicability for all establishments
― No requirement of separate notification by Appropriate
Government
20Dr. PBS KUMAR

21. Salient features of IR Code
• Present: Retrenchment compensation is
15 days wage per completed year of
service
• Proposed: Retrenchment compensation of
15 days wage per completed year or any
number of days as notified by the
Appropriate Government
21Dr. PBS KUMAR

22. • New Provision
• To be maintained by appropriate Government
• One time Contribution of 15 days’ wages for each
retrenched employee to be credited by employer to
the Fund.
• Thereafter, the amount to be paid from the Fund to
retrenched employee within 45 days.
Salient Features of the IR Code, 2019
Re-Skilling Fund
22Dr. PBS KUMAR

23. Salient Features of the IR Code, 2019
(Related to Trade Union)
• New Provision
• Provision of negotiation with management at unit
level by Recognition of Negotiating Union/ Council:
― Negotiating Union if one trade union has 75% members,
otherwise;
― Negotiating Council (representatives of trade unions): One
member in the Council for each trade union for every 10%
Members
• Advantage: A forum for systematic negotiation at
establishment level. Presently all registered trade
unions can negotiate with management
23Dr. PBS KUMAR

24. Salient Features of the IR Code, 2019
(Related to Strike)
• Present: 14 days prior notice before going on strike/
lockout for public utility services only
• Proposed: Notice period of 14 days before going on
strikes/ lockouts extended to all establishments.
• Definition of strike modified to include concerted mass
casual leave by 50% or more workers on a day:
mass casual leave would now be treated as strike.
• Advantage
• Flash strikes would be averted
• More time for conciliation
• Avoidance of loss of production
24Dr. PBS KUMAR

25. Salient Features of the IR Code, 2019
• Definition of Industry expanded in conformity with SC
Judgment
• Present: ‘Industry’ includes any business, trade,
manufacture, employment, handicrafts or industrial
occupation of workmen
• Proposed: New Definition –
Any systematic activity carried on by cooperation
between an employer and worker but excludes –
• institutions owned or managed by organisations
wholly or substantially engaged in any charitable,
social or philanthropic service;
• domestic service,
• sovereign functions and
• any other activity as may be notified by the Central
Government.
25Dr. PBS KUMAR

26. Salient Features of the IR Code, 2019
Definition of Worker modified
• Present: ‘Worker’ includes person in
supervisory capacity getting salary up to
Rs. 10000/
• Proposed: ‘Worker’ includes person in
supervisory capacity getting salary up to
Rs. 15000/ or an amount as notified by
the Central Government
26Dr. PBS KUMAR

27. Social Security Code, 2019
Subsumes 9 Central Labour Acts :
 The Employees’ Compensation Act, 1923
 The Employees’ State Insurance Act, 1948
 The Employees Provident Fund & Misc. Provisions Act,
1952
 The Employment Exchanges (Compulsory Notification of
Vacancies) Act, 1959
 The Maternity Benefit Act, 1961
 The Payment of Gratuity Act, 1972
 The Cine Workers Welfare Fund Act, 1981
 The Building and Other Construction Workers Welfare Cess
Act, 1996
 The Unorganised Workers’ Social Security Act, 2008
27Dr. PBS KUMAR

28. Salient features of Social Security Code
Preliminary/Definition
• Present: Definition of wage is different in
ESIC and EPFO.
• Proposed: Definition of wage to include all
remuneration including basic pay, dearness
allowance, and retaining allowance, if any. Cap
of 50% all remuneration provided for
allowances. If allowances exceed 50% or such
percent as may be notified, then it will be added
back to the wages.
• Impact: Simplification of definition of Wages.
28Dr. PBS KUMAR

29. Salient features of Social Security Code
Preliminary/Definition
 New Provision:
• Definition of aggregator (digital intermediary), gig
worker and platform worker included.
• The definitions of employer, employee,
establishment, factory etc. are uniform.
 Entrustment of additional functions - Enabling
provision made for administration of an Act (PF Act,
1925), Scheme (PM-SYM), programme by EPFO
and ESIC provided Central Government bears the
expenditure.
29Dr. PBS KUMAR

30. Salient Features of the Social Security Code, 2019
Employees Provident Fund
 Present: EPF&MP Schedule -1 to the
EPF&MP Act, 1952 includes 197 industries, on
which this Act applies.
 Proposed: Schedule has been removed.
Now, it applies on all establishments having more
than 20 employees.
 Impact: Reduction in litigation as applicability
issue resolved.
30Dr. PBS KUMAR

31. Salient Features of the Social Security Code, 2019
Employees Provident Fund
 Present: No limitation period exists in commencing
inquiry to decide on applicability of the Act and to
recover amount due towards EPF, EPS and Employees
Deposit Linked Insurance (EDLI) .
 Proposed: Limitation of 5 years introduced. No
case which is older than 5 years can be opened.
 Impact:
 ESIC also has limitation period of 5 years
 Predictable policy regime.
31Dr. PBS KUMAR

32. Salient Features of the Social Security Code,
2019
Employees Provident Fund
New provision
 Enabling provision introduced to specify differential rates
of employees’ contribution for class of employees as the
Central Government may notify
Impact
 Increase in take home salary of employees
and boost consumption.
New Provision
Aadhar seeding made mandatory to register and
avail benefits under social security Code. 32Dr. PBS KUMAR

33. Salient Feature of the Social Security Code,
2019
Gratuity
New provisions
 Proportionate gratuity to be paid to a fixed
term employee.
 Option to obtain a compulsory insurance
for employer’s liability for payment
towards gratuity from any insurance
company regulated by Insurance
Regulatory and Development Authority
(IRDA) as against at present LIC only.
33Dr. PBS KUMAR

34. Building and Other Construction
Workers Welfare Cess
Present: Assessment of cess on the basis
of cost of construction of building and
other construction work by authorised
officer of the State Government on case to
case basis.
Proposed: Self-assessment of cess on
the basis of cost of construction of building
etc., filing of return.
34Dr. PBS KUMAR

35.  Present: Registration of unorganized worker
shall be through an application to be made to
district administration. Mandatory issuance of
identity card.
 Proposed:
• A person shall submit self declaration
electronically or otherwise in the form, and to
the authority prescribed by the appropriate
Govt.
• Every registered unorganized worker will be
assigned a unique number based on Aadhar.
Unorganised Workers’ Social Security
35Dr. PBS KUMAR

36. Advantage to the Workers
• Inclusion of new form of workers (gig
workers, platform worker), audio-visual
worker.
• Enabling provision for setting up of a
social security fund for formulation of
schemes for unorganised sector workers.
• Accidents while commuting (travelling)
included under Employees
Compensation Act.
36Dr. PBS KUMAR

37. Advantage to the Workers
New Provisions
• Extension of coverage of ESIC
– ESIC coverage extended to entire India
subject to threshold of 10 employees
(contribution to be collected after
arrangements for services are made by ESIC)
– Voluntary membership introduced in ESIC if
employer and employee agrees where
threshold is less than 10.
– No minimum threshold for workers engaged in
hazardous or life threatening occupations.
37Dr. PBS KUMAR

38. THANK YOU
pbskumar2010@gmail.com
38Dr. PBS KUMAR