New Labour Codes, 2020

1. Labour code on 2. Labour Code on 3. Labour Code on 4. Labour Code on social

Wages Occupational Safety, Health Industrial Relations security
and Working Conditions

Minimum Wages Employees’ Provident

Act, Trade Unions Act,
Fund and Miscellaneous
1926,
• Payment of Factories Act, Provisions Act,
Wages Act,
• Payment of Bonus Industrial Employment Employees’ State
Act, (Standing Orders) Act, Insurance Corporation
• Equal Mines Act 1946, and Act,
Remuneration
Act.
Industrial Disputes Act,
Maternity Benefits Act,
Dock Workers (Safety, Health 1947.
and Welfare) Act.

Building and Other Construction

Workers Act and the Employees’
Compensation Act
 Common Features of 2020 Labour Codes
Central government will continue to be the appropriate government for a central
Appropriate government
PSU even if the holding of the central government in that PSU becomes less than
for Central PSUs
50% post the commencement of the Bills.
Appropriate government Apart from railways, mines, telecom, and banking. The 2020 Bills add that the
for certain specified central government will also be the appropriate government for any “Controlled
industries: Industry”

Controlled Industry- In the Bills on Occupational Safety and Industrial Relations) as an industry on which
the control of the Union has been declared by any Central Act in public interest.
Provides the government with the power to exempt any new industrial
Power to exempt
establishment or class of establishment from any or all of its provisions if it is in
establishments
public interest.
• The 2020 Bill on Occupational Safety also gives the appropriate government the power to exempt any
establishment for a period to be specified in the notification.
• Further, it enables the state government to exempt any new factory from its provision in the interest of
creating more economic activity and employment.
• Presently, the Factories Act, 1948 permitted exemptions from its provisions only in cases of public emergency,
and limited such exemption to three months.
01. Code on Industrial Relations, 2020
‘Worker’
• Any person who work for hire or reward. It excludes persons employed in a managerial or
administrative capacity, or in a supervisory capacity with wages exceeding Rs 18,000.
• However, it does not define the terms ‘manager’ or ‘supervisor’ in this context.
Exemption
• The appropriate government may exempt any new industrial establishment or class of
establishments from the provisions of the Code in public interest.
Standing Orders
• Applicability of standing orders: All industrial establishment with 300 workers or more must prepare standing
orders on the matters listed in a Schedule to the Code.
• These matters relate to: (i) classification of workers, (ii) manner of informing workers about work hours, holidays,
paydays, and wage rates, (iii) termination of employment, and (iv) grievance redressal mechanisms for workers.
• Powers to the central government to revise the threshold: The 2020 Bill removes this provision that the central
government may make the provisions related to standing orders applicable to establishments with less than 100
workers through a notification.
• Change in employee strength: Removes the earlier requirement that once an establishment is covered under the
provisions related to standing orders, these provisions will continue to apply even if its employee strength reduces
below the threshold (100 workers) at any time thereafter.
Closure, lay-off and retrenchment

• Prior permission of the government: The 2020 Bill

provides that prior permission will be required for
establishments with at least 300 workers (earlier it was
100 workers)from government before closure, lay-off,
or retrenchment.
• Powers to the central government to revise the
threshold: Empowered the government to only
increase the threshold for the establishments to seek
prior permission before closure, lay-off or
retrenchment.
Negotiating Union and Council

Sole If there were more than one registered trade union of

workers functioning in an establishment, the trade union
Negotiating having more than 51% of the workers as members
Union: would be recognised as the sole negotiating union.

In case no trade union is eligible as sole negotiating

Negotiation union, a negotiating council will be formed consisting of
Council: representatives of unions that have at least 20% of the
workers as members.

Note that trade unions must have membership of at least 10% or

workers or 100 workers, whichever is lesser, to be registered.
New provision under the Bill
Disputes relating to termination of individual worker:

• The 2020 Bill classifies any dispute in relation to discharge, dismissal,

retrenchment, or otherwise termination of the services of an individual
worker to be an industrial dispute.
• The worker may apply to the Industrial Tribunal for adjudication of the
dispute.
• The worker may apply to the Tribunal 45 days after the application for
the conciliation of the dispute was made.
Strikes and lock-outs may become difficult for all establishments

• The 2020 Bill requires all persons to give a prior notice of 14 days before a strike or lock-
out. This notice is valid for a maximum of 60 days.
• The Bill also prohibits strikes and lock-outs:
(i) during and up to seven days after a conciliation proceeding, and
(ii) during and up to sixty days after proceedings before a Industrial tribunal.

The Industrial Disputes Act, 1947 contains similar provisions but only for
public utility services.

• A public utility service includes railways, airlines, and establishments that provide water,
electricity, and telephone service.
Power to government to modify or reject tribunal
awards
• Constitution of Industrial Tribunals and a National Industrial Tribunal to decide disputes under
the Bill.
• The awards passed by a Tribunal will be enforceable on the expiry of 30 days.
• However, the government can defer the enforcement of the award in certain circumstances on
public grounds affecting national economy or social justice.

These circumstances are when:

• (i) the central or state government is a party to the dispute in appeal, or
• (ii) the award has been given by a National Tribunal.

The appropriate government can also make an order rejecting or modifying the award. The
notification and the order will be tabled in the legislature.
Provisions on fixed term employment

Fixed term employment

• Refers to workers employed for a fixed duration based on a contract signed between the
worker and the employer.

Positive aspect

• Fixed term employment may allow employers the flexibility to hire workers for a fixed
duration and for work that may not be permanent in nature.
• Fixed term contracts are negotiated directly between the employer and employee and
reduce the role of a middleman such as an agency or contractor.
• They may also benefit the worker since the Code entitles fixed term employees to the same
benefits (such as medical insurance and pension) and conditions of work as are available to
permanent employees.
• This could help improve the conditions of temporary workers in comparison with contract
workers who may not be provided with such benefits.
 Negative aspect
• Unequal bargaining powers between the worker and employer could affect the rights
of such workers since the power to renew such contracts lies with the employer.
• job insecurity for the employee and may deter him from raising issues about unfair
work practices, such as extended work hours, or denial of wages or leaves.

The Contract Labour (Regulation and Abolition) Act, 1970 the government may
prohibit employment of contract labour in some cases including where:
• (i) the work is of a perennial nature, or
• (ii) the work performed by contract workers is necessary for the business carried out
by the establishment, or
• (iii) the same work is carried out by regular workmen in the establishment.
The 2nd National Commission on Labour (2002) had recommended that no worker
should be kept continuously as a casual or temporary worker against a permanent job
for more than two years.
Comparison between fixed term employment, permanent employment and contract labour
Feature Fixed Term Employee Permanent Employee Contract Labour
• Employment under
• Engaged in an
written contract. No • Employment directly
establishment through a
contractor or agency is under a written contract.
Type of employment contractor or agency.
involved. • On the payroll of the
• Not on the payroll of the
• On the payroll of the establishment.
establishment.
establishment.
• Stipulated fixed term.
• Employed on a permanent
• Employment lapses on basis
completion of term, unless • Based on terms negotiated
Term renewed. • Notice has to be given for with the contractor.
termination of
• No notice is required to be employment.
given for retrenchment.
• Employment may be
prohibited in certain cases,
Nature of work • Not specified. • Hired for routine work. e.g., if similar work is
carried out by regular
workmen.