Government introduces 3 bills on Labour Law

The Government on 19th September, 2020 introduces new versions of three Labour codes – – Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020. The new labour codes propose to increase the ambit of social security by including gig workers and inter- state migrant workers. It has also proposed measures that will provide greater flexibility to employers to hire and fire workers without government permission.

The code on occupational safety, health and working conditions (OSH&WC Code) and the industrial relations code (IR Code) will give autonomy to states to amend labour laws to suit their industrial needs and attract investments through labour reforms without seeking Centre’s permission.

Occupational Safety, Health &Working Conditions Code, 2020

A few objectives:

  • To provide for issuing of appointment letter mandatorily by the employer of an establishment to promote formalisation in employment.
  • An Inter-State Migrant Worker has been provided with the portability to avail benefits in the destination State in respect of ration and availing benefits of building and other construction worker cess.
  • To make provision of “common license” for factory, contract labour and beedi and cigar establishments and to introduce the concept of a single all India license for a period of five years to engage the contract labour. And to make provision for Social Security Fund for the welfare of unorganised workers.
  • To provide overriding powers to the Central Government to regulate general safety and health of persons residing in whole or part of India in the event of declaration of epidemic or pandemic or disaster

Code on Social Security, 2020

A few objectives:

  • To provide for an establishment to be covered Employees’ Provident Fund (EPF) and Employees State Insurance Corporation (ESIC) on voluntary basis even if the number of employees in that establishment is less than the threshold i.e. 20 and 10 respectively.
  • To empower the Central Government to frame schemes for unorganised workers, gig workers and platform workers and the members of their families for providing benefits relating to Employees’ State Insurance Corporation.
  • To empower the Central Government to frame schemes for the purposes of providing social security benefits to self-employed workers or any other class of persons.
  • To provide for establishment and maintenance of separate accounts under social security fund, for the welfare of unorganised workers, gig workers and platform workers. To extend social security to all employees and workers either in the organised or unorganised or any other sectors

Industrial Relations Code, 2020

A few objectives

  • To define “workers” which includes the persons in supervisory capacity getting wages up to Rs 18,000 a month or an amount as may be notified by the Central Government from time to time.
  • To provide that the commencement of conciliation proceedings shall be deemed to have commenced on the date of the first meeting held by the conciliation officer in an industrial dispute after the receipt of the notice of strike or lock-out by the conciliation officer.
  • To prohibit strikes and lock-outs in all industrial establishments without giving notice of fourteen days.
  • To set up a re-skilling fund for training of retrenched workers with contribution of the employer of an amount equal to 15 days last drawn by the worker.
  • Earlier, the five year gratuity payment was mandatory, which meant millions of workers used to forfeit their gratuity deposits, salary of 15 days for every year of work, if they resigned or lost jobs before the stipulated period.

The code has removed the mandatory minimum gratuity threshold of five years, while introducing a different threshold structure for various category of workers. Regular and permanent employees will now have to work for at least five years to become eligible, while fixed-term workers will have no such limit. Instead, their gratuity payment will be linked to their tenure of work.