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The Codes find favour with some and disfavours others!

The consulting industry in India is a rapidly growing sector, with a CAGR of 30%. The industry is worth up to $1.4 billion and is expected to reach $2.1 billion by 2025. The key players in the consulting industry in India include some of the multinationals, however, Karma Global has upped its ante with loads of consulting work carried out in the IT, financial and regulatory services sectors.

Karma Global a Leading Consulting Firm, With Operations in U.K, U.S. Canada, Middle East and South East Asia, specialises in areas like staffing, on-boarding, payroll, facility management, curbing regulatory risk, auditing and abiding by all labour law related compliance on PAN basis.


The Codes find favour with some and disfavours others!

Critics say the four codes – the Code on Wages, 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020 – are controversial and anti-worker.

However, other commentators have praised the codes, saying they will boost economic growth and employment, and remove outdated laws that are no longer fit for purpose in a rapidly transforming economy.

Many commentators say the codes represent one of the most significant economic reforms undertaken by the Government.


Preparation for The Changes

According to the ‘Industry Expectation Survey on New Labour Codes’ by Grant Thornton Bharat, internal evaluations have been initiated by 43% of organizations with the goal of successful adoption of the new labour codes in India. While 20% of businesses have hired outside experts to help them be prepared.  Karma Global has been registered by many clients for implementing the various codes within client’s organizations.

According to the report, 13% of businesses are awaiting the formal announcement of the implementation date of the new labour codes of 2022, and 20% of respondents have not yet chosen their implementation techniques. Further, as per the study, organizations must assess how financial factors like gratuity, leave encashment, statutory bonus, etc., would affect overall employee pay expenditures in order to improve planning. 


What Is That Workers Will Get and Managers Will Not Get Under New Codes!

The various provisions of the labour codes are drafted with a view to protect and safeguard the interests of workers – thereby excluding managerial and supervisory individuals.   It is because of this pertinent point; one can conclude that the labour codes are more beneficial for a ‘worker’ as compared to a ‘manager’.


The definition of worker is the key ………….!

As per the labour codes, definition of worker includes any person employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work.


What are the conditions that can exclude an individual from being a worker?

  • The person is employed mainly in a managerial or administrative capacity; or
  • The person is employed in a supervisory capacity drawing wage exceeding Rs. 18,000 per month or an amount as may be notified by the Central Government from time to time;

Also, any person who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act,1957 or is employed in the police service or as an officer or other employee of a prison is specifically excluded from the definition of the worker.


What is the significance of revising the definition of a worker?

This is so because the current given definition lacks clarity and has been a matter of extensive litigation in the past. Terminologies such as managerial or supervisory role have not been defined and may have very different meaning in today’s digital world compared to what was interpreted by the courts in the past.

Moreover, the Court has held that an individual will qualify as a worker will depending on the role and responsibilities documented in the appointment letter or promotion letter and those executed by the individual on day to day basis


Let us look at some of the benefits available to workers

The new codes will provide greater protection and benefits for workers, including provisions for minimum wages, social security benefits, and grievance redressal mechanisms. The codes will also provide for a new social security net for workers, including insurance and pension benefits.


Proprietary blog of Karma Global

Collated and Compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection and auto generation for its monthly newsletter Issue 17 of November   2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – /

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