Parliament Monsoon Session, 2020: Part-II

Parliament Monsoon Session, 2020: Part-II

This write up put some light on the diverse laws passed by the Parliament’s Monsoon Session this year. The Parliament on 23nd September, 2020 passed three major labour law codes i.e. The Code on Social Security, 2020, The Industrial Relations Code, 2020 and The Occupational Safety, Health and Working Conditions Code, 2020 by merging 24 existing labour laws into codes so as to bring labour reforms in the country.

With the enactment of these Codes various labour laws such as The Factories Act, The Contract Labour Act, The Mines Act, The Employee’s Compensation Act, The Employees’ State Insurance Act, The Payment of Gratuity Act, The Employees’ Provident Funds and Miscellaneous Provisions Act, The Trade Unions Act, The Industrial Disputes Act and many more are repealed.

Let’s emphasis on the newest provisions concerning labour laws enshrined under the newest pieces of legislation:-

The Code on Social Security, 2020

Social security fund for both organized and informal workers: Under this new enactment the Govt. will set up a social security fund for both organized and informal workers as well as gig workers and platform workers. Informal workers means home based workers and self employed workers. The term gig worker refers to workers outside the traditional employer-employee relationship, and platform worker are those who access organizations or individuals through online platform to provide services or to unravel specific problems.

The Code also provides the provisions for registration of all three categories of workers i.e. informal workers, gig workers and platform workers.

National security scheme for gig worker and platform workers: The Govt. may establish a National Security Board for the purpose of welfare of gig workers and platform workers and this board can recommend and monitor schemes for gig worker and platform workers. This board will include the Director General of ESIC, 5 representatives each from aggregators, state governments, gig workers and platform workers.

Changes in definitions: The Code brings the changes in definitions like expanding the definition of ‘employees’ by including contractual workers, expanding the definition of ‘inter-state migrant workers’ by including self employed workers from other states, expanding definition of ‘platform workers’ to additional categories of services or activities as may be notified by the Govt. and exempting construction work from the ambit of ‘building or other construction work’ if the entire cost of construction work exceeds 50 lakhs.

Term of eligibility for gratuity: Earlier, it was settled law that gratuity was payable on the termination of employment, if employee serves in the establishment for at least 5 years. The new Code reduces the gratuity period from 5 years to 3 years in the case of working journalists.

The Occupational Safety, Health and Working Conditions Code, 2020

Threshold limit for coverage of establishments: The Code provides the new threshold limit for various establishments for coverage. For factories increases the edge limit to 20 workers for premises where the manufacturing process is carried out using power and 40 workers for premises where it is carried out without using power. For establishments where any hazardous activity is carried out removes the edge limit as number of worker doesn’t matter for coverage.

In case of case of contract worker the Code increases the limit as the establishments or contractors employing 50 or more workers covered under this Code. The new Code also removes the threshold limit in building and other construction work.

Daily work hour: The new Code fixes the maximum eight hours per day as daily work hour limit.

Employment of women in hazardous work: The new Code provides that women will be entitled to employed in all establishments for all types of work. If they are required to do hazardous work then the employer is required to provide adequate safeguards prior to their employment.

Definition of inter-state migrant worker: The new Code defines inter-state migrant worker as a person who moves on his own to another state and obtains employment there and earning a maximum Rs. 18,000/- per month or such higher amount Centre Govt. may notify.

Advantages for inter-state migrant workers: The Code provides certain advantages for inter-state migrant workers. This includes: benefit of public distribution system either in native state or the state of employment, benefits under the building and other construction cess fund in the state of employment and insurance and provident fund available to other workers in same establishment.

The Industrial Relations Code, 2020

Applicability of standing orders: As per the Code, establishments with 300 workers must have to prepare standing orders on the matters listed in the Schedule of the Code. These matters includes the classification of workers, manner of informing workers about work hours, holidays, paydays and wage days, termination of employment and grievance redressal mechanism for workers.

Prior permission in case of closure, lay-off and retrenchment: Under the new Code, Govt. can only increase the threshold limit for permission requirements via notification. Earlier, it was mandatory to obtain prior permission of the Govt. for establishment employing 100 workers in case of closure, lay-off and retrenchment. Now, establishments having strength of atleast 300 workers are required to take prior permission of the Govt. for closure, lay-off and retrenchment.

Disputes relating to termination of individual worker: The Code classifies any dispute in reference 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 same after 45 days of the application for conciliation of dispute was made.

-Kiranpreet Kaur

Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali