Sheena Ogra , Khyati Bhatia
February 14, 2023
The Industrial Relations Code, 2020 (“Code”) has been formulated to amend and consolidate the laws relating to settlement of disputes between workers and the employers by way of minimising the scope for illegal strikes and lock-outs by workers, providing efficient dispute settlement and grievance redressal mechanism. The Code further focuses on providing better working conditions to the workers and maintaining harmonious and healthy relations between the workers and the employers.
The Code subsumes the following enactments upon its enforcement, viz, (i) Industrial Disputes Act, 1947 (“ID Act”); (ii) Industrial Employment (Standing Orders) Act, 1946 (“Standing Orders Act”) and; (iii) Trade Unions Act, 1926. The extant legislations have been incorporated into separate chapters under the Code.
This article provides a comparative analysis of the key changes introduced under the Code with the current legislation framework and its impact on the employers as well the employees in India.
Additional Resource: The Code on Wages
The said amendment in the definition of industry focused on clarifying the nature of activities that industry must be engaged in and proposed exclusion of certain activities from the scope of industry such as agricultural operations, hospitals or dispensaries, educational, scientific, research or training institutes, institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service, khadi or village industries, domestic services, professional services where number of persons engaged is less than 10 (ten), any activity of the government relating to sovereign functions, activities carried on by a co-operative society or club.
(a) the contribution of the employer of an industrial establishment an amount equal to 15 (fifteen) days’ wages last drawn by such worker immediately before retrenched and; (b) the contribution from any other sources as may be prescribed by the appropriate government.
It is however mentioned under the Code that the Central Government, by way of notification, can increase number of days which shall be taken into consideration for contribution to the said fund.
In the backdrop of the existing labour law legislations which will be repealed after enforcement of the Code, it can be seen that the sweeping changes that have been intended to be brought by the Code are basically the long standing demand for the labour law reforms. Further, by way of such amendment, the government has focused on increasing the global competitiveness and fairness in the labour and employment legislations. The modification in the definition of worker will have bearing on the interest of the workers due to the reason that it now specifically excludes workers employed with the departments associated with space, defence research and atomic energy. This curtails the rights of employees of space or defence research organization. Further, any casual leave taken by more than 50% (fifty percent) or more workers will be implied as strike.
It can be seen that the introduction of fixed-term employment will provide some benefit to the employees who are being employed as fixed term employee as they shall now also be entitled to statutory benefits and the terms of their employment will now be regulated. This can be considered as a welcome move towards recognizing the rights of the fixed term employees. However, there is no provision captured pertaining to requirement or instances as to when these fixed term employees can be granted permanent status. There will, no doubt, be a constant fear of non-renewal of their fixed term contracts, which Code has not addressed.
In addition to this, it is interesting to note that with the introduction of the Code, relaxation has been given to the employers of factories, plantations and mines having less than 300 (three hundred) workers to obtaining prior approval from appropriate government before laying-off, retrenching any worker or closing the establishment. While introducing the said change, the government has provided reasoning that this change has been made in order to reduce the tedious process of acquiring permission and further making the process of obtaining hassle-free permission.
Lastly, the government has now stringent the penalties and imprisonment term for the industrial establishment who will breach any provision of the Code. With this, it can be seen that the government intends to implement the provisions of the Code with stringent approach and is leaving no stone unturned for making sure that the industrial establishments follow the provisions and rules as set out in the Code. Further, the Code has further empowered state government on formulating rules for better implementation of the provisions of the Code.
Considering the changes brought in through the Code, the government has focused on safeguarding the interest of the workers. However, it is yet to observe and analyse how these changes will be implemented by various industrial establishments specifically, the transition from the existing labour law legislations to the new Code. Further, the steps that will practically be taken by the government for checking the enforcement of the labour reforms, evasions made by the industrial establishments/employers and the extent of improvement of administrative hurdles in enforcing such changes.
Your email address will not be published *
As per Section 2(41) of the Companies Act, 2013 (“Act”), financial year, in relation to anyView More
Delhi (Head Office)
Plot No. 66, LGF, #TheHub, Okhla Phase III, Okhla Industrial Estate, New Delhi 110020, India.