UNIT 4

Introduction to Labour and Industrial Law,Theory and Concept of Industrial Relations, Industrial
Relations Code 2020, Code on Social Security 2020,Code on Occupational Safety, Health and Working
Conditions 2020,Code on Wages 2020,Industrial Disputes Act ,
The Factories Act, 1948 , Analysis of Recent Amendments made in Labour Laws.

Industrial Relations Code 2020

The Industrial Relations Code, 2020 provides a broader framework to protect the rights of workers
tomake unions, to reduce the friction between the employers, and workers and to provide regulations
for settlement of industrial disputes. The Code is prepared after amalgamating, simplifying and repealing
following 3 central labour acts:

i. The Trade Unions Act, 1926

ii. The Industrial Employment (Standing Orders) Act, 1946

iii. The Industrial Disputes Act, 1947

SCOPE & APPLICABILITY

The Code is designed to consolidate & amend the laws regarding Trade Unions, conditions of
employment in Industrial establishment or undertaking, and sleek settlement of industrial disputes. The
code regulates the subsequent areas:

• Registration of Trade Union

• Cancellation of Trade Union

• Alteration of Name of Trade Union

• Formation of Work Committee

• Incorporation of a Registered Trade Union

• Recognition of Negotiating Union

• Preparation of Standing Order

• Register of Standing Order

• Constitution of Industrial Tribunal

• Illegal Strikes and Lock-outs

• Procedure for Retrenchment and Re-employment of Retrenched Worker

• Compensation to Workers in case of Transfer of Establishment

• Prohibition of Lay-off

• Closure of an Industrial Establishment

OBJECTIVE

• The Code designated to safeguard the rights of employers and employees by providing easy labour
reforms and to facilitate ease of Doing Business.

• The object of the Code is to realize industrial peace and harmony as the ultimate pursuit in resolving
industrial disputes and to advance the progress of industry by bringing about the existence of harmony
and cordial relationship between the employers and workers.

KEY DEFINITIONS

• Industry means any systematic activity carried on by co-operation between an employer and for the
production, supply or distribution of goods or services with a view to satisfy human wants or wishes,
whether or not:I. any capital has been invested for the purpose of carrying on such activity

II. such activity is carried on with a motive to make any gain or profit, but does not include:

III. institutions owned or managed by organizations wholly or substantially engaged in any charitable,
social or philanthropic service

IV. any activity of the appropriate Government relatable to the sovereign functions of the appropriate
Government including all the activities carried on by the departments of the Central Government
dealing with defense research, atomic energy and space any domestic service.

V. any other activity as may be notified by the Central Government Employer means a person who
employs, whether directly or through any person, or on his behalf or on behalf of any person, one or
more employee or worker in his establishment and where the establishment is carried on by any
department of the Central Government or the State Government, the authority specified by the head of
the department in this behalf or where no authority is so specified, the head of the department, and in
relation to an establishment carriedon by a local authority, the chief executive of thatauthority, and
includes:

I. in relation to an establishment which is a factory, the occupier of the factory,

II. where a person has been named as a manager of the factory

III. in relation to any other establishment, the person who, or the authority which has ultimate control
ovethe affairs or the establishment and where the said affairs are entrusted to a manager or
managdirector, such manager or managing director; contractor and legal representative of a deceased
employer.

• Employee means any person other than an apprentice engaged under Apprentices Act, 1961
employed by an industrial establishment to do any skilled, semi-skilled or unskilled, manual, operational,
supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms
of employment be express or implied, and also includes a person declared to be an employee by the
appropriate Government, but does notinclude any member of the Armed Forces of the Union.

• Worker means any person except an apprentice employed in any industry to do any manual, unskilled,
skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied and includes working journalists, and includes any such person who
has been, dismissed, discharged or retrenched or otherwise terminated in connection with or as a
consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but
does notinclude any such person:

I. who is subject to the Air Force Act, 1950, or theArmy Act, 1950, or the Navy Act, 1957

II. who is employed in the police service or as an officer or other employee of a prison; or

III. who is employed mainly in a managerial or administrative capacity

IV. who is employed in a supervisory capacity drawing wage of exceeding eighteen thousand rupees (INR

18,000) per month or an amount as may be notified by the Central Government from time to time.

• Trade Union means any combination, whether temporary or permanent, formed primarily for the
purpose of regulating the relations between workers and employers or between workers and workers,
or between employers and employers, or for imposing restrictive conditions on the conduct of any trade
or business, and includes any federation of two or more Trade Unions.

• Retrenchment means termination by the employer of the service of a worker for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not
include:

I. voluntary retirement of the worker

II. retirement of the worker on reaching the age of superannuation

III. termination of the service of the worker as a result of the non-renewal of the contract of
employment between the employer.

• Standing orders means orders relating to matters set out in the First Schedule.

REGISTRATION OF TRADE UNION

• Any seven or more members of a trade union by subscribing to their names, apply for registration to
the Authority according to Rules of the Trade Union.

• At least ten percent of the workers or 100 workers, whichever is less, must be the members of the
Trade Union on the date of making an application for registration.
• Registered Trade Union shall continue to have at least ten percent of the workers or one hundred
workers, whichever is less.

• If the name of the Trade Union proposed to be registered is identical with an existing registered Trade

\nion, alteration of the name is required as asked by the Registrar of Trade Union.

• Registered Trade Union shall be a body incorporate by the registered name, having a common seal and
perpetual succession with the power to hold property.

CONSTITUTION OF WORK COMMITTEE

Industrial Establishment having or employed 100 or more workers during a period of 12 months, may be
required to constitute a Work Committee to promote protective measures for securing and preserving
sensible relations between the employer and workers.

RECOGNITION OF NEGOTIATING TRADE UNION

• For a Registered trade union, there shall be a negotiating union or council to negotiate with the
employer of the Industrial Establishment.

• If only one Trade Union of workers registered in an industrial establishment then the employer of
suchindustrial establishment shall recognize such Trade Union as the sole negotiating union of the
workers.

• If more than one Trade Union of registered workers in an Industrial Establishment then at least fifty-
one percent or more of workers on the muster roll of that Industrial Establishment will be recognized as
the sole negotiating union by the employer.

GRIEVANCE REDRESSAL COMMITTEE

Industrial Establishment having 20 or more workers shall constitute one or more Grievance Redressal
Committees with the maximum 10 members for resolution of disputes arising out of individual
grievances.

STANDING ORDERS

Industrial Establishment having or employed 300 or more workers on any day of during the period of 12
months, must prepare the standing orders on the following matters:

• Classification of workers

• Manner of intimating to workers for hours of work holidays, pay-days and wage rates

• Shift Working

• Attendance
• Conditions and procedure of leave and holidays

• Requirement to enter premises by certain gates, and liability to search.

STRIKES AND LOCK-OUTS

Every person employed in an Industrial Establishment isprohibited for strikes and lock-out, in breach of
contract:

• without giving 60 days advance notice of strikes and lock-out to the employer

• within fourteen days of giving such notice; or

• before the expiry of the date of strikes and lock-out specified in any such notice; or

• during the pendency of any conciliation proceedings before a conciliation officer and seven days after
the conclusion of such proceedings; or

• during the pendency of arbitration proceedings before an arbitrator & 60 days after conclusion of such
proceedings

CHANGE IN THE CONDITIONS OF SERVICE

The employer is required to send a notice of change in the conditions of service in the following matters,
to the workers being affected:

• wages, compensatory and other allowances

• contribution paid, or payable, by the employer to any provident fund or pension fund or for the
benefit of workers under any law for the time being in force

• hours of work and rest intervals

• leave with wages and holidays

• starting, alteration, or ending of shift operating otherwise than in accordance with standing orders

• classification by grades

• withdrawal of any customary concession or privilege or modification in usage

• introduction of recent provisions for discipline, or alteration of existing rules, except in so far as they
are provided in standing orders

• rationalization, standardization, or improvement of plant or technique that is likely to lead to

retrenchment of workers any increase or reduction in the no of persons employed or to be employed in
any occupation or process or department or shift, not occasioned by circumstances over which the
employer has no control.
RETRENCHMENT

• Provides procedures for the retrenchment of workers and the re-employment of the retrenched
worker.

• For the retrenchment, the employer must either give three months’ notice or pay the retrenched
worker in lieu of the notice period

• Where any worker is retrenched and the employerproposes to take into his employment any
persowithin one year of such retrenchment, an opportunity will be given to the retrenched workers who
are citizens of India to offer themselves for re-employment.

LAY-OFF

Lay-off is the inability of an employer from giving employment to a worker due to multiple factors such
as shortage of coal, power, or breakdown of machinery.

Non-seasonal industrial establishment (i.e. mines, factories, and plantations) with 50 to 300 workers is

required to: • pay 50% of basic wages and dearness allowance to aworker who has been laid off

• give one month’s notice or wages for the notice periodto the retrenched worker.

• non-seasonal industrial establishments with at least300 workers is required to take prior approval
fromcentral or state government before lay-off,retrenchment or closure

• prior approval before lay-off, retrenchment or closure isrequired by the non-seasonal Industrial
Establishmentswith at least 300 workers, from central or stategovernment.

CLOSURE

• Employer intending closure of an IndustrialEstablishment is required to serve 60 days advance notice

to the Government.

• Provision for compensation in case of Closure to thoseworkers who are in a continuous period of
service notless than one year.

EXEMPTIONS

The Code provides that the central or state government may exempt any new establishment or a class
of new establishment from all or any provisions of the Code in the public interest.
Code on Social Security, 2020
The Code under 14 Chapters, 164 Sections, 7 Schedules, consolidates, amends, reforms,
subsumes, and simplifies the provisions of:

 The Employee's Compensation Act, 1923:- payment by certain classes of employers to

their workmen of compensation for injury by accident.
 The Employees' State Insurance Act, 1948:- certain benefits to employees in case of
sickness, maternity and employment injury, related matters.
 The Employees' Provident Funds and Miscellaneous Provisions Act, 1952:-
institution of provident funds, pension fund, and deposit-linked insurance fund, for
employees in factories and other establishments.
 The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959:-
compulsory notification of vacancies to employment exchanges.
 The Maternity Benefit Act, 1961:- regulate the employment of women in certain
establishments for certain periods before and after child-birth and to provide for
maternity benefit and certain other benefits.
 The Payment of Gratuity Act, 1972:- scheme for the payment of gratuity to employees
engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or
other establishments.
 The Cine-Workers Welfare Fund Act, 1981:- financing of activities to promote the
welfare of certain cine- workers.
 The Building and Other Construction Workers' Welfare Cess Act, 1996:- levy and
collection of a cess on the cost of construction incurred by employers with a view to
augmenting the resources of the Building and Other Construction Workers’ Welfare
Boards constituted under the Building and Other Construction Workers (Regulation of
Employment and Conditions of Service) Act, 1996.
 The Unorganised Workers' Social Security Act, 2008:- social security and welfare of
unorganised workers.

Highlights of Code

 Eliminates the diversified definitions and authorities that exists under the above-
mentioned Acts by bringing uniformity.
 Enables the establishments to register for ESI voluntarily even if the number of
employees count is less than the prescribed threshold.
 Defines the term ‘employee’ to cover maximum number of employees and workers and
removes the term workers.
 Includes the gig workers, platform workers and the other unorganized workers within its
ambit of workers and simplify the registration process through Aadhar-based registration
for all these organized and unorganized worker segment.
 Reduces the multiple compliances under the aforesaid Acts to minimal level enabling
ease of compliance to the employers.
 Provides for the establishment and maintenance of separate social security funds for the
welfare of the gig workers, platform workers and unorganized workers sector.
 Provides for registration electronically, or otherwise, of every establishment.
  The establishments that are already registered under other Central labour laws need not
register again under this Code.
 Provides the option for cancellation of registration by any establishment whose business
are in the process of closure.

Social Security Organizations

The Central Government will constitute the appropriate Boards to perform its relating and
incidental functions under the Code viz.,

 Board of Trustees of Employees’ Provident Fund

 Employees’ State Insurance Corporation
 National Social Security Board and State Unorganised Workers’ Board
 State Building Workers’ Welfare Boards

Employees’ Provident Fund (PF)

Provident fund is a mandatory retirement savings scheme for the benefit of employees designed
with prescribed contributions under certain schemes. It comprises the employer and employee
contribution for the purpose of funds, pension and insurance schemes. Such such funds are
handled by the authorities of the government with stipulated payouts.

PF, Pension and Deposit-Linked Insurance Funds

The Provident Fund will be established by the Central Government where the contributions paid
by the employer be 10% of the wages for the time being payable to each of the employees
(whether employed by him directly or by or through a contactor), and the employee's
contribution shall be equal to the contribution payable by the employer in respect of him. If any
employee prefers to contribute an amount exceeding 10% of the wages, may do so, but the
employer need not pay any contribution over and above the 10% of the wages.

If the Central Government, for certain establishments, after inquiry if deems it fit, it may modify
the 10% to 12%. The Central Government, after making such inquiry as it deems fit, may,
specify rates of employees’ contributions and the period for which such rates shall apply for any
class of employee.

The employer shall pay his contribution for the Pension Fund under the Scheme not exceeding
8.3% of the wages or such other percent as the Central Government may notify.

The employer shall pay into the Insurance Fund not exceeding one-fourth of the contribution
which he is required to make under the Code, and as per the Central Government’s notification,
from time to time, determining to meet all the expenses in connection with the administration of
the Insurance Scheme other than the expenses towards the cost of any benefits provided by or
under the Insurance Scheme.

Employees’ State Insurance (ESI)

The ESI Funds will be utilized for the payment of benefits, provision of medical treatment,
attendance to insured and, where the medical benefit is extended to their families, the provision
of such medical benefit to their families; establishment and maintenance of hospitals,
dispensaries and other institutions and the provision of medical and other ancillary services for
the benefit of Insured Persons and, where the medical benefit is extended to their families; and
for the other incidental expenses that are essential to enable the ESI provisions.

Contribution

The contribution payable in respect of an employee comprise employer's contribution as well as

employee's contribution as per the rates prescribed by the Central Government. The contributions
payable in respect of each wage period ordinarily fall due on the last day of the wage period, and
where an employee is employed for part of the wage period, or is employed under two or more
employers during the same wage period, the contributions fall due on such days as may be
specified in the regulations. The employer has to pay in respect of every employee, whether
directly employed by him or by or through a contractor, both the employer's contribution and the
employee's contribution. In the case of an employee directly employed by the employer (not
being an exempted employee), the employer can recover from the employee the employee's
contribution by reduction from his wages and not otherwise.

No such deduction shall be made from any wages other than such as relates to the period or part
of the period in respect of which the contribution is payable or in excess of the sum representing
the employee's contribution for the period. Neither the employer nor the contractor shall be
entitled to deduct the employer's contribution from any wages payable to an employee or
otherwise to recover it from him. An employer, who has paid contribution in respect of an
employee employed by or through a contractor, can recover the amount of the contribution so
paid (that is to say the employer's contribution as well as the employee's contribution, if any,)
from the contractor, either by deduction from any amount payable to him by the employer under
any contract, or as a debt payable by the contractor. The contractor has to maintain a register of
employees employed by or through him as provided in the regulations and submit the same to the
employer before the settlement of any amount payable. The contractor can recover the
employee's contribution from the employee employed by or through him by deduction from
wages and not otherwise.

Benefits

The Insured Persons, their dependants are entitled for following benefits,periodically:

 Sickness Benefit
 Maternity Benefit
 Disablement Benefit
 Dependants Benefit
 Medical Benefit
 Funeral Expenses

An Insured Person shall not be entitled to receive for the same period:
  both sickness benefit and maternity benefit; or
 both sickness benefit and disablement benefit for temporary disablement; or
 both maternity benefit and disablement benefit for temporary disablement.
 Where a person is entitled to more than one of the benefits, he shall be entitled to choose
which benefit he shall receive.

If a person dies during any period for which he is entitled to a cash benefit, the amount of such
benefit up to and including the day of his death shall be paid to any person nominated by the
deceased person in writing in such form as may be specified in the regulations or, if there is no
such nomination, to the heir or legal representative of the deceased person.

Any person eligible for availing dependant or disablement benefit under this Chapter shall not be
entitled to claim Employees’ Compensation from his employer under Chapter VII (Employees
Compensation).

Any women employee eligible for availing maternity benefit under this Chapter shall not be
entitled to claim maternity benefit from her employer under Chapter VI (Maternity Benefit).

Where any person has received any benefit or payment under ESI when he is not lawfully
entitled thereto, he shall be liable to repay to the ESI Corporation the value of the benefit or the
amount of such payment, or in the case of death, his legal representative shall be liable to repay
the same from the assets of the deceased devolved on him.

Gratuity

Gratuity is a monetary component offered by an employer to an employee in recognition of

his/her service rendered to an organisation. It is paid by an employer when an employee leaves
the job after serving the same organisation for a minimum period of 5 years.

Gratuity is payable to an employee on the termination of employment after such employee has
rendered continuous service for not less than five years:

 on superannuation; or
 on retirement or resignation; or
 on death or disablement due to accident or disease; or
 on termination of contract period under fixed term employment; or
 on happening of any such event as may be notified by the Central Government.

Provided that:

In case of working journalist (section 2(f) of the Working Journalists and Other Newspaper
Employees (Condition of Service) and Miscellaneous Provisions Act, 1955), instead of five years
it will be three years;

The completion of continuous service of five years shall not be necessary where the
termination of the employment of any employee is due to death or disablement or
expiration of fixed term employment or happening of any such event as may be notified by
the Central Government.

In the case of death of the employee, gratuity payable shall be paid to the nominee or, if no
nomination has been made, to the heirs, and where any such nominees or heirs is a minor, the
share of such minor, shall be deposited with the competent authority as may be notified by the
appropriate Government who shall invest the same for the benefit of such minor in such bank or
other financial institution, as may be prescribed by the appropriate Government, until such minor
attains majority.

For every completed year of service or part thereof in excess of six months, the employer has to
pay gratuity to an employee at the rate of fifteen days' wages or such number of days as may be
notified by the Central Government, based on the rate of wages last drawn by the employee
concerned:

Provided that in case of:

A piece-rated employee, daily wages shall be computed on the average of the total wages
received by him for a period of three months immediately preceding the termination of
employment, and, for this purpose, the wages paid for any overtime work shall not be taken into
account;

An employee who is employed in a seasonal establishment and who is not so employed

throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each
season;An employee employed on fixed term employment or a deceased employee, the employer
shall pay gratuity on pro rata basis.The amount of gratuity payable to an employee not to exceed
such amount as may be notified by the Central Government.For the purpose of computing the
gratuity payable to an employee who is employed, after a disablement, on reduced wages, the
wages for the period preceding such disablement shall be taken to be the wages received by the
employee during that period, and the wages for the period subsequent to such disablement shall
be taken to be the wages as so reduced.The above provisions shall not affect the right of an
employee to receive better terms of gratuity under any award or agreement or contract with the
employer.

Forfeiture of Gratuity

The employer has the right to:

 forfeit the gratuity to the extent of the damage or loss caused by an employee, who has
been terminated for any act, wilful omission or negligence, causing any damage or loss
to, or destruction of, property belonging to the employer.
 wholly or partially forfeit the gratuity if the services of such employee have been
terminated for riotous
 or disorderly conduct or any other act of violence on his/her part, or
  if the services of such employee have been terminated for any act which constitutes an
offence involving moral turpitude, provided such offence is committed by him/her in the
course of his employment.

Continuous Service

An employee shall be said to be in continuous service for a period if such employee has for that
period been in uninterrupted service, including service which may be interrupted on account of
sickness, accident, leave, absence from duty without leave (not being absence in respect of which
an order treating the absence as break in service has been passed in accordance with the standing
orders, rules or regulations governing the employees of the establishment), lay-off, strike or a
lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or
interrupted service was rendered before or after the commencement of this Code.

Where an employee (not being an employee employed in a seasonal establishment) is not in

continuous service as stated above, for any period of one year or six months, such employee shall
be deemed to be in continuous service under the employer:

For the said period of one year, if the employee during the period of twelve calendar months
preceding the date with reference to which calculation is to be made, has actually worked under
the employer for not less than:

 one hundred and ninety days, in the case of any employee employed below the ground in
a mine or in an establishment which works for less than six days in a week; and
 two hundred and forty days, in any other case.

For the said period of six months, if the employee during the period of six calendar months
preceding the date with reference to which the calculation is to be made, has actually worked
under the employer for not less than:

 ninety-five days, in the case of an employee employed below the ground in a mine or in
an establishment which works for less than six days in a week; and
 one hundred and twenty days, in any other case.

The number of days on which an employee has actually worked under an employer shall include
the days on which:

 he / she has been laid-off under an agreement or as permitted by standing orders made
under the Industrial Employment (Standing Orders) Act, 1946, or under the Industrial
Disputes Act, 1947, or under any other law applicable to the establishment;
 he / she has been on leave with full wages, earned in the previous year;
 he / she has been absent due to temporary disablement caused by accident arising out of
and in the course of his employment; and
 in the case of a female, she has been on maternity leave; so, however, that the total period
of such maternity leave does not exceed twenty-six weeks.
Where an employee, employed in a seasonal establishment, is not in continuous service as stated
above, for any period of one year or six months, he shall be deemed to be in continuous service
under the employer for such period if he has actually worked for not less than seventy-five
percent of the number of days on which the establishment was in operation during such period.

The employer shall arrange to pay the amount of gratuity within thirty days from the date it
becomes payable to the person to whom the gratuity is payable.

Maternity Benefit

Maternity Benefit is an encouraging security measure for working women to protect them during
pregnancy with paid leaves and benefits.

The employer has to make sure not to employ a woman during the six weeks immediately
following the day of her delivery, miscarriage or medical termination of pregnancy. No woman
should work in any establishment during the six weeks immediately following the day of her
delivery, miscarriage or medical termination of pregnancy.

Employer should ensure that a pregnant woman is not subjected to any work which is of an
arduous nature or which involves long hours of standing or which in any way is likely to
interfere with her pregnancy or the normal development of the foetus or is likely to cause her
miscarriage or otherwise to adversely affect her health, specifically:

 During the period of one month immediately preceding the period of six weeks, before
the date of her expected delivery;
 Any period during the said period of six weeks for which the pregnant woman does not
avail of leave of absence;

Right to payment of maternity benefit

Every woman is entitled to, and her employer is liable for, the payment of maternity benefit at
the rate of the average daily wage for the period of her actual absence, that is to say, the period
immediately preceding the day of her delivery, and any period immediately following that day.

A woman is not entitled to maternity benefit unless she has actually worked in an establishment
of the employer from whom she claims maternity benefit, for a period of not less than eighty
days in the twelve months immediately preceding the date of her expected delivery.

The maximum period for which any woman shall be entitled to maternity benefit shall be
twenty-six weeks of which not more than eight weeks shall precede the expected date of her
delivery.

Provided that:
The maximum period entitled to maternity benefit by a woman having two or more surviving
children shall be twelve weeks of which not more than six weeks shall precede the date of her
expected delivery;

Where a woman dies during this period, the maternity benefit shall be payable only for the days
up to and including the day of her death;

Where a woman, having been delivered of a child, dies during her delivery or during the period
immediately following the date of her delivery for which she is entitled for the maternity benefit,
leaving behind in either case the child, the employer shall be liable for the maternity benefit for
that entire period but if the child also dies during the said period, then, for the days up to and
including the date of the death of the child.

Notice of claim for maternity benefit

Any woman employed in an establishment and entitled to maternity benefit under this maternity
provisions may give notice in writing in the manner prescribed, to her employer, stating that her
maternity benefit and any other amount to which she may be entitled may be paid to her or to
such person as she may nominate in the notice and that she will not work in any establishment
during the period for which she receives maternity benefit.

In the case of a woman who is pregnant, such notice shall state the date from which she will be
absent from work, not being a date earlier than eight weeks from the date of her expected
delivery.Any woman who has not given the notice when she was pregnant may give such notice
as soon as possible after her delivery. On receipt of the notice, the employer shall permit such
woman to absent herself from the establishment during the period for which she receives the
maternity benefit.

The amount of maternity benefit for the period preceding the date of her expected delivery shall
be paid in advance by the employer to the woman on production of such proof as may be
prescribed by the Central Government that the woman is pregnant, and the amount due for the
subsequent period shall be paid by the employer to the woman within forty-eight hours of
production of such proof as may be prescribed by the Central Government that the woman has
been delivered of a child.

The failure to give notice under this section shall not disentitle a woman to maternity benefit or
any other amount under this Chapter if she is otherwise entitled to such benefit or amount and in
any such case an Inspector-cum-Facilitator may either of his own motion or on an application
made to him by the woman, order the payment of such benefit or amount within such period as
may be specified in the order.

In case of a death of a woman

If a woman entitled to maternity benefit or any other amount under the maternity benefits, dies
before receiving such maternity benefit or amount, the employer shall pay such benefit or
amount to the person nominated by the woman in the notice and in case there is no such
nominee, to her legal representative.

Medical Bonus

Every woman entitled to maternity benefit under these above provisions shall also be entitled to
receive from her employer a medical bonus of three thousand five hundred rupees or such
amount as may be notified by the Central Government, if no pre-natal confinement and post-
natal care is provided for by the employer free of charge.

Miscarriage Leave

In case of miscarriage, or medical termination of pregnancy, a woman shall, on production of

such proof in the manner prescribed, be entitled to leave with wages at the rate of maternity
benefit, for a period of six weeks immediately following the day of her miscarriage or, as the
case may be, her medical termination of pregnancy.

In case of tubectomy operation, a woman shall, on production of such proof in the manner
prescribed, be entitled to leave with wages at the rate of maternity benefit for a period of two
weeks immediately following the day of her tubectomy operation.

A woman suffering from illness arising out of pregnancy, delivery, premature birth of child,
miscarriage or medical termination of pregnancy shall, on production of such proof in the
manner prescribed, be entitled, in addition to the period of absence allowed to her under section
62, or, 64(I), as the case may be, to leave with wages at the rate of maternity benefit for a
maximum period of one month.

Nursing Breaks & Creche Facility

Every woman delivered of a child who returns to duty after such delivery shall, in addition to the
interval for rest allowed to her, be allowed in the course of her daily work two breaks of such
duration as may be prescribed by the Central Government, for nursing the child until the child
attains the age of fifteen months.

The establishments to which the maternity provisions under this Code applies, in which fifty
employees are employed shall have the facility of crèche within such distance in the manner
prescribed, either separately or along with common facilities.

Provided that:

The employer shall allow four visits a day to the crèche by the woman, which shall also include
the intervals of rest allowed to her;

An establishment may avail common crèche facility of the Central Government, State
Government, municipality or private entity or provided by non-Governmental organisation or by
any other organisation or group of establishments who may pool their resources for setting up of
common crèche in the manner as they may agree for such purpose.

Every establishment to which the maternity provisions applies shall intimate in writing and
electronically to every woman at the time of her initial appointment in such establishment
regarding every benefit available under this Code.

Dismissal for absence during pregnancy

When a woman absents herself from work in accordance with the maternity provisions of this
Code, it is unlawful for her employer to discharge or dismiss her during or on account of such
absence or to give notice of discharge or dismissal on such a day that the notice will expire
during such absence, or to vary to her disadvantage any of the conditions of her service.

Provided that:

The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for
such discharge or dismissal would have been entitled to maternity benefit or medical bonus
under the maternity provisions, shall not have the effect of depriving her of the maternity benefit
or medical bonus.Where the dismissal is for any gross misconduct as may be prescribed by the
Central Government, the employer may, by order in writing, communicated to the woman,
deprive her of the maternity benefit or medical bonus, or both.

Any woman deprived of maternity benefit or medical bonus, or both, or discharged or dismissed
as stated above, may, within sixty days from the date on which order of such deprivation or
discharge or dismissal is communicated to her, appeal to the competent authority, and the
decision of that authority on such appeal, whether the woman should or should not be deprived
of maternity benefit or medical bonus or both, or discharged or dismissed, shall be final.

Forfeiture of maternity benefits

A woman who works for remuneration during the period she has been permitted by an employer
to absent herself for availing the maternity benefits provided under the maternity provisions of
this Code shall not be entitled to receive maternity benefit for such period.

Employees Compensation

Where any employee suffer due to any accident or occupational diseases that arise out of or in
the course of employment, the employer should compensate the employee to that effect.

Where, by any law for the time being in force, notice is required to be given to any authority, by
or on behalf of an employer, of any accident occurring in his premises which results in death or
serious bodily injury, the person required to give the notice should, within seven days of the
death or serious bodily injury, send a report to the competent authority giving the circumstances
attending the death or serious bodily injury, provided that where the State Government has so
specified, the person required to give the notice may instead of sending such report to the
competent authority send it to the authority to whom he is required to give the notice.

Employer’s liability for Compensation

If personal injury is caused to an employee by accident or an occupational disease listed in the

Third Schedule arising out of and in the course of his employment, his employer shall be liable
to pay compensation in accordance with the provisions of this Code.

Provided that the employer shall not be so liable:

 In respect of such injury which does not result in the total or partial disablement of the
employee for a period exceeding three days; and
 In respect of such injury, not resulting in death or permanent total disablement caused by
an accident which is directly attributable to the employee having been at the time thereof
under the influence of drink or drugs, or the wilful disobedience of the employee to an
order expressly given, or to a rule expressly framed, for the purpose of securing the safety
of employees, or the wilful removal or disregard by the employee of any safety guard or
other device which he knew to have been provided for the purpose of securing the safety
of employee.

An accident or an occupational disease as state above shall be deemed to arise out of and in the
course of an employee's employment despite the fact that he is at the time of the accident or at
the time of contracting the occupational disease, acting in contravention of the provisions of any
law applicable to him, or of any orders given by or on behalf of his employer or that he is acting
without instructions from his employer, if:

 Such accident or contracting of such occupational disease would have been deemed so to
have arisen had the act not been done in contravention as aforesaid or without
instructions from his employer, as the case may be; and
 The act is done for the purpose of, and in connection with, the employer's trade or
business.

If an employee employed in any employment specified in the Second Schedule contracts any
disease specified in the Third Schedule, being an occupational disease peculiar to that
employment whilst in the service of an employer in whose service he has been employed for a
continuous period of not less than six months, then, such disease shall be deemed to be an injury
by accident within the meaning of this section and unless the contrary is proved, the accident
shall be deemed to have arisen out of and in the course of the employment.

An accident occurring to an employee while commuting from his residence to the place of
employment for duty or from the place of employment to his residence after performing duty,
shall be deemed to have arisen out of and in the course of employment if nexus between the
circumstances, time and place in which the accident occurred and his employment is established.
No compensation shall be payable to an employee in respect of any accident or disease unless the
accident or disease is directly attributable to a specific injury by accident or disease arising out of
and in the course of his employment.

The above provisions do not confer any right to compensation on an employee in respect of any
accident or disease if he has instituted in a civil court a suit for damages in respect of the
accident or disease against the employer or any other person; and no suit for damages shall be
maintainable by an employee in any Court of law in respect of such accident or disease:

 If he has instituted a claim to compensation in respect of the accident or disease before a

competent authority; or
 If an agreement has been made between the employee and his employer providing for the
payment of compensation in respect of the accident or disease in accordance with the
provisions of this Chapter.

If death or injury is caused to any worker or a member of his family as a result of the collapse of
a house provided by the employer in a plantation, and the collapse is not solely and directly
attributable to a fault on the part of any occupant of the house or to a natural calamity, the
employer shall be liable to pay compensation under section 76 and the Sixth Schedule, so far as
may be applicable.

Amount of Compensation

Subject to the provisions, the amount of compensation shall be:

 Where death results from the injury, an amount equal to fifty percent of the monthly
wages of the deceased employee multiplied by the relevant factor or an amount as may be
notified by the Central Government from time to time, whichever is more;
 Where permanent total disablement results from the injury, an amount equal to sixty
percent of the monthly wages of the injured employee multiplied by the relevant factor or
an amount as may be notified by the Central Government from time to time, whichever is
more.

Explanation: Relevant factor, in relation to an employee means the factor specified in column
(3) of the Sixth Schedule relating to factors against the corresponding entry in column (2)
thereof, specifying the number of years which are the same as the completed years of the age of
the employee on his last birthday immediately preceding the date on which the compensation fell
due;

Where permanent partial disablement results from the injury:

 In the case of an injury specified in Part II of the Fourth Schedule, such percentage of the
compensation which would have been payable in the case of permanent total disablement
as is specified therein as being the percentage of the loss of earning capacity caused by
that injury; and
  In the case of an injury not specified in the Fourth Schedule, such percentage of the
compensation payable in the case of permanent total disablement as is proportionate to
the loss of earning capacity (as assessed by the medical practitioner) permanently caused
by the injury.

Where temporary disablement, whether total or partial, results from the injury, a half-monthly
payment of the sum equivalent to twenty-five percent of monthly wages of the employee, to be
paid as prescribed.

While fixing the amount of compensation payable to an employee in respect of an accident

which occurred outside India, the competent authority shall take into account the amount of
compensation, if any, awarded to such employee in accordance with the law of the country in
which the accident occurred and shall reduce the amount fixed by him by the amount of
compensation awarded to the employee in accordance with the law of that country.

The half-monthly payment referred above shall be payable on the sixteenth day:

 From the date of disablement where such disablement lasts for a period of twenty-eight
days or more; or
 After the expiry of a waiting period of three days from the date of disablement, where
such disablement lasts for a period of less than twenty-eight days; and thereafter half-
monthly during the disablement or during a period of five years, whichever is shorter.

Provided that:

There shall be deducted from any lump sum or half-monthly payments to which the employee is
entitled, the amount of any payment or allowance which the employee has received from the
employer by way of compensation during the period of disablement prior to the receipt of such
lump sum or of the first half-monthly payment, as the case may be, and such payment or
allowance which the employee has received from the employer towards his medical treatment
shall not be deemed to be a payment or allowance received by him by way of compensation.

No half-monthly payment shall in any case exceed the amount, if any, by which half the amount
of the monthly wages of the employee before the accident exceeds half the amount of such
wages which he is earning after the accident.

The employee shall be reimbursed, the actual medical expenditure incurred by him for treatment
of injuries caused during the course of employment, by his employer.

On the ceasing of the disablement before the date on which any half-monthly payment falls due,
there shall be payable in respect of that half-month a sum proportionate to the duration of the
disablement in that half-month.

If the injury of the employee results in his death, the employer shall, in addition to the
compensation, deposit with the competent authority a sum of not less than fifteen thousand
rupees or such amount as may be prescribed by the State Government, for payment of the same
to the eldest surviving dependant of the employee towards the expenditure of the funeral of such
employee or where the employee did not have a dependant or was not living with his dependant
at the time of his death, to the person who actually incurred such expenditure.

Method of calculating monthly wages for purposes of compensation

For the purposes of Employees Compensation provisions, the expression monthly wages means
the amount of wages deemed to be payable for a month's service (whether the wages are payable
by the month or by whatever other period or at piece rates), and calculated as follows, namely:

 Where the employee has, during a continuous period of not less than twelve months
immediately preceding the accident, been in the service of the employer who is liable to
pay compensation, the monthly wages of the employee shall be one-twelfth of the total
wages which have fallen due for payment to him by the employer in the last twelve
months of that period;
 Where the whole of the continuous period of service immediately preceding the accident
during which the employee was in the service of the employer who is liable to pay the
compensation was less than one month, the monthly wages of the employee shall be the
average monthly amount which, during the twelve months immediately preceding the
accident, was being earned by an employee employed on the same work by the same
employer, or, if there was no employee so employed, by an employee employed on
similar work in the same locality.

In other cases including cases in which it is not possible for want of necessary information to
calculate the monthly wages, the monthly wages shall be thirty times the total wages earned in
respect of the last continuous period of service immediately preceding the accident from the
employer who is liable to pay compensation, divided by the number of days comprising such
period.

Social Security and Cess in respect of Building and Other Construction Workers

For the purposes of social security and welfare of building workers, there will be a cess levied
and collected at a rate not less than 1 percent and nor exceeding 2 percent of the construction
cost incurred by an employer. The cost of construction shall not include, (a) the cost of land; and
(b) any compensation paid or payable to an employee or his kin under the provisions of
Employees Compensation under this Code.

Employer's Obligations

The cess levied shall be collected from every employer undertaking building or other
construction work in such manner and at such time, including deduction at source in relation to a
building or other construction work of a Government or of a public sector undertaking or
advance collection through a local authority where an approval of such building or other
construction work by such local authority or such other authority notified by the State
Government is required, as may be prescribed by the Central Government.
The proceeds of the cess collected to be deposited by the local authority or such other authority
notified by the State Government to the Building Workers' Welfare Board in such manner as
may be prescribed by the Central Government.

If any employer fails to pay any amount of cess payable as stated above within such time as may
be prescribed by the appropriate Government, such employer shall be liable to pay interest at
such rate as may be prescribed, on the amount of cess, to be paid, for the period from the date on
which such payment is due till such amount is actually paid.

The employer shall, within sixty days of the completion of each building and other construction
work, pay such cess (adjusting the advance cess already paid) payable on the basis of his self-
assessment on the cost of construction worked out on the basis of the documents and in the
manner prescribed and after such payment of cess, shall file a return.

Every building worker who has completed eighteen years of age, but has not completed sixty
years of age, and who has been engaged in any building or other construction work for not less
than ninety days during the preceding twelve months shall be registered by the officer authorised
by the Building Workers' Welfare Board as a beneficiary.

A building worker who has been registered as a beneficiary as stated above shall cease to be as
such when he attains the age of sixty years or when he is not engaged in building or other
construction work for not less than ninety days in a year, provided that in computing the period
of ninety days under this sub-section, there shall be excluded any period of absence from the
building or other construction work due to any personal injury caused to the building worker by
accident arising out of and in the course of his employment.

If a person had been a beneficiary for at least three years continuously immediately before
attaining the age of sixty years, then, he shall be eligible to get such benefits as may be
prescribed by the Central Government.

Building Workers' Welfare Board

The Building Workers' Welfare Board will be constituted to credit the Building and Other
Construction Workers' Welfare Fund and comprise the amount of any cess levied as aforesaid,
any grants and loans made to the Building Workers' Welfare Board by the Central Government,
and all sums received by the Building Workers' Welfare Board from such other sources as may
be decided by the Central Government.

Social Security for Unorganized Workers, Gig Workers, and Platform Workers

The Central Government will frame and notify, from time to time, suitable welfare schemes for
unorganised workers on matters relating to:

 Life and disability cover;

 Health and maternity benefits;
 Old age protection;
  Education; and
 Any other benefit as may be determined by the Central Government.

The State Government will frame and notify, from time to time, suitable welfare schemes for
unorganised workers, including schemes relating to:

 Provident fund;
 Employment injury benefit;
 Housing;
 Educational schemes for children;
 Skill upgradation of workers;
 Funeral assistance; and
 Old age homes.

Registration of unorganised workers, gig workers and platform workers Every unorganised
worker, gig worker or platform worker shall be required to be registered subject to the fulfilment
of the following conditions, namely:

 He has completed sixteen years of age;

 He has submitted a self-declaration electronically.

Every eligible unorganised worker, gig worker or platform worker shall make an application for
registration in such form along with such documents including Aadhaar number and such worker
shall be assigned a distinguishable number to his application, provided that the system of
electronic registration maintained by the appropriate Government shall also provide for self
registration by any such worker in such manner as may be prescribed by the Central
Government.

A registered unorganised worker, gig worker or platform worker shall be eligible to avail the
benefit of the concerned scheme framed under this Chapter.

Employment Information and Monitoring

The employer in every establishment or any class or category of establishments, before filling up
any vacancy in any employment in that establishment or such class or category of
establishments, have to report that vacancy to such career centre as may be specified, and the
employer should comply with such requisition. There is no obligation imposed upon any
employer to recruit any person through the career centre to fill any vacancy merely because such
vacancy has been reported.

Section 142 – Application of Aadhar

An employee or unorganised worker or any other person, as the case may be, for:

 registration as member or beneficiary; or

  seeking benefit whether in kind, cash or medical sickness benefit or pension, gratuity or
maternity benefit or any other benefit or for withdrawal of fund; or
 availing services of career centre; or
 receiving any payment or medical attendance as Insured Person himself or for his
dependants, under this Code or rules, regulations or schemes made or framed thereunder,
shall establish his identity or, as the case may be, the identity of his family members or
dependants through Aadhaar number and for such purpose the expression "Aadhaar" shall
have the meaning as defined in clause (a) of section 2 of the Aadhaar (The Targeted
Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.

Provided that any foreigner employee shall obtain and submit Aadhaar number for establishing
his identity, as soon as possible, on becoming resident within the meaning of clause (v) of
section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and
Services) Act, 2016.

Inspector-cum-Facilitator

The Inspector-cum-Facilitators will be appointed, for the purposes of this Code, and may also
have inspection scheme that provide for generation of a web-based inspection, calling of
information relating to the inspection electronically, and may be conferred with other jurisdiction
for randomised selection of inspection.

The Inspector-cum-Facilitator may advice the employers and employees relating to compliance
with the provisions of this Code; and inspect the establishments as assigned to him under the
provisions of this Code, subject to the instructions or guidelines issued by the appropriate
Government from time to time.

Maintenance of records, registers, returns

An employer of an establishment shall:

 Maintain records and registers in the prescribed manner, electronically or otherwise,

containing such particulars and details with regard to persons employed, muster roll,
wages and such other particulars and details, in such manner, as may be prescribed by the
appropriate Government including:
 Number of days for which work performed by employees;
 Number of hours of work performed by the employees;
 Wage paid;
 Leave, leave wages, wages for overtime work and attendance;
 Employees identification number, by whatever nomenclature it may be called;
 Number of dangerous occurrences, accidents, injuries in respect of which compensation
has been paid by the employer and the amount of such compensation relating to ESI and
Employees Compensation, respectively;
 Statutory deductions made by employer from the wages of an employee in respect of EPF
and ESI;
 Details as to cess paid in respect of building and other construction work;
  Total number of employees (regular, contractual or fixed term employment) on the day
specified;
 Persons recruited during a particular period;
 Occupational details of the employees; and
 Vacancies for which suitable candidates were not available during the specified period.
 Display notices at the workplaces of the employees in such manner and form in the
prescribed manner.
 Issue wage slips to the employees, in electronic forms or otherwise; and
 File such return electronically or otherwise to such officer or authority in the prescribed
manner;

Provided that:

Matters to be provided under the rules required to be made under this section relating to EPF
shall, instead of providing them in rules to be made by the Central Government, be provided in
the Provident Fund Scheme or the Pension Scheme or the Insurance Scheme, as the case may be:

The forms of records and registers and that of the returns to be filed under ESI provisions shall
be specified in the regulations instead of providing them in the rules.

Offences and Penalties

An employer, if fails to pay any contribution, will be punished with imprisonment for a term:

 which may extend to three years, but which shall not be less than one year, in case of
failure to pay the employee's contribution which has been deducted by him from the
employee's wages and shall also be liable to fine of one lakh rupees;
 which shall not be less than two months but may be extended to six months, in any other
case and shall also be liable to fine of fifty thousand rupees.

Provided that the court may, for any adequate and special reasons to be recorded in the judgment,
impose a sentence of imprisonment for a lesser term.

An employer will be punished with fine which may extend to fifty thousand rupees upon
committing any of the following, namely:

 Deducts or attempts to deduct from the wages of an employee, the whole or any part of
employer's contribution; or
 In contravention of the provisions of this Code, reduces the wages or any privilege or
benefits admissible to an employee; or
 Fails or refuses to submit any return, report, statement or any other information required
under this Code; or
 Fails to pay any amount of compensation to which an employee is entitled under this
Code; or
 Fails to send to a competent authority a statement which he is required to send under the
provisions of Employees Compensation; or
  Is guilty of any contravention of or non-compliance with any of the requirements of this
Code or the rules or the regulations or schemes made or framed thereunder in respect of
which no special penalty is provided in this Chapter; or
 Obstructs executive officer in exercising his functions under the provisions of
Employment Information & Monitoring; or
 Fails or makes default in complying with any condition subject to which exemption under
section 143 was granted; or
 Fails to pay any administrative or inspection charges payable under any of the schemes
framed under EPF provisions.

An employer, will be punished with an imprisonment for a term which may extend to six months
or with a fine which may extend to fifty thousand rupees, or with both, if:

 In contravention of the provisions of ESI or Maternity Benefit relating to dismisses,

discharges, reduces in rank or otherwise penalises a woman employee; or
 Obstructs any Inspector-cum-Facilitator or other officer or staff of the Central Board or
the Corporation or other Social Security Organisation or a competent authority in the
discharge of his duties; or
 Fails to provide any maternity benefit to which a woman is entitled under this Code; or
 Fails to produce on demand by the Inspector-cum-Facilitator any register or document in
his custody kept in pursuance of this Code or the rules, regulations or schemes made or
framed thereunder; or
 Fails to pay the cess for building workers which he is liable to pay under this Code; or
 Dishonestly makes a false return, report, statement or information to be submitted
thereunder.

An employer, if fails to pay any amount of gratuity to which an employee is entitled under this
Code, will be punished with imprisonment for a term which may extend to one year or with fine
which may extend to fifty thousand rupees, or with both.

If the employer, having been convicted by a court of an offence punishable under this Code,
commits the same offence shall, for second, or every subsequent such offence, will be punishable
with imprisonment for a term which may extend to two years and with fine of two lakh rupees.

Provided that where such second or subsequent offence is for failure by the employer to pay any
contribution, charges, cess, maternity benefit, gratuity or compensation which under this Code he
is liable to pay, he shall, for such second or subsequent offence, be punishable with
imprisonment for a term which may extend to three years but which shall not be less than two
years and shall also be liable to fine of three lakh rupees.

Code on Occupational Safety, Health and Working Conditions 2020

Key Highlights
  The Code simplifies the registration process prescribing that the establishment having ten or
more employees are required to be registered with the registering officer appointed by the
appropriate Government thereby minimizing the statutory compliances.
 Defines factory with increase in the threshold on number of workers from ten and twenty
workers to twenty and forty workers respectively and fixed the maximum limit of daily working
hours for the factory workers as eight hours per day.
 Mandates issuance of appointment letters to the employees and workers.
 Defines core activity of establishment as any activity which is the purpose of constituting an
establishment and activities that are incidentally essential and thereby prohibits employment of
contract labour in such core activities, however, exempts a few situations such as, (i) the normal
functioning of the establishment is such that the activity is ordinarily done through contractor,
(ii) the activities are such that they do not require full time workers for the major portion of the
day, or (iii) there is a sudden increase in the volume work in the core activity which needs to be
completed in a specified time.
 Expands the list of benefits to the inter-state migrant workman such as the benefits of the
insurance and provident fund benefits either in the native state or the state of employment,
portability of benefits of the inter-state migrant worker working for building or other
construction work out of the building and other construction cess fund in the destination State
where such inter-state migrant worker is employed.
 Mandates free health check-ups for who attained the age of forty five years for prescribed
industries such as factories, mines, plantations, workers employed in hazardous process.
 Introduces the concept of limiting the carryover of annual leaves (paid leaves) to a maximum of
30 days but provision made for encashment of leave in excess of 30 days. Therefore, the
concept of leave lapse will cease to exist by virtue of encashment.
 Introduced the penalty provisions more strictly such as contravention of any provision of the
Code shall attract a fine up to Rs. 2 Lakhs to 3 Lakhs.

Duties of Employer & Employees

Every employer should:

 ensure that workplace is free from hazards which cause or are likely to cause injury or
occupational disease to the employees;
 comply with the occupational safety and health standards declared under the rules, regulations,
bye-laws, or orders made under this Code;
 provide such annual health examination or test free of costs to such employees of such age or
such class of employees of establishments or such class of establishments, as may be prescribed
by the appropriate Government;
 provide and maintain, as far as is reasonably practicable, a working environment that is safe and
without risk to the health of the employees;
 ensure the disposal of hazardous and toxic waste including disposal of e-waste;
 issue a letter of appointment to every employee on his/her appointment in the establishment,
with such information and in such form as may be prescribed by the appropriate Government
and where an employee has not been issued such appointment letter on or before the
commencement of this Code, he/she shall, within three months of such commencement, be
issued such appointment letter;
  ensure that no charge is levied on any employee, in respect of anything done or provided for
maintenance of safety and health at workplace including conduct of medical examination and
investigation for the purpose of detecting occupational diseases;
 relating to factory, mine, dock work, building or other construction work or plantation, ensure
and be responsible for the safety and health of employees, workers and other persons who are
on the work premises of the employer, with or without his knowledge, as the case may be.

Without affecting the above-mentioned, the duties of an employer shall particularly in respect of
factory, mines, dock, building or other construction work or plantation include:

 the provision and maintenance of plant and systems of work in the workplace that are safe and
without risk to health;
 the arrangements in the workplace for ensuring safety and absence of risk to health in
connection with the use, handling, storage and transport of articles and substances;
 the provision of such information, instruction, training, and supervision as are necessary to
ensure the health and safety of all employees at work;
 the maintenance of all places of work in the workplace in a condition that is safe and without
risk to health and the provision and maintenance of such means of access to, and egress from,
such places as are safe and without such risk;
 the provision, maintenance or monitoring of such working environment in the workplace for the
employees that is safe, without risk to health as regards facilities and arrangements for their
welfare at work.

Duties and responsibilities of owner, agent, and manager in relation to mine

The owner and agent of every mine are jointly and severally responsible for making financial
and other provisions and for taking such other steps as may be necessary for compliance with the
provisions of this Code and the rules, regulations, bye-laws, and orders made thereunder, relating
to mine.

In the event of any contravention by any person whosoever of any of the provisions of this Code
or of the rules, regulations, bye-laws or orders made thereunder, relating to mine, except those
which specifically require any person to do any act or thing or prohibit any person from doing an
act or thing, besides the person who contravenes, then, each of the following persons shall also
be deemed to be guilty of such contravention unless he/she proves that he/she had used due
diligence to secure compliance with the provisions and had taken reasonable means to prevent
such contravention, namely, the official or officials appointed to perform duties of supervision in
respect of the provisions contravened; the manager of the mine; the owner and agent of the mine;
the person appointed, if any, to carry out the responsibility.

Duties of designers, manufacturers, importers, or suppliers

To the extent it is applicable in the course of business carried on and to the matters within his/her
control, every person who designs, manufactures, imports, or supplies any article for use in any
establishment, should:
  ensure so far as is reasonably practicable, that the article is so designed and constructed in the
establishment as to be safe and without risk to the health of the workers when properly used;
carry out or arrange for the carrying out of such tests and examination in the establishment as
may be considered necessary to make this effective;
 take steps as may be necessary to ensure that adequate information will be available:
 in connection with the use of the article in any establishment;
 about the use for which such article is designed and tested; and
 about any conditions necessary to ensure that the article, when put to such use, shall be safe,
and without risk to the health of the workers, provided that where an article is designed or
manufactured outside India,then it shall be obligatory on the part of the importer to see:
 that the article conforms to the same standards of such article manufactured in India; or
 if the standards adopted in the country outside India for the manufacture of such article is
above the standards adopted in India, that the article conforms to such standards in such
country;
 if there is no standard of such article in India, then, the article conforms to the standard adopted
in the country from where it is imported at its national level.

The designer, manufacturer, importer, or supplier shall also comply with such duties as the
Central Government may, in consultation with the National Occupational Safety and Health
Advisory Board by regulations specify.

Every person, who undertakes to design or manufacture any article and substance for use in any
factory, may carry out or arrange for the carrying out of necessary research with a view to the
discovery and, so far as is reasonably, practicable, the elimination or minimisation of any risks to
the health or safety of the workers to which the design or manufacture of article and substance
may give rise to such risk.

Every person who erects or installs any article for use in a factory, shall ensure, so far as
practicable, that such article so erected or installed does not make it unsafe or a risk to health
when that article is used by the persons in such factory;

Who manufactures, imports, or supplies any substance for use in any factory should:

 ensure, so far as practicable, that such substance when used in the factory does not make it
unsafe or a risk to health of persons working in such factory;
 carry out or arrange for carrying out of such tests and examination in relation to such substance
as may be necessary;
 take such steps as are necessary to secure that the information about the results of tests carried
out in connection with the use of the substance as referred to in sub-clause (ii) is available in a
factory along with conditions necessary to ensure its safe use and no risks to health;
 who undertakes the manufacture of any substance for use in any factory shall carry out or
arrange for carrying out of any necessary research with a view to discover and, so far as
practicable, to ensure the elimination or minimisation of any risks to health or safety to which
the substance may give rise out of such manufacture * or research;

Explanation:
  article shall include plant and machinery;
 substance means any natural or artificial substance whether in a solid or liquid form or in the
form of a gas or vapour; and
 substance for use in any factory means such substance, whether or not intended for use by
persons working in a factory.

Duties of architect, project engineer and designer

The architect, project engineer or designer are responsible for any building or other construction
work or the design of any project or part thereof relating to such building or other construction
work to ensure that, at the planning stage, due consideration is given to the safety and health
aspects of the building workers and employees who are employed in the erection, operation and
execution of such projects and structures as the case may be.

Adequate care should be taken by the architect, project engineer and other professionals involved
in the project, not to include anything in the design which would involve the use of dangerous
structures or other processes or materials, hazardous to health or safety of building workers and
employees during the course of erection, operation and execution as the case may be.

It shall also be the duty of the professionals, involved in designing the buildings structures or
other construction projects, to take into account the safety aspects associated with the
maintenance and upkeep of the structures and buildings where maintenance and upkeep may
involve such hazards as may be notified by the appropriate Government.

Notice of certain accident, dangerous occurrences, certain diseases

Where at any place in an establishment, an accident occurs which causes death, or which causes
any bodily injury by reason of which the person injured is prevented from working for a period
of forty-eight hours or more immediately following the accident or which is of such nature as
may be prescribed by the appropriate Government, then, employer or owner or agent or manager
of such establishment if it is mine; or employer or manager in relation to such establishment if it
is factory or relates to dock work; or the employer of a plantation or an establishment relating to
building or other construction or any other establishment, should send notice to such authorities,
in such manner and within such time, in the prescribed manner.

Where a notice given relates to an accident causing death in a plantation or an establishment

relating to building or other construction work or any other establishment, the authority to whom
the notice is sent should make an inquiry into the occurrence within two months of the receipt of
the notice or if there is no such authority, the Chief Inspector-cum-Facilitator shall cause the
Inspector-cum-Facilitator to make an inquiry within the said period.

Where in an establishment there is any dangerous occurrence of such nature, (whether causing
any bodily injury or disability, or not) the employer should send notice thereof to such
authorities, and in such form and within such time, in the prescribed manner.
Where any worker in an establishment contracts any disease specified in the Third Schedule, the
employer of the establishment should send notice to such authorities, within prescribed timeline
in the prescribed manner.

If any qualified medical practitioner attends on a person, who is or has been employed in an
establishment, and who is, or is believed by the qualified medical practitioner, to be suffering
from any disease specified in the Third Schedule, the medical practitioner should without delay
send a report in writing to the office of the Chief Inspector-cum-Facilitator in the prescribed
manner failing which shall be punishable with penalty which may extend to ten thousand rupees.

Duties of employee

Every employee at workplace should:

 take reasonable care for the health and safety of himself/herself and of other persons who may
be affected by his/her acts or omissions at the workplace;
 comply with the safety and health requirements specified in the standards;
 co-operate with the employer in meeting the statutory obligations of the employer under this
Code;
 if any situation which is unsafe or unhealthy comes to his/her attention, as soon as practicable,
report such situation to the employer or to the health and safety representative and in case of
mine, agent or manager, safety officers or an official for the workplace, who shall report it to the
employer in the prescribed manner.
 not wilfully interfere with or misuse or neglect any appliance, convenience or other thing
provided at workplace for the purpose of securing the health, safety, and welfare of workers;
 not do, wilfully and without reasonable cause, anything, likely to endanger himself/herself or
others; and
 perform such other duties as may be prescribed by the appropriate Government.

Rights of employee

Every employee in an establishment shall have the right to obtain from the employer information
relating to employee's health and safety at work and represent to the employer directly or through
a member of the Safety Committee as constituted under this Code, if constituted by the employer
for such purpose, regarding inadequate provision for protection of the safety or health in
connection with the work activity in the workplace,and if not satisfied, to the Inspector-cum-
Facilitator.

Where such employee in any workplace has reasonable apprehension that there is a likelihood of
imminent serious personal injury or death or imminent danger to health, the employee may bring
the same to the notice of his employer directly or through a member of the Safety Committee and
simultaneously bring the same to the notice of the Inspector-cum-Facilitator.

The employer or any employee should take immediate remedial action if he/she is satisfied about
the existence of such imminent danger and send a report forthwith of the action taken to the
Inspector-cum-Facilitator in the manner prescribed.
If the employer is not satisfied about the existence of any imminent danger as apprehended by
his employees, he/she shall, nevertheless, refer the matter forthwith to the Inspector-cum-
Facilitator whose decision on the question of the existence of such imminent danger shall be
final.

National & State Occupational Safety and Health Advisory Board

The Central Government will constitute the National Occupational Safety and Health Advisory
Board to discharge the functions conferred on it by or under this Code and to advise the Central
Government on the matters relating to:

 standards, rules, and regulations to be declared or framed under this Code;

 implementation of the provisions of this Code and the standards, rules and regulations relating
thereto;
 the issues of policy and programme relating to occupational safety and health referred to it,
from time to time, by the Central Government; and
 any other matter in respect of this Code referred to it, from time to time, by the Central
Government.

The State Government shall constitute a Board to be called the State Occupational Safety and
Health Advisory Board to advise the State Government on such matters arising out of the
administration of this Code as may be referred to it by the State Government.

Occupational safety and health standards

The Central Government shall declare, by notification, standards on occupational safety and
health for workplaces relating to factory, mine, dock work, beedi and cigar, building and other
construction work and other establishments.

Such standards shall relate to:

 physical, chemical, biological and any other hazards to be dealt with for the working life of
employee to ensure to the extent feasible on the basis of the best available evidence or
functional capacity, that no employee will suffer material impairment of health or functional
capacity even if such employee has regular exposure
 to such hazards;
 the norms, appraising the hazards to employees and users to whom such hazards are exposed;
relating to relevant symptoms and appropriate energy treatment and proper conditions and
precautions of safe use or exposure; for monitoring and measuring exposure of employees to
hazards; for medical examination and other tests which shall be made available, by the
employer or at his cost, to the employees exposed to hazards; and
 for hazard evaluation procedures like safety audit, hazard and operability study, fault free
analysis, event free analysis and such other requirements;
 medical examination including criteria for detection and reporting of occupational diseases to be
extended to the employees even after he ceases to be in employment, if he is suffering from an
occupational disease which arises out of or in the course of employment;
  such aspects of occupational safety and health relating to workplaces which the Central
Government considers necessary on the report of the authority designated by such Government
for such purpose;
 such safety and health measures as may be required having regard to the specific conditions
prevailing at the workplaces relating to mine, factory, building and other construction work,
beedi and cigar, dock work or any other establishments notified; and
 matters specified in the Second Schedule to this Code.

Safety Committee and Safety Officers

The appropriate Government may, require any establishment or class of establishments to

constitute a Safety Committee consisting of representatives of employers and workers engaged in
such establishment in prescribed manner.

In every establishment which is a:

 factory wherein five hundred workers or more; or

 factory carrying on hazardous process wherein two hundred fifty workers or more; or
 building or other construction work wherein two hundred fifty workers or more; or
 mine wherein one hundred workers or more, are ordinarily employed.

The employer shall also appoint such number of safety officers, who shall possess such
qualifications and perform such duties, as may be prescribed by appropriate Government.

Responsibility of employer for maintaining health, safety and working conditions

The employer is responsible to maintain in the establishment such health, safety and working
conditions for the employees as may be prescribed by the Central Government. The Central
Government may prescribe for providing all or any of the following matters in the establishment
or class of establishments, namely:

 cleanliness and hygiene;

 ventilation, temperature, and humidity;
 environment free from dust, noxious gas, fumes, and other impurities;
 adequate standard of humidification, artificially increasing the humidity of the air, ventilation,
and cooling of the air in work rooms;
 potable drinking water;
 adequate standards to prevent overcrowding and to provide sufficient space to employees or
other persons, as the case may be, employed therein;
 adequate lighting;
 sufficient arrangement for latrine and urinal accommodation to male, female, and transgender
employee separately and maintaining hygiene therein;
 effective arrangements for treatment of wastes and effluents; and
 any other arrangement which the Central Government considers appropriate.
Welfare facilities in the establishment

The employer is responsible to provide and maintain in his establishment such welfare facilities
for the employees as may be prescribed by the Central Government, including,

 adequate and suitable facilities for washing to male and female employees separately;
 bathing places and locker rooms for male, female, and transgender employees separately;
 place of keeping clothing not worn during working hours and for the drying of wet clothing;
 sitting arrangements for all employees obliged to work in a standing position;
 facilities of canteen in an establishment for employees thereof, wherein one hundred or more
workers including contract labourers are ordinarily employed;
 in case of mines, medical examination of the employees employed or to be employed in the
mines, before their employment and at specific intervals;
 adequate first-aid boxes or cupboards with contents readily accessible during all working hours;
and
 any other welfare measures which the Central Government considers, under the set of
circumstances, as required for decent standard of life of the employees.

The Central Government may also prescribe for the following matters, namely:

 ambulance room in every factory, mine, building or other construction work wherein more than
five hundred workers are ordinarily employed;
 medical facilities at the operating centres and halting stations, uniforms, raincoats, and other
like amenities for protection from rain or cold for motor transport workers;
 adequate, suitable, and separate shelters or rest-rooms for male, female and transgender
employees and lunch-room in every factory and mine wherein more than fifty workers are
ordinarily employed and in motor transport undertaking wherein employee is required to halt at
night;
 the appointment of welfare officer in every factory, mine, or plantation wherein two hundred
and fifty or more workers are ordinarily employed and the qualification, conditions of service
and duties of such welfare officer;
 for providing by the employer temporary living accommodation, free of charges and within the
work site or as near to it as may be possible, to all building workers employed by him and for
causing removal or demolition of such temporary living accommodation and for returning by the
employer the possession of any land obtained by him for such purpose from Municipal Board or
any other local authority;
 for payment by the principal employer the expenses incurred on providing the accommodation
to the contractor, where the building or other construction work is done through the contractor;
 any other matter which may be prescribed.

The Central Government may make rules to provide for the facility of creche having suitable
room or rooms for the use of children under the age of six years of the employees at suitable
location and distance either separately or along with common facilities in establishments wherein
more than fifty workers are ordinarily employed, provided that an establishment can avail
common crèche facility of the Central Government, State Government, municipality or private
entity or provided by non-Governmental organisation or by any other organisation or group of
establishments may pool their resources for setting up of common crèche in the manner as they
may agree for such purpose.

Hours of Work and Annual Leave with Wages

No worker shall be required or allowed to work, in any establishment or class of establishment

for more than:

 eight hours in a day; and

 the period of work in each day shall be so fixed, as not to exceed such hours, with such intervals
and spread overs , as may be notified by the appropriate Government:

Subject to the above, in the case of mines,

 the persons employed below ground in a mine shall not be allowed to work for more than such
hours as may be notified by the Central Government in any day;
 no work shall be carried on below ground in any mine except by a system of shifts so arranged
that the period of work for each shift is not spread over more than the daily maximum hours as
mentioned above;
 no person employed in a mine shall be allowed to be present in any part of a mine below ground
except during the periods of work shown in respect of him in the register maintained.

The hours of work in case of motor transport worker include:

 the time spent in work done during the running time of the transport vehicle;
 the time spent in subsidiary work; and
 period of mere attendance at terminals of less than fifteen minutes.

Period of mere attendance means the period during which a person remains at his post solely in
order to reply to possible calls or to resume action at the time fixed in the duty schedule.

The hours of work for working journalist shall, subject to a maximum of one hundred and
forty-four hours of work during any period of four consecutive weeks and a period of not less
than twenty-four consecutive hours of rest during any period of seven consecutive days, be such
as may be prescribed by the Central Government.

A sales promotion employee or the working journalist,in addition to such holidays, casual leave,
or other kinds of leave as may be prescribed by the Central Government, shall be granted, if
requested for:

 earned leave on full wages for not less than one-eleventh of the period spent on duty;
 leave on medical certificate on one-half of the wages for not less than one-eighteenth of the
period of service;
 may accumulate earned leave up to such maximum limit as may be prescribed by the Central
Government;
  shall be entitled for the limit up to which the earned leave may be either encashed or availed of
at a time by him and the reasons for which such limit may be exceeded shall be such as may be
prescribed by the Central Government; shall,

 when he voluntarily relinquishes his post or retires from service; or

 when his services are terminated for any reason whatsoever (not being termination as
punishment),
 be entitled to cash compensation, subject to such conditions and restrictions as may be
prescribed by the Central Government (including conditions by way of specifying the maximum
period for which such cash compensation shall be payable), in respect of the earned leave
earned by him and not availed of;
 who dies while in service, his heirs shall be entitled to cash compensation for the earned leave
earned by him and not availed of his heirs shall be paid the cash compensation in respect of any
period of earned leave for which he or his heirs, is or are entitled to cash compensation which
shall be an amount equal to the wages due to him for such period.

The working hours of an adolescent worker shall be regulated in accordance with the
provisions of the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986.

Weekly and compensatory holidays

No worker shall be allowed to work in an establishment for more than six days in any one week:
Provided that in any motor transport undertaking, an employer may, in order to prevent any
dislocation of a motor transport service, require a worker to work on any day of weekly holiday
which is not a holiday so arranged that the worker does not work for more than ten days
consecutively without a holiday for a whole day intervening.

Extra wages for overtime

There shall be paid wages at the rate of twice the rate of wages in respect of overtime work,
where a worker works in an establishment or class of establishment for more than such hours of
work in any day or in any week as may be prescribed by the appropriate Government and the
period of overtime work shall be calculated on a daily basis or weekly basis, whichever is more
favourable to such worker, provided that a worker shall be required to work overtime by the
employer subject to the consent of such worker for such work: provided further that the
appropriate Government may prescribe the total number of hours of overtime.

Night shifts

Where a worker in an establishment works on a shift which extends beyond midnight,

 for the purposes of section 26, a weekly holiday for a whole day shall mean in his case a period
of twenty-four consecutive hours beginning when his shift ends;
 the following day for him shall be deemed to be the period of twenty-four hours beginning
when such shift ends, and the hours he has worked after midnight shall be counted in the
previous day.
Prohibition of overlapping shifts

The work shall not be carried on in any establishment by means of a system of shifts so arranged
that more than one relay of workers is engaged in work of the same kind at the same time.

The appropriate Government or subject to the approval of the appropriate Government, the Chief
Inspector-cum-Facilitator, may, by written order and for the reasons specified therein, exempt on
such conditions as may be deemed expedient, any establishment or class of establishments or any
department or section of an establishment or any category or description of workers therein
provided that the provisions of this sub-section shall not apply to mines.

Restriction on double employment in factory and mine

No worker shall be required or allowed to work in a mine or factory if he has already been
working in any other such similar establishment within the preceding twelve hours, save in such
circumstances as may be prescribed by the appropriate Government.

Notice of periods of work

There shall be displayed and correctly maintained in every establishment a notice of periods of
work, showing clearly for every day the periods during which workers may be required to work
in accordance with the provisions of this Code.

The form of notice required, the manner of display of such notice and the manner in which such
notice shall be sent to the Inspector-cum-Facilitator shall be such as may be prescribed by the
appropriate Government.

Any proposed change in the system of work in any establishment which will necessitate a change
in the notice shall be intimated to the Inspector-cum-Facilitator before the change is made, and
except with the previous sanction of the Inspector-cum-Facilitator, no such change shall be made
until one week has elapsed since that last change.

Annual leave with wages

Every worker employed in an establishment shall be entitled for leave in a calendar year with
wages subject to the following conditions, namely:

 that he has worked one hundred and eighty days or more in such calendar year;
 that he shall be entitled for one-day leave for every twenty days of his work, in the case
of adolescent worker for fifteen days of his work, and in case of worker employed below
ground mine, at the rate of one day for every fifteen days of his work, in such calendar
year;
 any period of layoff, maternity leave or annual leave availed by such worker in such
calendar year shall be counted for calculating the period of one hundred and eighty days
or more, but he shall not earn leave for the period so counted;
  any holidays falling between the leave availed by such worker (in a calendar year or
prefixed or suffixed holiday) shall be excluded from the period of leave so availed;
 in case of such worker whose service commences otherwise than on the first day of
January shall be entitled to leave with wages at the rate specified, if he has worked for
one-fourth of the total number of days in the remainder of the calendar year;
 in case such worker is discharged or dismissed from service or quits employment or is
superannuated or dies while in service, during the course of the calendar year, such
worker or his heir or nominee, shall be entitled to wages in lieu of the quantum of leave
to which such worker was entitled immediately before his discharge, dismissal, quitting
of employment, superannuation, or death, calculated as specified in preceding clauses,
even:
 if such worker has not worked for the required period under this sub-section making such
worker eligible to avail such leave, and such payment shall be made;
 where such worker is discharged or dismissed or quits employment before the expiry of
the second working day from the date of such discharge, dismissal or quitting; and
 where such worker is superannuated or dies while in service, before the expiry of two
months from the date of such superannuation or death;
 if such worker does not in any one calendar year take the whole of the leave allowed to
him under this sub-section and the rules made thereunder, then, any leave not taken by
him shall be added to the leave to be allowed to him in the succeeding calendar year so
that:
 the total number of days of leave that may be carried forward to a succeeding year shall
not exceed thirty days; and
 such worker, who has applied for leave with wages but has not been given such leave in
accordance with this sub-section and the rules made thereunder shall be entitled to carry
forward the leave refused without any limit;
 such worker shall be entitled on his demand for encashment of leave at the end of
calendar year;
 such worker shall be entitled, where his total number of leave exceeds thirty days to
encash such exceeded leave.

These provisions not operate to the prejudice of any right to which a person employed in a mine
may be entitled under any other law or under the terms of any award, agreement or contract of
service: Provided that if such award, agreement or contract of service, provides for longer annual
leave with wages than that provided the quantum of leave, which the person employed shall be
entitled to, shall be in accordance with such award, agreement or contract of service but leave
shall be regulated in accordance with the aforesaid provisions with respect of matters not
provided for in such award, agreement, or contract of service: Provided further that where the
Central Government is satisfied that the leave rules applicable to persons employed in any mine
provide benefits which in its opinion are not less favourable than those stated above it may, by
order in writing and subject to such conditions as may be specified therein exempt the mine from
all or any of the aforesaid provisions.

Maintenance of Registers, Records, and Returns

An employer of an establishment should:
  maintain register in prescribed form, electronically or otherwise, containing such
particulars of workers as may be prescribed by the appropriate Government including,
 work performed by them;
 number of hours of work constituting normal working hours in a day;
 day of rest allowed in every period of seven days;
 wage paid and receipts given therefor;
 leave, leave wages, overtime work, attendance, and dangerous occurrences; and
 employment of adolescent;
 display notices at the work place of the workers in such manner and form as may be
prescribed by the appropriate Government;
 issue wage slips to the workers, in electronic forms or otherwise; and
 file such return electronically or otherwise to the Inspector-cum-Facilitator in such
manner and during such periods as may be prescribed by the appropriate Government.

Inspector-Cum-Facilitators and Other Authorities

The appropriate Government may appoint Inspector-cum-Facilitators who shall exercise the
powers conferred on them throughout their respective jurisdiction and apart from other duties to
be discharged by them, may conduct web-based inspection and calling of information under this
Code, electronically as specified.

Special Provision relating to Women employment

Women shall be entitled to be employed in all establishments for all types of work under this
Code and they may also be employed, with their consent before 6 a.m. and beyond 7 p.m. subject
to such conditions relating to safety, holidays and working hours or any other condition to be
observed by the employer as may be prescribed by the appropriate Government.

Where the appropriate Government considers that the employment of women is dangerous for
their health and safety, in an establishment or class of establishments or in any particular
hazardous or dangerous processes in such establishment or class of establishments, due to the
operation carried out therein, such Government may in the prescribed manner, require the
employer to provide adequate safeguards prior to the employment of women for such operation.

Special Provisions for Contract Labour and Inter-State

Migrant Workers
Contract Labour

These provisions apply to:

 every establishment in which fifty or more contract labours are employed or were employed on
any day of the preceding twelve months through contract;
  every manpower supply contractor who has employed, on any day of the preceding twelve
months, fifty or more contract labour.

These provisions do not apply to the establishment in which work only of an intermittent or
casual nature is performed: Provided that if a question arises as to whether work performed in an
establishment is of an intermittent or casual nature, the appropriate Government shall decide that
question after consultation with the National Board or a State Advisory Board and its decision
thereon shall be final.

Explanation: Work performed in an establishment shall not be deemed to be of an intermittent

nature:

 if it was performed for more than one hundred and twenty days in the preceding twelve
months; or
 if it is of seasonal character and is performed for more than sixty days in a year.

No contractor to whom these provisions apply shall supply or engage contract labour in any
establishment; or undertake or execute the work through contract labour, except under and in
accordance with a licence issued to him by the authority. Where the contractor does not fulfil the
requisite qualifications or criteria the authority may issue work specific licence electronically
renewable within such period as may be prescribed by the Central Government to supply or
engage the contract labour, or execute the work through contract labour, only for the concerned
work order as may be specified in such licence and subject to such conditions as may be
specified in such licence.

The contractor shall not charge directly or indirectly, in whole or in part, any fee or commission
from the contract labour.

Prohibition of employment of contract labour

The Code prohibits, employment of contract labour in core activities of any establishment except
where the principal employer may engage contract labour through a contractor to any core
activity, if:

 the normal functioning of the establishment is such that the activity is ordinarily done through
contractor; or
 the activities are such that they do not require full time workers for the major portion of the
working hours in a day or for longer periods, as the case may be;
 any sudden increase of volume of work in the core activity which needs to be accomplished in a
specified time.

If a question arises as to whether any activity of an establishment is a core activity or otherwise,

the aggrieved party may make an application in such form and manner as may be prescribed, to
the appropriate Government for decision; the appropriate Government may refer any such
question suo motu or refer the application to the designated authority, which on the basis of
relevant material in its possession, or after making such an enquiry as it deems fit, shall report to
the appropriate Government, within such period and thereafter the appropriate Government shall
decide the question within such period as may be prescribed.

Inter-State Migrant Workers

These provisions apply to every establishment in which ten or more inter-State migrant workers
are employed or were employed on any day of the preceding twelve months.

It shall be the duty of every contractor or the employer, of an establishment employing inter-
State migrant workers in connection with the work of that establishment:

 to ensure suitable conditions of work to such worker having regard to the fact that he is
required to work in a State different from his own State;
 in case of fatal accident or serious bodily injury to any such worker, to report to the specified
authorities of both the States and also the next of kin of the worker;
 to extend all benefits to such worker which are available to a worker of that establishment
including benefits under the Employees' State Insurance Act, 1948 or the Employees' Provident
Funds and Miscellaneous Provisions Act, 1952 or any other law for the time being in force and
the facility of medical check-up as available
 to a worker under this Code.

The employer shall pay to every inter-State migrant worker employed in his establishment, in a
year a lump sum amount of fare for to and fro journey to his native place from the place of his
employment, in the manner taking into account the minimum service for entitlement, periodicity
and class of travel and such other matters as may be prescribed by the appropriate Government.

The appropriate Government shall make schemes to provide:

 option to an inter-State migrant worker for availing benefits of public distribution system either
in his native State or the destination State where he is employed; and
 for portability of the benefits of the inter-State migrant worker working for building or other
construction work out of the building and other construction cess fund in the destination State
where such inter-State migrant worker is employed.

Audio-Visual Workers
No person shall be employed as an audio-visual worker in or in connection with production of
any audio-visual programme unless,

 an agreement in writing is entered into

 with such person by the producer of such audio-visual programme; or
 with such person by the producer of such audio-visual programme with the contractor,
where such person is employed through such contractor; or
 with such person by the contractor or other person through whom such person is
employed; and
  such agreement is registered with the competent authority, to be notified by the
appropriate Government, by the producer of such audio-visual programme.

Every such agreement shall,

 be in the prescribed form;

 specify the name and such other particulars as may be prescribed by the appropriate
Government with respect to, such person to be employed under the agreement as audio-visual
worker;
 include, where such audio-visual worker is employed through a contractor, a specific condition
to the effect that in the event of the contractor failing to discharge his obligations under the
agreement to the audio-visual worker with respect to payment of wages or any other matter,
the producer of the audio-visual programme shall also be liable to discharge such obligations
and shall be entitled to be reimbursed with respect thereto by the contractor.

A copy of such agreement with respect to the employment of the audio-visual worker shall, if
such audio-visual worker is covered under the provision of an enactment for the time being in
force for providing the benefit of provident fund to him, also be forwarded by the producer of the
audio-visual programme to such authority as may be prescribed by the appropriate Government.

The agreement shall include,—

 nature of assignment;
 wages and other benefits (including provident fund, if covered under the Employees’ Provident
Fund and Miscellaneous Provisions Act, 1952);
 health and working conditions;
 safety;
 hours of work;
 welfare facilities; and
 dispute resolution process or mechanism, the constitution and other details of which shall be
prescribed by the appropriate Government: Provided that in case of failure of the resolution of
the dispute in such dispute resolution process or mechanism, either party in the dispute may
invoke the jurisdiction of the Industrial Tribunal established by the appropriate Government
under section 7A of the Industrial Disputes Act, 1947 and for such purpose such dispute shall be
deemed to be industrial dispute within the meaning of that Act and it shall be the responsibility
of the producer of the audio-visual programme to provide the facilities specified in the
agreement to the audio-visual worker and the payment of wages shall be through electronic
mode.

Mines
Every mine shall be under a sole manager who shall have such qualifications as may be
prescribed by the Central Government and the owner or agent of every mine shall appoint a
person having such qualifications to be the manager: Provided that the owner or agent may
appoint himself as manager if he possesses the prescribed qualifications.
Subject to any instructions given to him by or on behalf of the owner or agent of the mine, the
manager shall be responsible for the overall management, control, supervision, and direction of
the mine and all such instructions when given by the owner or agent shall be confirmed in
writing forthwith.

Except in case of an emergency, the owner or agent of a mine or anyone on his behalf shall not
give, otherwise than through the manager, instructions affecting the fulfilment of his statutory
duties, to a person, employed in a mine, who is responsible to the manager.

The provisions of this Code, except those contained in sections 35, 38, 40, 41 and 44, shall not
apply to:

 any mine or part thereof in which excavation is being made for prospecting purposes only and
not for the purpose of obtaining minerals for use or sale subject to such conditions relating to
number of employees, depth of excavation and other matters as may be prescribed by the
Central Government;
 any mine engaged in the extraction of kankar, murrum, laterite, boulder, gravel, shingle,
ordinary sand (excluding mouldings and glass sand and other mineral sands), ordinary clay
(excluding kaolin, China clay, white clay, or fire clay), building stone, slate, road metal, earth,
fullers earth (marl, chalk) and lime stone subject to such conditions relating to workings, open
cast workings and explosives as may be prescribed by the Central Government.

In case of an emergency involving serious risk to the safety of the mine or of persons employed
therein, or in case of an accident, whether actual or apprehended, or in case of any act of God or
in case of any urgent work to be done to machinery, plant or equipment of the mine as a result of
breakdown of such machinery plant or equipment, the manager may, subject to the provisions of
the Code as may be necessary to protect the safety of the mine or of the persons employed
therein: Provided that in case of any urgent work to be done to machinery, plant or equipment
under this section, the manager may take the action permitted by this section, although the
production of mineral would thereby be incidentally affected, but any action so taken shall not
exceed the limits necessary for the purpose of avoiding serious interference with the ordinary
working of the mine.

No person below eighteen years of age shall be allowed to work in any mine or part thereof. The
apprentices and other trainees, not below sixteen years of age, may be allowed to work, under
proper supervision, in a mine or part thereof by the manager: Provided that in the case of
trainees, other than apprentices, prior approval of the Chief Inspector-cum-Facilitator or an
Inspector-cum-Facilitator shall be obtained before they are allowed to work.

The Central Government may prescribe the provisions for medical examination of apprentice,
other trainee, and employee in the mine to ensure their fitness to work and to prevent the persons
below sixteen years of age to work as apprentice or trainee and those who are not adults to work
as such employee.

Beedi and Cigar Workers

No employer shall use or allow to use any place or premises as an industrial premises unless he
holds a valid licence issued under this Code for the purposes of these provisions, and no such
premises shall be used except in accordance with the terms and conditions of such licence.

Subject to the provisions of section 119, any person who intends to use or allows to use any
place or premises shall make an application to the authority in prescribed manner, for a licence to
use, or allow to use, such premises as an industrial premises. Such application shall specify the
maximum number of employees proposed to be employed at any time of the day in the place or
premises and shall be accompanied by a plan of the place or premises prepared. The authority, in
deciding whether to grant or refuse to grant a licence, have regard to:

 the suitability of the place or premises which is proposed to be used for the manufacture of
beedi or cigar or both;
 previous experience of the applicant or he has employed experienced person or has entered
into agreement with the experienced person for employment for the period of licence;
 the financial resources of the applicant including his financial capacity to meet the demands
arising out of the provisions of the laws for the time being in force relating to welfare of labour;
 whether the application is made bona fide on behalf of the applicant himself or in benami of any
other person;
 welfare of the labour in the locality, the interest of the public generally and such other matters
as may be prescribed by the State Government.

A licence granted shall be valid for five years and may be renewed thereafter. An application for
the renewal of a licence for the purposes of these provisions shall be made at least thirty days
before the expiry of the period thereof, on payment of such fees as may be prescribed by the
State Government, and where such an application has been made, the licence shall be deemed to
continue, notwithstanding the expiry of the period thereof, until the renewal of the licence, or, as
the case may be, the rejection of the application for the renewal thereof: Provided that the
authority shall not grant or renew a licence unless it is satisfied that the provisions of this Part
and the rules made thereunder have been complied with.

Nothing contained in this Part shall apply to the owner or occupier of a private dwelling house,
not being an employee of an employer to whom this Part applies, who carries on any
manufacturing process in such private dwelling house with the assistance of the members of his
family living with him in such dwelling house and dependent on him.

Explanation:

Family does not include child, as defined in the Child and Adolescent (Prohibition and
Regulation) Act, 1986, for this section; Private dwelling house means a house in which persons
engaged in the manufacture of beedi or cigar or both reside.

Building or Other Constructions Workers

No person, about whom the employer knows or has reasons to believe that he is a deaf or he has
a defective vision, or he has a tendency to giddiness, shall be required or allowed to work in any
such operation of building or other construction work which is likely to involve a risk of any
accident either to the building worker himself or to any other person.

Factories
The appropriate Government may make rules in respect of factory or class or description of
factories for:

 the submission of plans including specifications, nature, and certification thereof;

 the previous permission for the site on which the factory is to be situated and for the
construction or extension thereof; and
 subject to the provision of sub-section 119, licensing and renewal thereof including fees to be
payable for such, licensing, and renewal, if required, as the case may be.

If on an application for permission accompanied by the plans and specifications required by the
rules, sent to the State Government or Chief Inspector-cum-Facilitator in the electronic mode, no
order is communicated to the applicant within such period not exceeding thirty days, the
permission applied for in the said application shall be deemed to have been granted.

Where a State Government or a Chief Inspector-cum-Facilitator refuses to grant permission to

the site, construction or extension of a factory and licensing of a factory, the applicant may
within thirty days of the date of such refusal appeal to the Central Government if the decision
appealed from was of the State Government and to the State Government in any other case.

Explanation: A factory shall not be deemed to be extended within the meaning of this section by
reason only of the replacement of any plant or machinery or within such limits as may be
prescribed, of the addition of any plant or machinery if such replacement or addition does not
reduce the minimum clear space required for safe working around the plant or machinery or
adversely affect the environmental conditions from the evolution or emission of steam, heat or
dust or fumes injurious to health.

Where any premises or separate buildings are leased to different occupiers for use as separate
factories, the owner of the premises and occupiers of the factories utilising such common
facilities which include safety and fire prevention and protection,access, hygiene, occupational
health, ventilation, temperature, emergency preparedness and response, canteens, shelter, rest
rooms and crèches shall jointly and severally be responsible for provision and maintenance of
such common facilities and services as may be prescribed by the appropriate Government.

The appropriate Government may by rules make the provisions relating to any factory or class or
description of factories in which manufacturing process or operation is carried on which exposes
any of the persons employed in it to a serious risk of bodily injury, poisoning or disease, for:

 specifying the manufacturing process or operation and declaring it to be dangerous;

 prohibiting or restricting the employment of pregnant women in the manufacturing process or
operation;
  the periodical medical examination before, or at any time during the employment to ascertain
the fitness of a worker or employee for such employment on the cost of the occupier; and
 welfare amenities, sanitary facilities, protective equipment and clothing, and any other
requirement necessary for dangerous operations.

The occupier of every factory involving a hazardous process shall disclose in the manner
prescribed by the State Government all information regarding dangers, including health hazards
and the measures to overcome such hazards arising from the exposure to or handling of the
materials or substances in the manufacture, transportation, storage and other processes, to the
workers employed in the factory, the Chief Inspector-cum-Facilitator or Inspector-cum-
Facilitator, the local authority within whose jurisdiction the factory is situate and the general
public in the vicinity.

The occupier shall, at the time of registering the factory involving a hazardous process, lay down
a detailed policy with respect to the health and safety of the workers employed therein and
intimate such policy to the Chief Inspector-cum-Facilitator or Inspector-cum-Facilitator and the
local authority and, thereafter, at such intervals as may be prescribed by the State Government,
inform the Chief Inspector-cum-Facilitator or Inspector-cum-Facilitator and the local authority of
any change made in the said policy.

The information furnished shall include accurate information as to the quantity, specifications
and other characteristics of wastes and the manner of their disposal.

Every occupier shall, with the approval of the Chief Inspector-cum-Facilitator, draw up an on-
site emergency plan and detailed disaster control measures for his factory and make known to the
workers employed therein and to the general public living in the vicinity of the factory the safety
measures required to be taken in the event of an accident taking place.

Every occupier of a factory shall, if such factory proposes to engage in a hazardous process at
any time after the commencement of this Code, within a period of thirty days before the
commencement of such process, inform the Chief Inspector-cum-Facilitator about the nature and
details of the process in such form and in such manner as may be prescribed by the State
Government. Where any occupier of a factory contravenes this provision the licence issued to
such factory shall, notwithstanding any penalty to which the occupier of factory shall be
subjected to under the provisions of this Code, be liable for cancellation.

The occupier of a factory involving a hazardous process shall, with the previous approval of the
Chief Inspector-cum-Facilitator, lay down measures for the handling, usage, transportation, and
storage of hazardous substances inside the factory premises and the disposal of such substances
outside the factory premises and publicise them in the manner prescribed by the State
Government among the workers and the general public living in the vicinity.

Every occupier of a factory involving any hazardous process should:

 maintain accurate and up-to-date health records or, as the case may be, medical records, of the
workers in the factory who are exposed to any chemical, toxic or any other harmful substances
 which are manufactured, stored, handled, or transported and such records shall be accessible to
the workers subject to such conditions as may be prescribed by the State Government;
 appoint persons who possess prescribed qualifications and experience in handling hazardous
substances and are competent to supervise such handling within the factory and to provide at
the working place all the necessary facilities for protecting the workers in the manner prescribed
by the State Government: Provided that where any question arises as to the qualifications and
experience of a person so appointed, the decision of the Chief Inspector-cum-Facilitator shall be
final;
 provide for medical examination of every worker:-
 before such worker is assigned to a job involving the handling of, or working with, a hazardous
substance; and
 while continuing in such job, and after he has ceased to work in such job, at intervals not
exceeding twelve months, in such manner as may be prescribed by the State Government.

Offences and Penalties

Any establishment, if contravenes the provisions of this Code or regulations or rules, or bye-
laws or any of standards, made thereunder or of any order in writing given under this Code or
such regulations or rules or bye-laws or standards, the employer or the principal employer of the
establishment, as the case may be, shall be liable to penalty which shall not be less than two
lakhs rupees but which may extend up to three lakh rupees, and if the contravention is continued
after the conviction, then, with further penalty which may extend to two thousand rupees for
each day till such contravention continues.

Whoever wilfully:

 prevents or causes obstruction to a Chief Inspector-cum-Facilitator or Inspector-cum-Facilitator

or an officer of the appropriate Government or a person authorised to discharge any duty or to
exercise any powers under this Code or the rules or the regulations or the bye-laws made
thereunder from discharging such duty or exercising such power; or
 refuses entry to the Chief Inspector-cum-Facilitator or the Inspector-cum-Facilitator or person or
public authority referred to in section 35 (1) (i) or expert referred to in section 37, to any place
where such Chief Inspector-cum-Facilitator or Inspector-cum-Facilitator or such person or
authority or expert is entitled to enter; or
 fails or refuses to produce any document which he is required to produce; or (iv) fails to comply
with any requisition or order issued to him, under this Code or the rules, regulations or bye-laws
made thereunder he shall be punishable with imprisonment for a term which may extend to
three months, or with fine which may extend to one lakh rupees, or with both. Where any
person convicted of an offence punishable as mentioned here, if is again convicted of an offence
under the same provision, then, he shall be punishable with imprisonment for a term which may
extend to six months, or with fine which shall not be less than one lakh rupees, but which may
extend to two lakh rupees, or with both.

Any person, who is required under this Code or the rules or regulations or bye-laws or order
made thereunder, to maintain any register or other document or to file returns, omits or fails to
maintain such register or document or to file such returns; or produce any register or plan or
record or report or any other document, omits or fails to produce such register or plan or record
or report or such other document, he shall be liable to penalty which shall not be less than fifty
thousand rupees, but which may extend to one lakh rupees. Where any person convicted of an
offence punishable as mentioned here, if is again convicted of an offence under the same
provision, then, he shall be liable to penalty which shall not be less than fifty thousand rupees,
but which may extend to two lakh rupees.

Any person, who, save as permitted by or under this Code, contravenes, any provision of this
Code or of any rule, regulation, or bye-laws; or order made under this Code prohibiting,
restricting, or regulating the employment of workers including women, audio-visual worker and
contract labour and employee below eighteen years of age in case of mines he shall be liable to
penalty which shall not be less than fifty thousand rupees, but which may extend to one lakh
rupees. Where any person convicted of an offence punishable as mentioned here, if is again
convicted of an offence under the same provision, then, he shall be punishable with
imprisonment for a term which may extend to three months, or with fine which may extend to
two lakh rupees, or with both.

Whoever:

 produces false records or counterfeits or knowingly makes or produces or uses a false

statement, declaration or evidence regarding any document in connection with compliance of
any of the provisions of this Code or any rules, regulations or bye-laws or any order made
thereunder; or
 falsifies any plan or section, the maintenance of which is required by or under this Code or
produces before any authority such plan or section, knowing the same to be false; or
 makes, gives or delivers knowingly a false plan, section, return, notice, record or report
containing a statement, entry or detail, he shall be punishable with imprisonment for a term
which may extend to three months, or with fine which may extend to one lakh rupees, or with
both.

Where any person convicted of an offence punishable as mentioned here, if is again convicted of
an offence under the same provision, then, he shall be punishable with imprisonment for a term
which may extend to six months, or with fine which shall not be less than one lakh rupees, but
which may extend to two lakh rupees, or with both.

Any person who, without reasonable excuse the burden of proving which shall lies upon him,
omits to make, or furnish in the prescribed form or manner or at, or within, the prescribed time
any plan, section, return, notice, register, record, or report required by or under any provision of
this Code to be made or furnished, he shall be liable to penalty which shall not be less than one
lakh rupees, but which may extend to two lakh rupees.

Whoever being the Chief Inspector-cum-Facilitator or Inspector-cum-Facilitator, or any other

person referred to in section 39 or section 121 discloses, contrary to the provisions of that
section, any such information as is referred to in that section without the consent of the
appropriate Government, he shall be punishable with imprisonment for a term which may extend
to three months, or with fine which may extend to one lakh rupees,or with both.
Whoever, except in so far as it may be necessary for the purposes of a prosecution for any
offence punishable under this Code, publishes or discloses to any person the results of an
analysis, of a sample of substance used or intended to be used in any process under this Code,
shall be punishable with imprisonment for a term, which may extend to six months, or with fine,
which may extend to fifty thousand rupees, or with both.

Whoever fails to comply with or contravenes any of his duties specified under section 6(1) or (2)
(a) to (h) or section 13 (d) in so far as such duty relates to hazardous processes; or section 80,
shall, in respect of such failure or contravention, be punishable with an imprisonment for a term
which may extend to two years and with fine which may extend to five lakh rupees, and in case
the failure or contravention continues, with additional fine which may extend to twenty-five
thousand rupees for every day during which such failure or contravention continues, after the
conviction for the first such failure or contravention. If the failure or contravention referred here
continues beyond a period of one year after the date of conviction, the offender shall be
punishable with imprisonment for a term which may extend to three years or with a fine of
twenty lakh rupees, or with both.

If a person fails to comply with or contravenes any duties under this Code or the regulations,
rules, bye-laws or orders made thereunder and such non-compliance or contravention has
resulted in an accident or dangerous occurrences causing:

 death, he shall be punishable with imprisonment for a term which may extend to two years, or
with a fine which shall not be less than five lakh rupees, or with both; or
 serious bodily injury to any person within the establishment,

He shall be punishable with imprisonment for a term which may extend to one year, or with a
fine which shall not be less than two lakh rupees but not exceeding four lakh rupees, or with
both: Provided that while imposing the fine under this section, the court may direct that a portion
of the fine, which shall not be less than fifty per cent. thereof, shall be given as compensation to
the victim or to the legal heirs of the victim, in the case of his death. Where a person having been
convicted as mentioned here, if is again convicted, shall be punishable with double the
punishment provided under that sub-section for first conviction.

Whoever continues to work in contravention of any general or special order issued under the
provisions of section 38, shall be punishable with imprisonment for a term which may extend to
two years and shall also be liable to fine which may extend to five lakh rupees: Provided that the
court shall not impose a fine under this section which shall be less than two lakh rupees without
recording in the judgment the reasons for imposing such fine.

Whoever in compliance of the provisions of section 67, fails to appoint a manager shall be
punishable with imprisonment for a term which may extend to three months, or with fine which
may extend to one lakh rupees, or with both.

Subject to the provisions of section 13, except clause (d) thereof, if any employee employed in a
workplace contravenes any provision of this Code or any rules or orders made thereunder,
imposing any duty or liability on employee, he shall be punishable with penalty which may
extend to ten thousand rupees. Where an employee is convicted of an offence punishable as
mentioned here the employer of the establishment shall not be deemed to be guilty of an offence
in respect of that contravention, unless it is proved that he failed to take all reasonable measures
for its prevention.

Social Security Fund

There shall be established by the appropriate Government a social security fund for the welfare
of the unorganised workers to which there shall be credited the amount received from
composition of the offence and the amount of the penalty. The fund may also be funded by such
other sources as may be prescribed by the appropriate Government. The fund shall be
administered and expended for welfare of the unorganised workers in such manner as may be
prescribed by the appropriate Government including the transfer of the amount in the fund to any
fund established under any other law for the time being in force for the welfare of the
unorganised workers.

Explanation: Unorganised worker shall have the same meaning as is assigned to it under clause
(m) of section 2 of the Unorganised Workers Social Security Act, 2008

Effect of law and agreements inconsistent with Code

The provisions of this Code shall have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force or in the terms of any award, agreement or
contract of service whether made before or after the commencement of this Code: Provided that
where under any such award, agreement, contract of service or otherwise an employee is entitled
to benefits in respect of any matters which are more favourable to him than those to which he
will be entitled to under this Code, the employee shall continue to get the former notwithstanding
that he receives benefits in respect of other matters under this Code.

The Code on Wages

The Code on Wages, 2019 (“Code”) codifies and amends the extant laws related to wages,
bonus and remuneration encashed to labour workforce in organised and unorganised sector of
employment. It aims to simplify the implementation, enforcement and harmonise the labour law
regime in India.

The Code subsumes the following enactments upon its enforcement viz. (i) The Payment of
Wages Act, 1936 (“Wages Act”); (ii) The Minimum Wages Act, 1948 (“MW Act”); (iii) The
Payment of Bonus Act, 1965 (“Bonus Act”); and (iv) The Equal Remuneration Act, 1976 (“ER
Act”). 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 labour law framework and its impact on the employment ecosystem of India.

Contrast between the Extant Framework and the Prospective Framework

1.Protection against gender discrimination

Extant Framework: At present, ER Act provides for payment of equal remuneration to men and
women workers performing ‘same work or work of similar nature’, by the same employer and
prohibits discrimination on the grounds of gender against women in the matters of employment
and other related aspects. For the purposes of paying equal remuneration to employees
undertaking ‘same work or work of similar nature’, the employer shall take into consideration
the set of skills, efforts and responsibilities required to be possessed by men and women
employed to do such nature of work.

Prospective Framework: It is quite significant to see that the Code has adopted a gender-neutral
approach whereby prohibiting gender discrimination in relation to matters of recruitment and
payment of remuneration. Once the Code is brought into effect, the employers shall be required
to pay equal rate of remuneration to the employees regardless of their genders, performing ‘same
work or work of a similar nature’. The employer while recruiting employees to carry out, ‘same
work or work of similar nature’, shall also now take into account the employees’ work
experience in addition to the skill, effort, responsibility in relation to terms and conditions of
employment.

2. Fixed rate of wages for overtime work

Extant Framework: Currently, the MW Act casts an obligation on the employer to pay wages
for overtime work to employee, as per the rates prescribed under the MW Act or by the
appropriate government, from time to time. The state specific shops and establishment
legislations provide a fixed rate of wages for overtime work i.e., twice the normal rate of wages.
Such state-based shops and establishment legislations also provide a limit pertaining to
maximum number of overtime hours an employee should not exceed while working for an
employer.

Prospective Framework: It is pertinent to note that the Code has uniformed the rate of wages
for overtime work i.e., twice the normal rate of wages, in relation to minimum wages payable by
an employer to an employee.

3. Consolidated definition of the term ‘Wages’

Extant Framework: Under the current regime, the MW Act, Wages Act, Bonus Act and ER Act
provide different definitions for the term ‘wages’, ‘remuneration’ and ‘salary or wage’
incorporated basis the specific operation of the concerned statute.

Prospective Framework: Interestingly, the definition of the term ‘wages’ has been made
uniform across all the labour codes. As per the Code, the term ‘wages’ means all remuneration
paid in way of salary and allowances and includes ‘basic pay’, ‘dearness allowance’ and
‘retaining allowance’ (if any) and excludes components such as bonus, value of house
accommodation or electricity, water or medical attendance, provident fund contribution,
conveyance allowance, house rent allowance, overtime allowance etc. It is significant to be note
that a proviso has been inserted under the definition of ‘wages’ to construe that the excluded
components cannot exceed one half, or such other percent as notified by the Central
Government, of all the remuneration payable to the employee. In the event such amount exceeds
one half or such percent as prescribed by the Central Government, the same shall be considered
as ‘Wages’. Another proviso has been added in the definition to provide that in the event an
employee is given any remuneration in kind by the employer, the value of such remuneration in
kind which does not exceed 15% (fifteen percent) of the total wages, shall be deemed to form
part of the wages payable to such employee.

4. Expanded coverage in relation to payment of minimum wages

Extant Framework: Presently, under the MW Act, the minimum wage is entitled to employees
undertaking work of skilled, unskilled or clerical nature in a scheduled employment for which
the respective state government fixes a rate of minimum wages.

Prospective Framework: It is interesting to observe that under the Code, the payment of
minimum wages is not only limited to an employee undertaking work of skilled, unskilled,
clerical nature but also includes those employees performing work of supervisory, managerial,
administrative and technical nature. However, no clarity and reference has been provided under
the Code regarding scheduled employment as opposed to the extant framework under the MW
Act.

5. Expanded coverage under payment of wages

Extant Framework: Till date, the applicability of the Wages Act is limited to employees
earning wages up to INR 24,000/- (Indian Rupees Twenty-Four Thousand only) per month.
Moreover, the Wages Act is only applicable to class of employers be it the factories and limited
establishments such as railways, mines, docks etc., as provided under the statute.

Prospective Framework: It is intriguing to note that the Code mandates the payment of wages
to all categories of employers be it a factory, establishment etc., except establishments of
Government of India and respective state governments. However, the Code does not prescribe
any wage limit in relation to the employees unlike the extant Wages Act.

6. Distinction between ‘employee’ and ‘worker’

Extant Framework: Under the present legislations related to wages and bonus, the term
‘employee’ has been defined separately. Further, the term ‘worker’ comes within the ambit of the
defined term ‘employee’ as provided under the current framework populated in these
legislations.

Prospective Framework: It is pertinent to note that the Code distinguishes between the term
‘employee’ and ‘worker’ where, an ‘employee’ means any person (other than an apprentice
employed under the Apprentices Act, 1961) employed in an establishment to perform work of
skilled, semi-skilled, or unskilled manual, operational, supervisory, managerial, administrative,
technical, or clerical work nature. On the other hand, a ‘worker’ means a person employed in any
industry to perform work of manual, unskilled, skilled, technical, operational, clerical or
supervisory nature and excludes (i) an apprentice as defined under Apprentice Act, 1961; (ii) a
person employed in a managerial or administrative capacity; and (iii) a person employed in a
supervisory capacity drawing a monthly wage exceeding INR 15,000/- (Indian Rupees Fifteen
Thousand only).

7. Time limit for payment of wages

Extant Framework: Under the present Wages Act, the time limit prescribed for the payment of
wages depends upon the different sectors of employment. In the event, where an employer
terminates an employee, the wages shall be paid within 2 (two) working days from the date of
termination of such employment. The timeline regarding payment of wages by an employer upon
voluntary resignation by the employee, varies basis the provisions of the state specific shops and
establishments legislation.

Prospective Framework: Notably, the Code has discontinued with the practice of prescribing
timeline for wage disbursement basis the sector of employment. Now, timeline in respect of
payment of wages has been standardised for all employers regardless of their sector. Based upon
the type of engagement, the following payment timelines have been proposed under the Code:

S.No. Types of Engagement Payment Timelines

1. Daily Basis At the end of the shift
On the last working day of the week
2. Weekly Basis
(before weekly holiday)
Before the end of the 2nd (second) day
3. Fortnightly Basis
after the end of fortnight
Before the expiry of the 7th (seventh)
4. Monthly Basis
day of the succeeding month
Note: For any type of engagement, the wage period shall not be more than a month.

Further, in case where an employee has been removed, dismissed, retrenched or becomes
unemployed due to closure of an establishment or has resigned from the services, the wages shall
be paid to such employee within 2 (two) working days of such removal, dismissal, retrenchment
or resignation. The scenario pertaining to disbursement of wages upon resignation of
employment by an employee has now been acknowledged under the Code for which a timeline
has been incorporated which shall be pertinent from an employer’s perspective.

8. Disqualification for bonus

Extant Framework: Under the Bonus Act, an employee shall be disqualified for bonus in case
where such an employee has been terminated on the grounds of (i) fraud; or (ii) riotous or violent
behaviour while on the premises of establishment; or (iii) theft, misappropriation or sabotage of
any property of the establishment.

Prospective Framework: It shall be noted that the Code continues to retain the grounds of
disqualification for bonus as enumerated under the extant Bonus Act and has further
incorporated conviction for sexual harassment as an additional ground for disqualification for
bonus entitlement to an employee.
9. Introduction of Inspector cum Facilitator

Extant Framework: The present legislations grant certain powers to officers and inspectors to
undertake cognizance in the of matters of any non- compliances on the part of the employers and
pass necessary orders, as it may deem fit.

Prospective Framework: It is noteworthy to see that the Code has adopted a neutral approach in
respect of streamlining the processes of compliances to be undertaken by employers. The
introduction of the concept of Inspector cum Facilitator has been predicted to play a very
progressive role to change the dynamics of the labour laws in India. The role of the Inspector
cum Facilitator is not limited to carry out search and seizures, inspection of the records, but shall
also to act as a facilitator by rendering advice to the employers and workers in relation to
compliances of the Code. The Code has also, recognised the significance of the principles of
natural justice wherein prior to initiating a prosecution, the Inspector-cum-Facilitator must give
an opportunity to the employer to comply with the provisions of the Code through a written
direction. The employer is required to comply with the directions within the stipulated time
period in order to avoid any prosecution. However, the opportunity to rectify the breach will not
be provided to an employer in case such employer is found to be a repeated offender of a
violation being committed within a span of 5 (five) years from the date of first offence.
Additionally, the Code also allows inspection electronically and calling of information relating to
inspection through web-based platform.

10. Offences and Penalties

Extant Framework: The current framework prescribes the penalties upon non-compliance of
the provisions of the concerned legislations. The penalties provided under these statutes are
mostly in the nature of fines combined with imprisonment in respect of offences committed by
an employer.

Prospective Framework: A major step has been undertaken in the Code to decriminalised
majority of the offences by making the penalties monetary in nature. However, it specifies that
an employer shall be penalised with imprisonment upon subsequent or repeated violation of an
offence under the Code within a span of 5 (five) years from the date of conviction of first
offence. Penalties vary depending upon the nature of the offence, with maximum penalty
entailing to imprisonment for 3 (three) months and fine up to INR 1,00,000/- (Indian Rupees One
Lakh Only). The table below depicts the list of offences and penalties prescribed under the Code.

S.No. Offence Penalty

Upon employer paying less than the amount
Fine of INR 50,000/- (Indian
1. due to an employee under the provisions of
Rupees Fifty Thousand only)
the Code.
In case an employer repeats the non- Imprisonment for a term 3 (three)
compliance in relation to paying less than the months and/or fine of INR
2.
amount due to an employee under the 1,00,000/- (Indian Rupees One
provisions of the Code. Lakh only)
3. In case an employer contravenes any Fine of INR 20,000/- (Indian
S.No. Offence Penalty
provisions or rules framed thereunder the
Rupees Twenty Thousand only)
Code.
Imprisonment for a term 1 (one)
In case an employer repeats the offence in
month and/or fine of INR
4. relation to contravention of the provisions or
40,000/- (Indian Rupees Forty
rules framed under the Code.
Thousand only)
In case an employer has not maintained or
Fine of INR 10,000/- (Indian
5. has improperly maintained records, registers
Rupees Ten Thousand only)
and notices.

The Code provides an option to compound offence to first time defaulter employees. The
application of compounding shall be filed before the Gazetted Officer as notified by the
appropriate Government, to compound up to 50% (fifty percent) of the maximum fine provided
for under the offence. However, the option of compounding is not available for offences repeated
within 5 (five) years from the date of first offence.

Industrial Disputes Act, 1947

Introduction
Regardless of the level of economic development, policies governing dispute resolution form an
essential part of the labour law framework in any nation. This is due to the fact that complaints
and conflicts are inevitable in any working relationship, and the object of policy is aimed at
providing mechanisms that address these disputes effectively and expeditiously. In recent times
the use of voluntary mechanisms such as arbitration, conciliation, and mediation has become
central to dispute resolution policy. This is because they lack the adversarial element that
ordinary litigation proceedings are characterized by and thus, have been effective in maintaining
relationships during the process of dispute resolution.

The Industrial Disputes Act, 1947 is the primary legislation governing dispute resolution in
India. It was enacted to provide for the investigation and settlement of industrial disputes, to
prevent illegal strikes and lockouts, to provide relief to workmen during lay-off or after
retrenchment or wrongful dismissal. It also provides for the mechanisms of conciliation,
arbitration, and adjudication to promote measures for mutually beneficial relations between
employers and employees.

Applicability & Scope of the Act

To understand the scope of the Industrial Disputes Act, 1947 it is important to understand the
meaning and import of the terms ‘industrial dispute’ and ‘industry’ as defined in the statute.
Section 2(k) of the Act states that the former describes any dispute or difference between
employers and employees, or between employers and workmen, or amongst workmen, which is
connected with the employment or non-employment or the terms of employment or with the
conditions of employment of any person. Section 2(j) of the Act defines the latter as any
business, trade, undertaking, manufacture, or calling of employers and includes any calling,
service, employment, handicraft, or industrial occupation or avocation of workmen.

Therefore, to attract the application of the Act, a dispute would have to occur in an establishment
falling under the definition of industry and would have to involve one or more of the
stakeholders mentioned in the definition of industrial disputes. In other cases, there is no scope
for governmental interference and thus the only recourse is to approach courts or engage in
alternate dispute resolution mechanisms.

It is pertinent to note that the definition of ‘industry’ has been discussed extensively in case laws.
In the landmark case of Bangalore Water Supply and Sewerage Board v. R. Rajappa, the
Supreme Court laid down a three-pronged test to ascertain whether a particular activity was
industrial in nature. If the said activity involved systematic and organized activity, cooperation
between employer and employee, and was carried out for the production of goods and services, it
would be considered industrial in nature. The elements of capital investment and profit motive
were held to be immaterial in the determination of the above question. In the case of an
undertaking engaging in multiple activities, which might or might not be one of the core
activities, the Dominant Nature Test is applicable. It determines whether a specific activity of
any enterprise can be classified as industrial in nature by examining the predominant nature of
the activities conducted by the enterprise and the integrated nature of the departments.

Dispute Redressal Bodies

Industrial disputes may be broadly classified into interest disputes and rights disputes. Interest
disputes are mostly related to the determination of a revised wage level and other conditions of
employment. Whereas, rights disputes relate to the interpretation and application of existing
standards of employment and usually involve an individual worker or group of workers. The
Industrial Disputes Act, 1947 has provided for the establishment of both internal and external
mechanisms to settle industrial disputes. Internal mechanisms include bodies such as the works
committee and the grievance redressal committee.

Works Committee

Section-3 of the Act is statutorily mandated in all industrial establishments having a hundred or
more workmen. It consists of representatives of employees and workmen of an establishment.
The workmen’s representatives and employer representatives should be equal in number. The
object of the works committee is to provide for an internal forum for dispute resolution as a
precursor to litigation or external mechanisms for dispute resolution.

Grievance Redressal Committee

Section-9(c) of the Act requires the employer in every industrial establishment in which fifty or
more workmen are employed to provide for a grievance settlement authority. Every industrial
establishment consisting of twenty or more workmen shall have one or more grievance redressal
committees that shall be composed in equal proportion by members of management and the
workmen. The total number of members in the committee shall not exceed six and shall include
one female member if feasible. The Grievance Redressal Committee shall complete its
proceedings within forty-five days after the receipt of a written complaint by an aggrieved party.
Any workman dissatisfied by the decision of the committee may prefer to appeal against it. The
employer is then obliged to consider the appeal and dispose of the matter within one month from
the date of its institution and provide a copy of the decision to the aggrieved employee.

The Industrial Disputes Act, 1947 provides for the following external mechanisms to resolve
industrial disputes: –

Board of Conciliation & Conciliation Officers

Section 4 and Section 5 of the Act refer to conciliation as a mechanism for redressal of industrial
disputes. The Government appoints Conciliation Officers by way of notification in the Official
Gazette. They can be appointed to a specific area or industry, for a fixed period of time, and are
considered to be acting in an administrative capacity.Their role is to facilitate dialogue between
the parties so as to help them reach a common understanding. The Officer must submit a report
within 14 days of the commencement of the conciliation of an issue/dispute. On the basis of the
same, the Government is empowered to either take the issue further in the form of litigation or
write to the parties.

The Conciliation Board is set up through a Gazette Notification issued by the Government to
resolve industrial disputes amicably by aiding the parties in reaching a settlement. It comprises a
Chairman and two or four members, all of whom must be impartial and must have no personal
involvement in the cases. A number of members are appointed equally for each side of a dispute
and are appointed on the recommendation of the parties. In case the parties fail to reach a
conclusion, then the government appoints the members and proceedings resume. The
Conciliation Board does not have powers to take suo moto cognizance of matters, it may only
engage in a matter when the government refers a case to it. The board must submit a report
within 2 months of the occurrence of a dispute which must be published by the government
within thirty days of receipt of the report. In circumstances wherein the dispute is still not
resolved, industrial tribunal or labour tribunal can be approached.

Court of Enquiry

This court of civil nature under Section-6 of the Act is constituted by the government by way of
notification to inquire into matters connected with or relevant to industrial disputes.

Labour Court

They have been constituted under Section 7 of the Act, consisting of only one person who is
appointed by the government to oversee the proceedings of the court. Qualification of such a
person is that they must have been/are a High Court Judge, or district judge or additional district
judge for at least 3 years or held any judicial office in India for not less than 7 years. Their
jurisdiction extends to matters specified under the Second Schedule of the Act.
Industrial Tribunal

They have been constituted by government notification under Section 7-A of the Act, and one or
more of its kind can be constituted. They are a quasi-judicial body; therefore, they must serve
notice upon the parties to the reference by name before making any award. Their jurisdiction
extends to matters specified in the Second or Third Schedule.

National Tribunal

This quasi-judicial body is constituted under Section 7-B to solve industrial disputes at the
national level, of national importance. Disputes of such nature are taken up at the national level,
in which one or more industries in one or more states are affected. The judge presiding this
tribunal must not be lesser in position than a High Court Judge, must be less than 65 years, and
has the same powers as other preceding tribunals, with respect to the declaration of an award.

The Factories Act, 1948

The Factories Act, 1948, sets the safety standards for workers employed in factories. It is applied to
factories manufacturing goods, including weaving cloth, knitting of hosiery and other knitwear, clothing,
and footwear production, dyeing and finishing textiles, manufacturing footwear, etc.The Factories Act,
1948, regulates the working hours for all workers. According to the Act, a working week should not
exceed 60 hours. The objectives of this Act are to regulate the hours or working time in factories so that
workers are not overworked or unduly exhausted. The Act’s main objectives are also to protect workers’
health and safety.

The Factories Act, 1948, regulates the hours of work and

minimum wages
The Factories Act, 1948, mandates the payment of minimum wages to the workers by
prescribing a fixed pay rate. An employer shall pay their employees at least the prescribed
minimum wage rate. If an employee is paid less than minimum wage, the employer should pay
that employee at least what the law requires. This Act reminds employers that any failure on
their part to comply with its provisions will have serious legal consequences.

The Act requires employers to allow a weekly holiday to their workers. It further makes it
obligatory for the employer to provide proper sanitary facilities and a clean potable water supply
in the factory or workplace. Strict action will be taken against the employer if they fail in
providing these facilities to the workers.

Employers are also required to set up first aid boxes in their factory, store first aid records, and
ensure proper arrangements for transporting injured workers to a hospital or in-house medical
facilities.
Apart from these, the Act has several relevant provisions defining the duty of an employer who
has in-house medical facilities and the duty of a doctor who is an official medical officer at the
factory. The Act also defines the procedure to be followed if a complaint of any kind is received
by or made to the government’s labour department.

The Factories Act, 1948, also provides for implementing some administrative measures
regarding which subsequent governments have framed appropriate rules.

Some of these measures are as follows:

1. The Factory Act, 1948, has provisions for the constitution of a Child Labour Committee in every
factory. This committee should consist of employers, workers, representatives from local
authorities and a medical officer. The committee is responsible for regulating and controlling
employment in the age group of 14 to 18 years at factories where more than 20 persons are
employed.
2. An industrial dispute between the employer and worker(s) can be resolved by a Conciliation
Officer appointed by the government. The authority of this officer is to conciliate and not to
mediate.
3. The governments appoint labour officers to look after factory workers’ interests; this officer is a
government official. The labour officers must see that no violation of any provisions of the
Factories Act, 1948, takes place at any factory in their territories.
4. The state governments or local authorities have set up welfare funds in every factory. This fund
may be established for general or specific purposes depending upon entrepreneurs’ or local
authorities’ initiatives.

Objectives of Factories Act, 1948

 To protect the health and safety of workers
 To ensure that factories adhere to global best practices in the factories
 To provide a fair and decent livelihood for all working-class people
 To reduce any social or industrial tensions

Provisions of Factories Act, 1948

Factories Act, 1948, limits work hours to 48 hours a week, and overtime work should not be
more than nine hours a day. Factory Schedule Rules specify that a limited working day shall not
exceed ten consecutive hours; this regulation does not apply during a public holiday or when an
emergency requires immediate action and substantial loss has occurred.The Factories Act, 1948,
sets the safety standards for workers employed in factories. It is applied to manufacturing goods,
including weaving, knitting of hosiery and other knitwear, clothing and footwear production,
dyeing and finishing textiles, etc.
Period of application
The Factories Act was implemented in India following the general elections held in 1951 for the
Legislative Assembly of States and Union Territories that fall under the Indian Union, with
effect from June 15, 1951.The Factories Act, 1948, was further amended in 1951, 1960, 1961,
and 1972. In addition to this amendment, the Rules of 1951, 1960, and 1961 have been amended.
The Factories Act was applied to the newly formed States in 1965 by the Chief Secretaries of
these States.It applies only to certain factories employing ten or more workers (including
apprentices).

Conclusion

The Factories Act was passed in 1948 by the Parliament of India. The Act is landmark legislation
aimed at deriving maximum profit for the industrial sector in India. The Factories Act is also
known as the Factories (Amendment) Act, 1951, and it has been amended four times since its
inception to meet the needs of India’s industrial scenario and business practices. The Factories
Act, 1948, falls under the category of Labour Laws in India.

Analysis of Recent Amendments made in Labour Laws

Introduction
The genesis of labour law is to provide effective solutions to the clash between the rights of
labourers and the existing socio-economic conditions which are violating said rights. In this
context, India’s labour law regime is very comprehensive, given that there are approximately 16
legislations which govern labourers in the country. These legislations were mainly brought into
force during the British colonial rule in India, and most of the said legislations are still in force
throughout the country, despite it being around 76 years since India attained independence.

In India, the State is duty-bound under the Constitution to ensure welfare of workers and
labourers. The duty of the State to formulate these laws is enshrined in Part-IV of the
Constitution of India 1950 which deals with the Directive Principles of State Policy (“DPSP”),
specifically through Articles 39, 41, 42, 43, 43A and 54. The Constitution has categorized labour
as a subject in the concurrent list (Entries 22 to 24) which therefore enables both the Central
Government and State Governments to legislate on the subject. Furthermore, international
conventions of the International Labour Organization (“ILO”) are also a major source for
formulating many of these laws. However, India has only ratified four of the eight core
conventions of the ILO, despite the positive influence of the ILO on India’s labour policy and
organizations has been recognized as long ago as in 1956 (V. K. R. Menon, Citation1956, pp.
551–571). This has many implications, but the biggest implication that arises is the Legislature’s
seeming lack of involvement qua recognition of the dynamics of workers’ rights and accordingly
formulating new legislations or updating existing ones so as to bring about correspondence with
the contemporary social scenarios.
Albeit Indian labour law is comprehensive, there are certain shortcomings in its applicability to
different sectors, which undermine the objectives of these laws. Notably, the Indian regime has
also been unable to address the issues faced by employees in the Information Technology (“IT”)
sector, issues which are blatant violations of the provisions of labour law legislations, especially
in recent times. These issues still persist despite the recent “reform” in India through the
consolidation of labour law legislations into four “Labour Codes”, viz., The Code on Social
Security 2020 (“SS Code”), the Industrial Relations Code 2020 (hereinafter “IRC”), The Code
on Wages 2019 (hereinafter “Wage Code”) and the Occupational Safety, Health and Working
Conditions Code 2020 (hereinafter “OSH Code”). Notably, these Labour Codes have yet not
been officially notified, which implies that they are not yet enforceable as law. This is crucial
because an analysis of the various provisions of the four Codes in the pre-notification stage
would result in a higher scope for spotting lacunae and accordingly suggest methods to remedy
the same, which is the ultimate objective of this article.

This article seeks to achieve the aforementioned objective in a two-fold manner viz., it takes into
account the viability of the new Codes in both the unorganized and organized sector (through an
analysis of the IT sector) and then proceeds to enlist various solutions by way of modifications to
the Codes as they exist.

This article further has a dual scope, whereby it addresses both generic and specific impacts of
the Labour Codes. Incorporation of the IT sector analysis alongside the analysis of the impact of
the four Codes on the unorganized sector is being done for two reasons: (a) such analysis would
lead to a more holistic understanding of the various issues faced by the respective labour classes
and the remedies for the same which have been provided to them under the new regime and (b)
the IT sector in India has assumed a mammoth status ever since 2012, when its aggregate
revenues had crossed US$ 100 billion and through its exponential growth in the years that
followed (Bhattacharjee & Chakrabarti, Citation2015); however, the law governing the
employees in the sector has remained static and this position remains unchanged even after
introduction of the new Codes.

Labour law in India—differentiating employees and

workers
Under the Indian labour law regime, three key terms on which the applicability of the laws are
based are: “employee”, “workmen”; and “worker”. In order to better understand the labour law
regime in India, it is imperative to differentiate between “workman” and “employee”, especially
from the lens of the Industrial Disputes Act 1947.

Pre-Labour Codes

Before the Codes were introduced, the differentiation between workman and employee under the
Indian labour law regime was primarily left to the Courts, as the Legislature did not provide for
any express differentiation in that regard, in the ID Act. However, the definition of “employee”
was separately provided for under the Employee State Insurance Act 1948, but even that
definition is specific to the scope of that Act and cannot be used interchangeably with other
labour-law legislations.

The definition of “workman” under the Act excludes certain classes of employees including
those in a managerial or supervisory capacity, with an income lesser than Rs. 10000/- per month.
Interpreting this definition, Indian Courts have over the years identified key factors to be taken
into consideration when determining whether or not an employee is a workman under the ID Act.
An important judgement in this regard is Arkal Govind Raj Rao vs. Ciba Geigy of India Pvt.
Ltd.,Footnote1 in which the Supreme Court held that the basic and primary duties of the
employee are to be taken into account, which would exclude any additional duties. The
observation is in-line with clause (iii) of Section 1(s), which excludes employees in an
administrative capacity from the purview of workman under the Act.

Notably, the Courts have also considered whether or not different types of employees are
included or excluded from the purview of “workman”; these types include employees in a
supervisory capacity as held in G.M. Pillai v. A.P. Lakhmikar Judge,Footnote2 part-time
employee as recognized in Bombay Dyeing and Manufacturing Co. Ltd. v. R.A. Bidoo,Footnote3
employees in a technical capacity, etc.

Therefore, under the old regime, it was the Courts and not the Legislature which played a key
role in determining which classes of employees would be considered “workmen” under the Act.
This determination was crucial because the existence and enforceability of a myriad of rights by
an employee, was contingent upon such determination.

However, it is not the case that the Legislature has absolutely not taken any step with respect to
clearly delineating workmen and employees. One instance of legislative recognition of this
difference is the 2009 Amendment which was made to the Workmen’s Compensation Act 1923,
through which its name was changed to Employees’ Compensation Act. Penfold (Citation2009)
was enacted to give effect to the recommendations of the Second National Commission on
Labour which was established in 2002 (Second National Commission, Citation2002). Inter alia,
the report recommended changing the word “workmen” in the short title of the Act to
“employee” in order to extend legal protection to employees who are excluded from the ambit of
“workman” under labour law legislations (Second National Commission, Citation2002). By
enacting this amendment, the Legislature had shown its willingness to provide an express
differentiation between employees and labour. Unfortunately, this differentiation was limited
only to the aforementioned Amendment Act and no step in that regard was taken in the future,
which led to ambiguities persisting as to the scope of many other labour law legislations in the
country.

Since this article revolves around the new Labour Codes, it is imperative to examine whether or
not the Labour Codes have taken a step in the direction of expressing legislative differentiation
between workmen and employees.

Post-Labour Codes
With the introduction of the Labour Codes, the focus has seemingly shifted from the Courts to
the Legislature. This is because the Codes have uniformly adopted the definitions of “employee”
and “worker”; with the only exception being the Social Security Code, which does not contain
the definition of “worker”. Under the Code, an employee has been defined as a person working
in an establishment, other than Apprentices, employed on wages to do inter alia, skilled, semi-
skilled and unskilled work, whether terms of employment are implicit or express. As opposed to
a single definition of worker, the SS Code differentiates between different types of workers
(unorganized worker, gig worker, etc.) and defines them separately.

Thus, it can be inferred that the bases for distinction between an employee and a workman have
been retained in the new labour Codes, with higher emphasis being laid on the form of
remuneration received by an employee as a factor.

In this context, the definition of “wages” under the Codes becomes relevant. As per said
definition, wages mean all remunerations including salary, allowances, etc., expressed in
monetary terms or capable of being expressed as such and which is paid to a person upon
fulfillment of the necessary conditions in his employment, whether such conditions are expressed
or implied. Wages also include basic pay, dearness allowance and retaining allowance but do not
include inter alia, bonus, conveyance allowance, etc.

Although the above definition per se is not problematic, it is the provisos to the same which
cause confusion as to the applicability of wages. This is because both the clauses to the
subsections of the provision as well as the provisos dealing with calculation of wages, equal
remuneration to genders, etc., mention only the wages paid by an employer to an employee. Due
to this, either the differentiation between an employee and a worker becomes redundant or it is to
be understood that “wages” are not applicable to workers. This perhaps also explains the poor
implementation of these laws, especially such as laws on equal remuneration, which have not
done an adequate job in minimizing the large wage differential between men and women
(Agarwal, Citation2014, pp. 329–340). Therefore, to uniformize the definition, either of the
following modifications have to be made:

1. The term “wages” must be specifically attributed to employees as well; and

2. The provisos need to use the word “worker” in place of “employee” so as to avoid
ambiguities.

It is further recommended that the current basis for distinction between the two terms be shifted
to a sectoral basis; viz., on the basis of whether the person is employed in the organized or
unorganized sector. The reasons for this proposition have been elaborated in the subsequent
sections of this article, when dealing with the provisions of the SS Code which deal with the
unorganized sector.

In this regard, the laws of the United Kingdom can be used as a reference point to incorporate
separate definitions of employees and workers. Under the UK labour law regime, there are a total
of four distinct definitions pertaining to who are covered under the regimes; they are worker,
employee, jobholder, apprentice (Deakin & Morris, Citation2019). The laws also define what an
“employment relation” is and this definition covers a separate set of rights (Deakin & Morris,
Citation2019). Thus, it can be seen that under the UK laws, there is a clear demarcation of
various types of workers and employees and the rights of each type have been safeguarded and
provided for through legislative enactments. Under this regime, workers are recognized to be the
more vulnerable class who require higher degrees of protection as opposed to employees and
thus the provisions pertaining to workers have more weightage than compared to the provisions
relating to employees or the other two aforementioned types, as was recognized in Lawrie-Blum
v. Land Baden-Württemberg.Footnote4 Notably, the differentiation incorporated under the UK
regime is also in accordance with the themes which are recognized by the ILO for comparing
labour law regimes of different countries (Almutairi, Citation2020).

Given the commonalities between Indian laws and UK laws, there is very little doubt that
modifying the present definitions under the Indian labour laws to make them similar to those
under the UK laws would benefit all stakeholders involved. Such a step would also lead to the
Legislature finally providing an express differentiation between employees and workmen, a
move which has been long pending since the aforementioned Amendment Act passed in 2009.

Interplay between labour law, social security and the

unorganized sector
Before the labour laws in India were consolidated into the Labour Codes, most of the legislations
under it were social-security-centric. These legislations were repealed and replaced by the SS
Code, under Section 164; they include:

1. The Employee’s Compensation Act 1923 (previously known as the Workmen’s

Compensation Act, 1923);
2. Employee’s State Insurance Act 1948;
3. Employee’s Provident Funds and Miscellaneous Provisions Act 1952;
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959;
5. The Maternity Benefits Act 1961;
6. The Payment of Gratuity Act 1962;
7. The Cine-Workers Welfare Fund Act 1981;
8. The Building and Other Construction Workers’ Welfare Cess Act 1996; and
9. The Unorganized Workers’ Social Security Act 2008.

From their titles itself, the social character of these legislations can be inferred. In other words,
the long titles of these Acts read with their respective Preambles clearly highlight that these
legislations all have one aspect in common viz., all of them have social justice and social welfare
as underlying objectives for their enactment. Correspondingly, their objectives too focus on
social security. Therefore, it is not unreasonable to expect that the SS Code, which is a
consolidation of all these aforementioned legislations, would rectify all the shortcomings in said
legislations, so as to further their objectives without any hindrances.

The primary shortcoming (which the SS Code has unfortunately not done much to rectify) is that
all these social security legislations were practically not applicable to the unorganized sector,
because of the restrictive definitions contained therein. For instance, establishments in the
unorganized sector rarely have persons who meet the essentials in the definition of an
“employer” due to the unique natures of work in the sector.

These issues are also prevalent in another legislation which specifically pertains to the
unorganized sector viz., the Unorganized Worker’s Social Security Act 2008 (hereinafter “2008
Act”). The Act does not define the term “worker” but only defines what the unorganized sector is
that too in arbitrary and restrictive terms. The Act merely defines “unorganized worker” and
applies the definition to all workers in the sector.

Unfortunately, the definitions contained in this legislation, along with the provisions of the same,
have simply been replicated into the SS Code without any significant amendment, which means
that the shortcomings in the 2008 Act, along with the shortcomings in the other relevant
legislations, have been consolidated into the said SS Code. Therefore, in order to understand the
issues in the applicability of social-security legislations (now the mentioned Code), it is
necessary to elaborate upon the issues in the Code:

1. Arbitrary and restrictive definition of the unorganized sector: The definition of

unorganized sector has been copied from Section 1(l) of the 2008 Act and pasted as
Section 1(85) of the Code. The definition classifies unorganized sector as an “enterprise
owned by individuals and self-employed workers engaged in production or sale of goods
or providing service of any kind whatsoever, and where the enterprise employs workers,
the number of such workers is less than ten.” “Unorganized worker”, as per Section 1(86)
of the Code, also includes home-based, self-employed or a wage worker.

Notably, the definition of unorganized sector does not relate the sector to unorganized
workers. A plain reading of the provision gives the meaning that unorganized sector
comprises of individual or self-employed workers who provide goods or services; it does
not mention wage workers, who are considered unorganized workers as per the definition
in subsection. (86)

Furthermore, the provision arbitrarily places a restriction of a maximum of “ten” workers

being employed by an enterprise, for it to be considered unorganized. This restriction is
problematic because it raises a mere technicality on which basis the benefits to an
enterprise which is actually in the unorganized sector, can be denied to it.

2. Definition of “gig worker”: Under Section 1(35) of the Code, a gig worker is “a person
who performs work or participates in a work arrangement and earns from such activities
outside of traditional employer-employee relationship”.

A bare reading of this provision gives the impression that it is the definition of a worker
in the unorganized sector. By separately and inadequately defining the terms
“unorganized sector” and “unorganized worker”, the SS Code has effectively stopped the
applicability of the definition of a gig worker to the unorganized sector, which therefore
means that the benefits available under the SS Code can be enjoyed by gig workers, but
not workers in the unorganized sector.
 Notably, this definition could also have been modified based on the definition of “badli
workers” contained in the Explanation to Section 25C of the ID Act. By not doing the
same, badli workers have been deprived of the benefits under the Code.

3. Non-implementation of Section 5: Section 5 of the Code, borrowed from Chapter-III

(comprising Section 4) of the 2008 Act, provides for the establishment of the National
Social Security Board for Unorganized Workers and State Unorganized Workers’ Board.
In the 14 years since the enactment of the 2008 Act, this National Board has not yet come
into existence. It is hoped that the Board will be constituted expeditiously, post-
notification of the Codes.

In fact, one of the only ten State Boards constituted under this Act which is presently
functioning is the Uttar Pradesh Unorganized Workers Social Security Board, which
caters only to the Northern State of Uttar Pradesh (UPSSB). Twenty-three other states
had still not established the Board as of 2013, i.e., five years after the 2008 Act was
enacted. Therefore, by not establishing the National Board and not ensuring the
establishment of State Boards by all the States, the objectives of the 2008 Act stand
defeated.

Moreover, the functions of the National Board enumerated under the mentioned
provisions give it only an administrative and supervisory character, which are insufficient
for it to perform actions which will actually benefit the unorganized sector.

4. Central Government Schemes under Section 45: Section 45 of the SS Code enables the
Central Government to frame schemes for unorganized workers, gig workers and
platform workers. However, the enacting of such schemes is not a mandate under the SS
Code but has been left to the discretion of the Central Government, by the use of the
word “may” to qualify the Central Government’s power to enact said schemes.

By leaving such an important task to the discretion of the Central Government, the SS
Code yet again puts its main objectives in jeopardy, as the lack of a mandate undermines
the assurance of the formulation of such schemes. It is therefore imperative that this
position be changed and a more forceful mandate be imposed on the Central Government,
in furtherance of not only the objectives of the Code, but also of the Constitutional
provisions in that regard.

Moreover, Chapter IX of the Code, particularly Section 109, provides for the
implementation and funding of the aforesaid schemes. Subsection (4) mandates the
Central Government to provide for matters necessary to implement the provisions of the
schemes including its scope, authority, etc. However, this mandate becomes irrelevant
when the formulating of such schemes itself is a matter of discretion. Therefore, although
this provision is effective, it cannot be given true effect unless and until the
abovementioned changes are brought about.

5. Registration Procedure: The registration procedure envisaged under Section 113 of the
SS Code has been borrowed from Section 10 of the 2008 Act, with a few additions being
 made. In essence, the provision provides that in order to avail the benefits under the SS
Code as well as the schemes formulated by the Central Government for the unorganized
workers, they are to be mandatorily registered. Additionally, under subsection (1), the
person is to be older than 16 years of age and also must have submitted a self-declaration
electronically or otherwise. The remaining procedure entails the workers to make an
application for registration to the Central Government by furnishing inter alia, his
Aadhaar card.

Given the state and nature of the unorganized sector, this registration procedure only
brings unnecessary complexities and bureaucracy into a legislation whose effective
implementation would be done if such complexities are avoided in the first place.
Moreover, the provision fails to consider the underlying objective of the Code, i.e.,
provision of social security, by subjecting it to fulfillment of a bureaucratic condition.

Although it is understood that registration is necessary to ensure that the benefits of the
schemes under the SS Code are not misused, the procedure can be simplified and
extensive focus has to be laid on its implementation, lest is becomes like the case of the
National Social Security Board.

Apart from the aforementioned issues with the SS Code as well as the 2008 Act, another glaring
issue relates to the National Social Security Fund, which was envisaged to be established, in the
budget for the Financial Year 2010–2011. Although its establishment is to fulfill laudable
objectives, the Fund has served no real purpose, especially during the lockdowns induced due to
the Pandemic. Furthermore, studying the audit reports of the Comptroller and Auditor General of
India for the Financial Years 2010 to 2017 reveals that the Fund is mismanaged and not utilized
for its true purpose (Upadhyaya, Citation2020).

Therefore, the above analysis of the relevant provisions of the Social Security Code, which are
mere replications of the 2008 Act, reveal that there are numerous issues with the applicability of
social-security legislations in India to the unorganized sector. The most concerning aspect is that
many of these issues arise from the shortcomings within the provisions of the SS Code itself,
something which requires immediate rectification. Other issues mentioned arise from lack of
implementation of provisions of the Code, whose implementation can actually benefit the
workers in the unorganized sector.

Indian labour law and the pink-slip trend in IT sector

As seen in the preceding section of this article, the question as to whether a particular industry or
a particular employee would fall within the meaning of “industry” and “workman” under the
provisions of the ID Act was determined on a case-to-case basis in the pre-Labour Code regime.
However, such determination was not made expressly in any judgement of the Supreme Court, in
the context of the IT sector.

However, IT employees were expressly recognized to be a “workman” under the ambit of the IT
Act by the Tamil Nadu Government and the Karnataka High Court. The Tamil Nadu
Government through a circular in 2016 declared that employees in the IT sector will be covered
by the provisions of the ID Act, in the context of formation of trade unions (Singhania and
Partners, Citation2016). The Karnataka High Court, in The Commissioner of Income Tax and
Anr. v. Texas Instruments India Pvt. Ltd.Footnote5 held that an employee in the IT sector would
be considered a “workman”, for the purpose of computing tax exemptions under Section
80(JJAA) of the Income Tax Act, 1961.

However, given that both the above circular and judgement are only applicable to Tamil Nadu
and Karnataka, respectively, they cannot be taken into account when analyzing the entire Indian
legal regime as a whole.

Therefore, it would be crucial to firstly identify which legislations expressly apply to the IT
sector, based on which the validity of the Pink Slip trend and its future in Indian IT sector can be
analyzed.

Legislations applying to the IT sector

India’s labour law regime is designed ambiguously in respect of its applicability to the Indian IT
sector, whereby many legislations in the regime do not apply to the IT sector. Some of the
legislations which supposedly apply are:

The Trade Unions Act 1926: Section 1(g) of the Act defines “trade dispute” and the definition
also defines “workman” as “all persons employed in trade or industry whether or not in the
employment of the employer with whom the trade dispute arises”. The right of employees to
form a trade union is constitutionally-backed and has also been recognized by Courts.
Interestingly, trade unions were formed in Indian IT companies in the past (R. Menon,
Citation2021). Four states in India have recognized that the Act applies to IT companies within
their territories (Sinha, Citation2019). Furthermore, organizations such as Union for ITES
Professionals (UNITES), the IT Professionals Forum (ITPF), and the Young Professionals
Collective (YPC) have been recognized as pioneers in the professional mobilization of India’s IT
professionals, as early as in the year 2010. (Stevens & Mosco, Citation2010)

The Payment of Gratuity Act 1936: The definition of “employee” given under Section 1(e) of
this Act is a “means and includes” definition which is inclusive in nature and which extends to
inter alia, all shops and establishments to which the Act applies. Under Section 1(3), what
constitutes shops and establishments has been left to the relevant legislations of the States.

The Minimum Wages Act 1948: Under the First Schedule to this Act, the employments to
which the Act extends have been enlisted. The definition of employee as provided under Section
1(i) is largely inclusive and expressly excludes members of Air Forces of the Union from its
purview.

The Sexual Harassment of Women (Prevention, Prohibition and Redressal) Act 2013: This
legislation, which was brought in force to give legislative recognition to the guidelines of the
Supreme Court in Vishaka v. State of Rajasthan (AIR 1997 SC 3011),Footnote6 also has an
inclusive definition of “employee”, defined under Section 1(g). However, this Act faces a
dichotomy qua its implementation, whereby although it is a labour law legislation (usually
implemented by the Ministry of Labour and Employment), it is implemented by the Ministry of
Women and Child Development (Chigateri, Citation2021). Naturally, this dichotomy can have
adverse implications with respect to presence of the provisions in the new Codes and their
implementation.

While the inclusive definitions under the abovementioned legislations give a prima facie view
that they are also applicable to IT companies, in the absence of legislative recognition or a
binding precedent of the Supreme Court, this view cannot be taken to be the correct position of
law, as there is still scope for interpretation of the provision.

Specific to the context of pink-slips, the relevant legislation is the ID Act, which also seems to
prima facie be applicable to the IT sector. However, this assumption cannot be treated as
unequivocally true, in the absence of express laws or precedent. This is despite the fact that the
Supreme Court in Bangalore Water Supply and Sewage Board v. A. Rajappa and Ors.
extensively widened the ambit of “industries” within the Act by propounding the triple test.

The triple test laid down in Bangalore Water Supply and Sewage Board to identify whether the
Act applies to an industry is as follows:

1. Presence of systematic activity irrespective of profit motive;

2. Systematic activity should result from co-operation between employer and employee; and
3. Organizations which have elements of philanthropy cannot be out of the ambit of
industry.

Although this test can be used to gauge applicability of the ID Act to the IT sector, there is still
ambiguity as to such applicability. Moreover, to better understand why legislative or judicial
recognition is much-needed in this context, the assumption of its inapplicability will have to be
taken to be true.

The direct consequence of this assumption being true is that the Pink Slip trend would continue
to be rampant, without any checks or balances to counter the same. As it is, in the status quo,
private sector employees receive lumpsum amounts at the time of their retrenchment; the
calculations behind these amounts and whether or not they are inclusive of gratuity, retrenchment
compensation, etc., are best-known to the employer and are ambiguous to the employees.

Worse, employees will also not be able to seek compensation for their lay-off or retrenchment or
challenge the amount paid to them by the employer before any Court or Tribunal, because
whether or not the rights under the ID Act are enforceable by them, is ambiguous. When this
situation arises, employers find it easier to lay-off or fire their employees en masse, a trend
which is rampant in recent times (Kashyap, Citation2023). Therefore, the only effective counter
to this issue is to include IT employees within the ambit of “workman”; three benefits arise out
of such inclusion:

1. The employees will be enabled to seek retrenchment compensation and the remedies
available thereunder in cases of insufficient compensation;
 2. There will be greater transparency to the employees regarding what compensation or
benefits they are being offered at the time of retrenchment; and
3. In case of mass lay-offs, each of the employees or all the employees together will be
empowered to approach the relevant judicial fora if aggrieved.

Absence of an express legislation or provision which extends the benefits under the IT Act (as
well as other labour law legislations) to the IT sector would imply that the State has contravened
Directive Principles of State Policy (hereinafter “DPSPs”) enshrined under Articles 39 (Certain
principles to be followed by State), 41 (Right to work, education and public assistance in some
cases), 42 (Provision of just and humane conditions of work and maternity relief), 43 (Living,
wages, etc., for workers) and 43A (participation of workers in management of industries) of the
Constitution of India 1950. Although DPSPs are not enforceable before the Court of law, the
Apex Court in State of Madras v. Champakam DorairajanFootnote7 has recognized its
significance and its need to run subsidiary to the Fundamental Rights guaranteed under the
Constitution.

In light of the State’s duties as well as the ramifications of non-applicability of ID Act to the IT
sector, express legislative or judicial precedent becomes extremely crucial for employees in the
sector to be able to enforce their rights, especially in case of those employees who have been
handed the pink slip.

Post Labour Codes

In the light of the provisions of the ID Act not being of any considerable use to IT sector
employees who receive pink-slips, the next consideration would be on if and how this position
has changed under the Labour Codes. The Code that becomes relevant here is the IRC, which
repealed the ID Act. Unfortunately, as was the case with the Social Security Code, provisions of
the ID Act have simply been replicated in the IRC.

This means that the following issues are still persisting in relation to IT sector employees:

1. Lack of awareness on Labour Laws which can assist them at least in bringing about
representations regarding their pink-slips;
2. The law itself being unclear about its applicability to the IT sector; and
3. Employees being deprived of possible remedies against pink-slip.

From the above analysis of the relevant provisions of the ID Act and the Labour Codes, it is clear
that the pink-slip trend in India’s IT sector has not yet been viewed from the legislative lens,
which is extremely problematic, as the trend by itself defeats the very objectives of labour laws.
This trend becomes especially concerning in light of the plight suffered by IT sector employees
during the COVID-19 pandemic, when retrenched or laid-off employees were hesitant to seek
legal redressal against their termination from employment, as shown in a study conducted in
December, 2020 (Dash & Dash, Citation2020, pp. 703–716). All these issues are further
magnified by inter alia rampant corruption, poor execution of the laws, nascency of the sector
and other factors, which are also seen as reasons for the “off-shoring trend” to arise in India,
which is however not within the scope of this article (Penfold, Citation2009, pp. 91–106).
Although in case of job losses, the IRC does provide for benefits under the Atal Bimit Vyakti
Kalyan Yojana, these provisions have to see from the definition of “worker” in the Code, which
has been discussed in the preceding sections. When seen from that perspective, the substantive
value of this scheme becomes doubtful.

The position of IT employees under the Indian labour law regime is inferior to that of employees
under the UK regime. For instance, laws in UK focus on areas such as privacy of IT employees,
which is an aspect not at all provided for under Indian law (Jeffery, Citation2002). Therefore, it
is evident that Indian legislations were always lacking in provisions pertaining to protection of
rights of IT employees. While the new Labour Codes could have dealt with this issue in many
different ways, it is unfortunate that no such initiative has been taken by the Legislature, which
therefore places the rights of Indian IT employees at an inferior stage to IT employees in foreign
jurisdictions.

Labour Codes—have they achieved their objectives?

The analysis of the provisions of the SS Code and the IRC reveals that the provisions are in no
way shape or form an improvement from the pre-existing legislations. In fact, all that the Labour
Codes have done in the name of consolidation is to actually replicate the provisions of the
previous legislations.

This therefore means that not just the effective provisions from the previous legislations have
been carried forward into the Codes, but even the ineffective provisions which needed
modifications have been incorporated into the Codes, as argued hereinabove.

A booklet published by the Ministry of Labour and Employment of the Government of India on
the new Labour Codes makes it evident that the primary objective of the Codes is to provide an
escape to the employees from the “web of legislations”, which made them file multiple forms for
claiming even a single benefit (Kashyap, Citation2023).

It is acknowledged that the objectives behind the Codes are laudable. In fact, by consolidating 29
labour law legislations into four Codes, the primary objective of the Codes is seemingly fulfilled.
However, the long titles of the Codes clearly specify that the Codes are for both the amendment
and consolidation of the laws. It is in the amendment-aspect that the Codes have proved
ineffective and hence need to be revised. More particularly, the amendments need to be done in
the area of definitions in the Code, especially in terms of properly differentiating employees and
workmen as well as recognizing and defining other classes and sub-classes of labour.

Even in terms of consolidation, all the Labour Codes have seemingly done to categorize the
legislations into four classes and accordingly compile them in that order; here, compilation
cannot be equated to consolidation, which therefore means that the Labour Codes have not met
even their primary objective.

Furthermore, based on the previous official communications made by the Ministry of Labour and
Employment of the Government of India, it seems unlikely that the Codes would be notified
sooner (Press Information Bureau, Citation2022). This effectively means that the provisions of
the Codes still can be modified so as to bring about a revolutionary shift in the Indian Labour
Law regime (Desai Associates, Citation2022). Based on the above analysis, it is clear that the
modifications which are required to be made are largely with respect to the applicability and
extent of the Codes, whereby the Codes are to extend to all industries, notwithstanding the sector
they belong to, so that the underlying objects behind enacting the Codes are fulfilled.