The Central Government in its effort to rationalize labor law and to brought different kind of employees and workers and their working conditions under a single code decided to amalgamate 13 labor laws consisting of around 600+ provisions into one single Code with 143 provisions. The Code has been introduced to prescribe uniform standards, reducing paperwork, promoting ease of doing business and reducing administrative bottleneck such as multiple registrations.

The Code will mainly cover majorly cover the Factories Act, Contract Labor Act, Inter-state Migrant Workers Act and such other 10 other labor laws and will come into effect from a date as notified by the Central Government.

Broadly, most of the above-referred labor laws are reasonably old and are indispensable to the regulated working populations and governs the conditions of working of worker at any particular establishment and/or worksite.

This article provides an overview of the key modifications which will be introduced by the Code.

Expansion and harmonization of Definitions

The definitions under the Code expands the definition of “Contract Labor” and now includes the inter-state migrant labors who are employed by the Principal Employer. Similarly, the definition “Family” will now include grandparents who shall be eligible for welfare provisions of the worker.

In addition to this, the Code has also harmonized the definitions of Employee and Worker and has further extended the threshold limit for the sales promotion employees from INR 1600 per mesem to INR 18,000 per mensem.

Threshold limit of Factories has also expanded to 20 or more workers with aid of power and 40 or more workers without aid of power but the same shall exclude railways, running shed or hotel, restaurant or an eating place.

The definition and scope of Inspector also expanded to Inspector-cum-Facilitator and also expands the scope of function of an Inspector.

New definitions such as Banking Company, Core Activity and Wages has also been inserted in the Code.

Registration and Licenses

Central Government in it approach towards Digital India, vide the Code has introduced E-Registration Process wherein any establishment to which the Code applies can make an electronic application for getting its establishment registered. The employer shall also be allowed to electronically submit an intimation to the authority about any change in its ownership and/or management.
Establishments such as factories, mines and those hiring Beedi and Cigar workers will be required to obtain additional licenses for its operations.

Additionally, Registers, Records and Returns (as prescribed by appropriate Government) can now also be maintained electronically and even the Inspector cum Facilitator (erstwhile Inspector under the existing law) shall have an authority to perform web-based random inspection for reviewing and verifying of online documents submitted by an employer.

Welfare Facilities, Working Hours and Annual Leave
The Code has a specific Chapter in relation to the Welfare Activities which every employer/establishment needs to maintain in its establishment.

The activities shall primarily include:

1. Adequate and separate washing facilities for men, women;
2. Separate locker rooms and bathing facilities for men, women and transgender;
3. Provision of seating for the employees who are obliged to work in standing position;
4. Canteen facilities wherein 100+ employees, including contract labor are normally working (previously 250 employees)
5. Medical examination of every worker on specific intervals for the mine workers; and
6. Provision of adequate first-aid boxes which should be readily accessible to all workers during working hours

Additionally, the Government also have a power to add any such other welfare measures to any establishment for improving the standard of living of workers including mandating the provision for Crèche facility for use of children under age of 6 years of employees, wherein 50 or more workers are working.

In relation to the Working Hours, the Code states that no worker shall be allowed to work for more than eight hours and any female workers shall also be allowed to work in night shifts (i.e. after 7:00 PM and before 6:00 AM). Additionally, the Code has prescribed maximum 144 hours of work for a working journalist during a period of four consecutive weeks.
The workers working in a mine shall be allowed to work for a maximum 10 hours in a day inclusive of overtime.

The Code provides that, any worker who works who works in an establishment or class for more than the prescribed working hours shall be eligible for overtime and the same shall be calculated at twice the rate of wages for the additional work carried out the worker.

Provisions relation to Inter-State Migrate Workers

The Central Government in order to address the concerns of contract- labor and inter-state migrant workers has addressed both of them in different parts in the Code wherein, the Code has specified that Part I of Chapter IX of Code shall only apply to those establishments who are engaging 50 or more contract labours but shall not be applicable to those establishments in which work of an intermittent casual nature is performed.

The Code specifies that the Welfare Activity defined under the Code shall be provided by the Principal Employer and any failure of Contractor to make payment to contract labor will make Principal Employer liable to make payment, however with an option of recovering of amount by way of deduction or as a debt from Contractor. Further to this, the Code provides for issuance Experience certificate to its contract labor giving details of work performed.

Similarly, with respect to inter-state migrant workers, the applicability shall be to those establishments who are employing 10 or more workers and to provide suitable working conditions to the worker and to further extend all benefits to such workers which is generally available to a worker of that establishment such as ESIC and EPFO. The employer shall also liable to pay to every inter-state migrant worker, every year, a lump sum amount as journey allowance towards his travel to his native place.

Occupational Safety and Health Advisory Board and other Authorities
The Code has introduced a single National Occupational Safety and Health Advisory Board which will be constituted by Central Government and such other boards which will be constituted by State Governments. The major role of these boards is to provide insight to Government in relation to rules, regulations and to further facilitate functioning and execution of the Code.

The National and State Boards shall replace the existing advisory boards constituted under different legislations such as Contract Labor Act and the Building and Construction Workers Act.

Additionally, the Code further prescribes for constituting Safety Committee and Safety officers in any particular establishment for addressing the issues related to safety and working conditions of the workers in that establishments.

Social Security Fund

The Central Government through this Code has also tried to addressed the issue involving 'unorganized workers' and their welfare and has proposed for establishment of Social Security Fund, which will be created from the amount of fine/penalty as received from compounding of offences or through any source as may be prescribed by the appropriate Government. The fund so collected shall be expended for the welfare of workers in such manner as may be prescribed including transferring the amount of Fund to any other Fund established under any other law for welfare of unorganized workers.

Offences and Penalties

The Central Government vide this Code has introduced a concept of compounding of offences wherein certain offences either before or after holding of enquiry or before institution of prosecution may be compounded by payment of penalty amount ranging between 50% to 75% of the fine amount and on payment of such payment the person shall be discharged of the penalty or offence without any further proceedings

The Code once notified will not only improve the working condition of the workers but will also reduce employer's burden as it will substitute multiple registration into one common license. Additionally, the clarification and procedure in relation to different establishment provided in the Code shall bring uniformity across the establishments thereby promoting ease of doing business and reducing administrative bottleneck.

Award Winning Article Is Written By: Mr.Monar Purohit

Authentication No: OT30289238619-28-1020