Oct - Dec 2023

Highlights and Analysis of New Labour Code

  • The New Labour Code consolidates the various 29 labour laws into 4 labour codes as i) Code on Social Security, 2020, ii) Industrial Relations Code, 2020, iii) Code on Wages, 2019 and iv) Occupational Safety, Health and Working Conditions Code, 2020.
  • The New Labour code comprises 4 laws in the Code on wages, 2019, 9 laws in the Code on Social Security, 2020, 13 laws in The Occupational Safety, Health and Working Conditions Code, 2020 and 3 laws in the Industrial Relations Code, 2020.
  • The code was framed as a result of The Second National Commission of Labour submitting its report in 2002 stating that there was multiplicity of Labour Laws in India and therefore, recommended that at the Central level multiple Labour Laws should be codified into 4 or 5 Labour Codes and in addition there were no Labour Reforms that took place since 1991.
  • The New Labour Code aims in regulating the conditions of employment of various workers and employees. The code extends its applicability to both organised and unorganised sectors of the society which also enhances the ease of doing business in the country.
  • The definition of ‘employers’ includes any person who directly or indirectly employs one or more persons at an establishment whereas the code has adopted uniform definition of employee and worker.
  • The Central Government reserves the power to make wage-related decisions for employment in railways, mines, and oil fields. On the other hand, State Government is empowered to make decisions for all other employments except that the Central Government has power to make decisions.

Code on Social Security, 2020

The Social Security Code, 2020 codifies various Social Security laws and has extended the scope of applicability to gig and platform workers. The Social Security code provides security for labourers in areas such as Provident Fund, Gratuity, Maternity benefit and such related laws. This code aims at institutionalising a process for the contributions received from the employer and the worker and the Government is given an option to fund the contribution for the workers from the disadvantaged sector. The Code aims at expanding the ESI hospitals at district level and the ESI provision will be applicable even if a single worker is engaged in hazardous activity in an establishment. The amendments to the earlier codified laws include creating a Social Security Fund which is to be used for providing comprehensive security to Unorganised sector, benefit of pension scheme extended to organised, Unorganised and self-employed workers and the minimum service requirement for fixed term employees has been removed.  


Industrial Relations Code, 2020

This code is a consolidation of the laws relating to formation of the Trade Union, conditions of employment and the regulations for solving industrial disputes. The Code provides for simplified rules for formation of the trade union and emphasises for fixed-term employment. Under Atal Bimit Vyakti Kalyan Yojna, the workers of the organised sector will receive financial support from the government during the term of unemployment who are covered under the ESI scheme. At the time of retrenchment, 15 days wages will be credited to the bank account of the workers for re-skilling and the code in addition provides for fast justice to the workers through the tribunals where the workers disputes in any case should be resolved within one year in the tribunal.


Code on Wages, 2019

This code is a consolidation of the four existing laws relating to wages. This code provides for uniform minimum wages for employees and has simplified the calculation of the minimum wages. The Code provides for timely payment of Minimum Wages which will be revised once in 5 years. The minimum wages according to the code will be paid equally for both male and female employees in turn extending the applicability to employees of unorganised sector of the society. In order to remove regional disparity in Minimum wages, the provision of floor wages has been introduced.


Occupational Safety, Health and Working Conditions Code, 2020

This code is the amalgamation and amendment to the safety, health and working conditions followed in an establishment or industry. It provides for the regulation relating to working hours, leave and other welfare facilities of the workers. Under the New Code, the Inter-state migrants can register themselves under the portal which will provide a legal status which earlier only workers appointed through contractors were considered as Inter-state migrant workers and enforces “One Nation – One Ration” concept where the migrant workers can avail the ration benefits in the state where he is working and on the other hand, his family can avail the ration benefits in the state where they are located. The Code has made it mandatory for provision of appointment letters, conducting free annual medical check-up and constitution of helpline in every state for grievance redressal of the migrant workers.  The Code in addition also provides for the empowerment of women workers in all the sectors and has enhanced the maternity benefits available.


In conclusion, the New Labour Code promotes the labour benefits to all sectors of employment and enhances the ease of doing business by codification of laws into one single set. This eradicates the multiplicity of laws and provides for reduction of compliance cost and number of disputes. One of the significant features of the Code is the Single Registration; Single License and Single return for all codes which minimises the scope of disputes. The New Labour Code also promotes the use of technology for registration and licensing.

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Recent Amendments/Notifications

Minimum Wages revision for Employment in Bought Leaf Tea Factories

Draft Notification has been published in the Tamil Nadu Government Gazette providing for revision of Minimum wages for Employment in Bought Leaf Tea Factories on 13.09.2023. The revised Minimum Wages provided for Employment in Bought Leaf Tea Factories shall be effective on or after two months from the date of publication of the draft in the Gazette without any objection.


Atal Beemit Vyakti Kalyan Yojana

Atal Beemit Vyakti Kalyan Yojana initially introduced for a period of two years during the Covid providing for welfare scheme in the form of unemployment allowance to eligible beneficiaries extended later till 31.06.2022 has been again extended through notification from 01.07.2022 to 30.06.2024.


PM Vishwakarma Scheme

‘PM Vishwakarma Scheme’ has been introduced providing for support to artisans and craftspeople enabling them to move up the value chain in their respective trades. The scheme provides for financial assistance at concessional rates in addition to other benefits provided. Notification further states that the appropriate lending institutions can refer to the detailed guidelines issued by the Ministry of Micro, Small and Medium Enterprises


Release of all movable/immovable properties

RBI has issued the Notification providing for release of all movable/immovable properties and remove charges after full payment or on closure of the loan. The Regulated Entities are instructed to follow a strict action of release within 30 days of the repayment or closure and there shall also be compensation that will be paid for any delay in such release process.


ESI scheme to Casual or Contractual workers

Notification has been issued to extend the benefits of the ESI scheme to casual or contractual or both in the State of Tamil Nadu and Odisha.


Inclusion to Public Utility Services

Services engaged in “Food Stuffs” , “processing or production or distribution of fuel gases (coal gas, natural gas and the like)” and “Lead and Zinc Mining Industry” under the Industrial Disputes Act, 1947 are declared as Public Utility services for a period of 6 months from the date of this notification


Signing of Corporation Contract

Amendment has been made to Rule 29 (2) of the Employees’ State Insurance (Central) Amendment Rules, 2023 where the contract that is being signed by the member on behalf of the Corporation should obtain prior sanction from the standing committee on executing contracts of expenditure exceeding rupees twenty–five crore from rupees five crores.  


Maiva Pharma Employees Union vs. Joint Director & Deputy Director (Industrial Safety & Health ), Maiva Pharma Pvt. Ltd

Date of Order : 13.09.2023;

Case No: W.P. NO.2247 OF 2023 and W.M.P. NOS.2328, 2330 & 2332 OF 2023;

Authority: Madras High Court

Facts of the Case:

  • The aggrieved party in this case are the members of the union (Petitioner) contesting against the order issued by the Joint Director and Deputy Director of Industrial Safety & Health (Respondents 1 & 2) primarily against the action of their employer Maiva Pharma Pvt. Ltd. (Respondent 3).
  • Employer is an establishment covered under the Factories Act, 1948.
  • Employer declared 3 Sundays as festival holidays out of 5 festival holidays to be declared as part of Section. 3 of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958 and the employer has not complied with Rule 3 of the Tamil Nadu Industrial Establishments (National & Festival Holidays) Rules, 1959.
  • The union presented a suggestive list of holidays for approval which was rejected by the employer.
  • The union approached the court contesting that festive holiday should normally not be weekly holidays and if the suggestion of the union is not accepted then it would defeat the very purpose of the holiday regulation act.

Sections Involved:

  • 3 of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958 – Grant of National, Festival and Special Holidays
  • 4 of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958 – Employer to send statement to Inspector
  • Rule 3 of the Tamil Nadu Industrial Establishments (National & Festival Holidays) Rules, 1959 – Specification of festival by Inspector

Summary and Conclusion:

  • The counsel for the employer submitted that most of the employees gave their consent to the list of holidays which the union denies.
  • On conjointly reading Section. 3 and 4 of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958, it is seen that every employee is entitled to 4 National Holidays and 5 other Festival Holidays, which list employer shall present to the Inspector under the Act in consultation with the employees and on display of the listed holidays in the premises.
  • The court held that festivals which fall on weekly holidays cannot once again be declared as Festival Holiday and ordered that 13.11.2023 (Monday) to be declared in lieu of 12.11.2023 (Sunday) as Deepavali Holiday.

Takeaway from the Judgment:

  • In conclusion, festivals which fall on weekly holidays cannot once again be declared as Festival Holiday and another day shall be declared as a Festival Holiday in lieu of that day.

Jeetubha Khansangji Jadeja vs. Kutchh District Panchayat

Date of Order: 23.09.2022

Case No: Civil Appeal No. 6890 of 2022 and Special Leave Petition (Civil) No. 8393 of 2022

Authority: Hon’ble Supreme Court of India

Facts of the Case:

  • The employee (Appellant) in this case was appointed as a watchman in the respondent society for a period since 05.10.1992 and terminated on 30.12.2002.
  • The employee was terminated without any reason and without following the procedure mentioned under the Industrial Disputes Act, 1947 where the juniors of the said employee were retained. Aggrieved by the decision of the management, the employee took the matter before the Labour court.
  • The management contested that the employment was purely on a temporary basis and hence the employee cannot claim the benefit of raising the issue as a industrial dispute as he has not worked for a continuous period of 240 days in a given year.
  • The labour court ordered for reinstatement of the employee which was agreed in all the stages of the appeal except the division bench. After multiple appeals, the matter has been brought before the Hon’ble Supreme Court of India.

Sections Involved:

  • 25B of the Industrial Disputes Act,1947 – Definition of continuous service
  • 25G of the Industrial Disputes Act, 1947 – Procedure for retrenchment

Summary and Conclusion:

  • In the present case, the employee had waited for a period of 10 years after his termination without any cause.
  • On the other hand, the court stated that denial of back wages to an employee who has been terminated on illegal grounds will relieve the obligation of the employer amounting to directly punishing the employee.
  • The onus is on the employer in case of denial of back wages on termination to prove that the employee concerned was gainfully employed during the period contested and was receiving the same emoluments.
  • In the present case, the employee was ordered to be reinstated with back wages for 2 years.

Takeaway from the Judgment:

  • In case of termination on illegal grounds, reinstatement to work with back wages is not automatic and in such cases, compensation in an amount is provided to meet the ends of justice.

Judgments Snippets

  • Settlement unless it is more beneficial for workers cannot in any case override certified standing orders – 2023 LLR 1063 SUPREME COURT OF INDIA
  • It is not proper for the Authority to recover EPF dues without identification of beneficiaries – 2023 LLR 1165 MADRAS HIGH COURT
  • Relief of any kind is not available to Habitual defaulter of EPF contributions – 2023 LLR 1165 MADRAS HIGH COURT
  • Payment of Bonus (Amendment) Act, 2015 can be applied retrospectively – 2023 LLR 1202 PATNA HIGH COURT
  • There will not be any EPF liability without determining employer-employee relationship – 2023 LLR 1271 HIMACHAL PRADESH HIGH COURT
  • Attendance and medical allowances are part of wages under the ID Act – 2023 LLR 1318 MADRAS HIGH COURT
  • ESI authority must give a reasonable opportunity to be heard before passing an order – 2023 LLR 1327 BOMBAY HIGH COURT
  • Non-payment of wages on dismissal is unsustainable – 2023 LLR 1318 MADRAS HIGH COURT
  • Non-display of minimum wages extract at workplace amounts to criminal offence – 2023 LLR 1307 JHARKHAND HIGH COURT
  • Trainees are not ’employees’ under the EPF Act – 2023 LLR 1343 ALLAHABAD HIGH COURT

Did you know?

1. ABC Private Limited Company choose to convert itself into a Public Company. It can do so by altering its Memorandum of Association and Articles of Association and by passing_____
a. Ordinary Resolution b. Special Resolution c. Board Resolution d. None of these
Answer: c

2. The minimum number of members required for registration of a trade union is
a. 7 b. 3 c. 2 d. 5
Answer: a

3. A pregnant women employees is entitled to get paid maternity leave for…..
a. 6 weeks b. 10 weeks c. 26 weeks d. 16 weeks
Answer: c

4. Under the Minimum Wages Act, 1948, the appropriate Governments have the power to notify any employment where ——- number of employees are working in ‘schedule of employment’ to fix the rates of minimum wages What is the laid down minimum working space per worker in every workroom
a. 13.2 cubic metres b. 14.2 cubic metres c. 10 cubic metres d. 15 cubic metres
Answer: b

5. The rate of Subsistence allowance paid to an employee under suspension for first 90 days is ?
a. 50% b. 75% c. 25% d. 10%
Answer: a

6. Compensation under Employees Compensation Act, 1923 shall be paid within
a. three months from the date of accident b. one month from the date of accident
c. one year from the date of accident d. No time limit
Answer: b

7. The total amount of fine which may be imposed in any one wage period on any employee shall not exceed an amount equal to ____ of the wages payable to him in respect of that wage period
a. 5% b. 10% c. 1% d. 3%
Answer: d