As part of labour reform initiative of the Central Government, the new labour Code on Wage Bill has been approved by the Cabinet on July 26. It aims to consolidate and amend the law relating to wage and bonus. The proposed bill is expected to be placed in the Parliament during this Monsoon Session.
The Union Ministry of labour has proposed four labour codes on functional basis, such as a code on wage, a code on industrial relation, a code social security and welfare and a code safety and working condition. The code on industrial relation includes consolidation and amendment in existing laws relating to trade union registration, condition of employment and investigation and settlement of disputes. The code on social security addresses social security and welfare of the workforce of all sectors in the country. The new codes have integrated and universalized minimum wage and social security benefits for the workers which will bring more inclusion in the labour market of the country and pave the way for inclusive development.
This effort is continuation of the process of recommendation for reform made by second National Commission on labour under the Chairmanship of Ravindra Varma who was a Gandhian politician and labour and Parliamentary Affairs Minister in the Morarji Desai Government. The commission submitted its report in 2002 to the then Prime Minister Atal Bihari Vajpayee and Sarad Yadav was the labour Minister. The Government of India has initiated major economic reforms that include reform in labour legislation in line of liberalization, privatization and globalization process. India has rectified major international conventions related to labour reform such as six core international labour organization conventions out of eight and the recent conference of labour Ministers of BRICS countries held in China has laid focus more on various labour related issues and its standardization on the context of “Governance in future of work”.
The proposed labour Code on Wage bill has brought together four major acts -The Minimum Wage Act 1948, the Payment of Wage Act 1936, the Payment of Bonus Act 1965, and the Equal Remuneration Act 1976. The code on wage will ensure universal minimum wage for all sections of workers in the country and go beyond the industry and establishments not being covered under the existing law. It will bring uniformity in Central and State domain and among different States relating to minimum wage in providing a more democratic and scientific basis to the exercise in fixation of minimum wage. The national minimum wage rate in a centralized minimum wage structure will be the threshold for the State to be followed and maintained; even the States can go on adding more to it.
In the code on wage Section 3 has a provision that there shall be no discrimination among male, female and transgender employees on the ground of sex in the matter of wage for work of similar nature under the same employer and no employer shall be allowed to pay less than minimum wages for time work or piece work fixed by the State Government and to be revised from time to time. While doing so the State Government has to follow the guidelines made by the Minimum Advisory Board constituted by the Central Government. As labour is a subject in concurrent list so both the Centre and the State have equal stake over it. The States have also to consider the cost of living of the workers and its geographical location along with skill of the workers and arduousness of the work while fixing the wage. In order to make the process more democratic and scientific for the fixation and revision of minimum wage under this code, the State Government shall appoint committees and sub -committees to advice the Government. The determination of disputes with regard to similar nature of work shall be decided by the authority notified by the Government.
The State Government shall constitute the Minimum Wages Advisory Board for advising the State Government in fixation or revision of minimum wage which shall consist of persons nominated by the State Government representing employers and employees in the employments, and independent members not exceeding one third of its total number of members and one independent member will be the Chairman of the board. The Central Government shall constitute Minimum Wage Advisory Board with a Chairman and such number of members as to be prescribed which will advise it and issue directions to the State Governments from time to time on matter relating to minimum wage.
For the purpose of the code, the bill make definition of employee which means any person other than an apprentice employed directly or indirectly on wages in any establishment to do any skilled, semi-skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward. The employer is a person who employs directly or indirectly employees in his establishment. This is to expand the scope of identifying left-out employee and employer in the existing laws and to make it more inclusive.
The bill says that the payment of wage shall be paid by depositing the same in the bank account of the employees by cheque or electronically. The fixation of wage period and time limit for payment of wage will be decided by the employer. The bonus payment will be made to every employees drawing wage less than the amount as notified by the Central Government from time to time.
While fixing hours of work for normal working day and interval the State Government will fix the number of hours of work and provide for a day of rest in every period of seven days which shall be allowed to all employees and payment of wage in respect of such days of rest but the payment for work on a day of rest not less than the overtime rate. However, there will be conditions for employees engaged on urgent work or complementary nature of work.
Every employer of an establishment to which the wage code applies shall maintain a register containing the details with regard to person employed, muster roll, wages and other details as prescribed by the Government. The employer has to display a notice at a prominent place containing the abstract of the code, category wise rate, wage period day and date and time of payment of wages and the name of the person responsible for payment of wage. Every employer has to send an annual return in a prescribed form electronically to the authority. The Government will appoint facilitators as public servant with power and geographical limit for resolve of disputes. The facilitator will supply information and advise the employers and workers concerning complying with provisions of the wage code.
The cognizance of fault committed under this code shall be taken on the complaint filed by an employee or a registered trade union or a recognized welfare institution or a facilitator appointed under the code. Magistrate of first class shall trial the offence. Any violation of payment of minimum wage or discrimination in payment attracts fine of Rs 50,000 against the employer. The employers who are featured as defaulters will be punishable with an imprisonment for three months or with fine of Rs 1lakh. The code has provision of bar on suits that no court shall entertain any suit for the recovery of minimum wage, any deduction from wage, discrimination in payment of wage and bonus. The burden of proof in case of claim cases for non-payment of wage or less payment shall be on the employer.
It is told that the new labour code along with social security code will expand the scope of inclusion and pave the way towards higher side of wage, bonus and social security that will ensure the genuine rights of the working class of our country. But it is apprehended that the move may encourage mechanization and affect employment. Besides, the small units may face difficulty in complying with the new legislation.
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