With the report provided by the 2nd Labour Commission, the new labour codes have subsumed 39 existing labour laws and divided them into four codes: that is: (i) the Code on Wages, (ii) the code on Social Security, (iii) the code on Occupational Health and Safety and (iv) code on Industrial Relations. These codes provide for certain uniformity and correlation between the various concepts. While these codes are yet to be notified, the following are the highlights.
1. Code on Wages, 2019
i. The term “wages” will now include: “Basic Pay”; “Dearness allowance” and “retaining allowance”. Authorized deductions* made by the employer cannot exceed 50% of the cost to company.
ii. Full and Final settlement (paying off due wages) will have to be mandatorily carried out within 2 days of removal, dismissal, retrenchment or resignation of the employee.
iii. *Permitted deductions include House rent allowance, travel allowance, overtime payment, PF.
2. Code on Social Security
i. With the coming of the new code the role of Gig workers, Platform workers, homebased workers, and unorganised workers are recognized. Workers of these categories have to mandatorily link their ‘Aadhar details’ to avail the benefits under this Code.
ii. The Code has introduced the concept of “Aggregators”; The Aggregators will now contribute to the Social Security Funds*. These funds shall be utilized for the welfare of the gig workers, platform workers, and unorganised workers.
iii. Employers are now required to maintain records pertaining to women employees of their Organisation*
iv. *Contributions shall be between 2% of their annual turnover;
v. ** Form XVI of the Code on Social Security (Karnataka) Rules, 2021, section 30 mandates it; however, the same yet to be notified
3. Code on Occupational Health and Safety
i. Employers are to ensure that working hours of employee do not exceed 8 hours a day, and more than six days a week.
ii. Employers are now required to provide annual health checkups for their employees*
iii. It will be mandatory to issue experience certificates and letters of appointment in the format prescribed (this includes the Aadhaar number of the employees, therefore needs introspection in the light of the Supreme Court judgements on the collection of Aadhaar details)
iv. *When notified by the central government.
4. Code on Industrial Relations
i. Establishment with over 300 workers will have to make and certify their compliance of the Standing Orders.
ii. Every employer who has retrenched a worker will have to electronically transfer an amount equal to 15 days wages towards the “Workers Re-skilling Fund” within 10 days of such retrenchment.
