Labour codes: What changes for workers and employers

* Wage includes basic pay, dearness allowance and retaining allowance, and is to be the basis for calculation of benefits and social security contributions. Deductions are to not exceed 50 per cent of the total pay. Overtime wage is fixed at at least twice the normal wage for any work beyond normal working hours.

* The government has said that working hours will be between 8-12 hours/day and no employee shall be required to work for more than 48 hours a week. If an employee works for less than six days a week, or flexibility in working is provided in the rules, working hours shall not exceed 12 hours in a day including the interval for rest.

* Time limit set for wage payments: end of the shift (for daily); before weekly holiday (for weekly); within 2 days of end of fortnight (for fortnightly); within 7 days of next month (for monthly); within 2 days (for resignation or termination).

* Wage slips, electronic or physical, have to be issued by every employer to employees on or before payment of wages. This will ensure documentary proof of employment, wages, allowances, deductions, and net pay to workers.

Code on Social Security

* Merges nine existing social security laws to cover both organised and unorganised sectors. Defines gig and platform workers legally for the first time. National registration and a social security fund for unorganised and gig workers is stipulated.

* Social security schemes to be funded wholly or partly by central and state governments or corporate social responsibility contributions. Aggregators for gig workers to contribute 1-2 per cent of annual turnover for social security, capped at 5 per cent of the amount payable by the aggregator to gig workers.

* Fixed-term employees, appointed for shorter terms, to be at par with permanent workers. They will be eligible for gratuity after 1 year of continuous service. Earlier, it was limited to permanent workers after 5 years of service.

* Employees’ Provident Fund Organisation (EPFO) coverage extended to all establishments having 20 or more employees, regardless of the industry type. There is pan-India ESIC (Employees’ State Insurance Corporation) coverage, versus certain notified areas currently. ESIC cover to be mandatory even if a single person is engaged in hazardous occupation, as against the minimum 10 workers norm at present. Plantation owners can join ESIC voluntarily now. Provision to add parents-in-law to family definition of female employees, with income cap.

* Appointment of ‘inspector-cum-facilitators’. Governments to notify inspection scheme that may provide for web-based inspection and calling of information.

Industrial Relations Code

* Merges three industrial laws. Defines worker as 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. Includes sales promotion employees, working journalists, and those employed in supervisory capacity drawing wages less than Rs 18,000.

* Introduction of fixed-term employment: facilitates hiring for shorter tenures, linked to the industry’s seasonality. Trade unions have objected to this norm.

* Threshold for seeking prior government approval for layoff, retrenchment and closure in factories, mines and plantations hiked to 300 workers from 100. While industry states that this gives flexibility in hiring, unions have said that this provision eases hiring and firing.

* Extends conditions for a legal strike from public utility services to all industrial establishments. At present, workers of public utilities, like water, electricity, natural gas, telephone and other essential services, have to give a strike notice within six weeks before striking or within 14 days of giving such notice. The Code states that workers cannot strike without giving notice within 60 days before striking or within 14 days of giving such notice.

* The definition of strike has been amended to include mass casual leave, wherein casual leave has been taken by more than 50 per cent of the workers on a given day. The government said this has been done to discourage flash strikes. Trade unions have said these norms will limit the power to strike.

* Introduces ‘negotiating union or council’ — a trade union with 51 per cent membership of workers will be the ‘sole negotiating union’. If there is more than one trade union in an establishment, then the negotiating council will be formed with representatives of unions having 20 per cent of workers as members, granting one seat for each 20 per cent of verified membership. Trade unions have said this limits powers of small unions.

OSH Code

* Merges 13 central labour laws. The government said it will streamline compliances via single registration, common licences and electronic filings. Threshold for obtaining a factory licence increased from 10 workers to 20 for manufacturing aided with power; from 20 to 40 for units without power.

* Contract labour norms to apply on contractors employing 50 workers, versus 20 workers earlier. Core and non-core activities (sanitation, catering etc.) of an establishment have been defined and employers given flexibility to employ contract labour even in the core activities, subject to conditions.

* Permits women to work in night shifts, before 6 am and beyond 7 pm, subject to their consent and provisions for safety. The definition of inter-state migrant worker has been expanded to include those employed by an employer directly as against through contractors only at present.

* Mandatory appointment letters to be issued by employers to every employee. Earlier, laws did not explicitly mandate such letters, especially for casual workers. The prescribed format is likely to have employee details, designation, category, wages, and details of social security.

* Every employer is required to provide annual health examinations or tests free of cost to employees. Every factory employing 500 or more workers, employers employing 250 or more construction workers and employers employing 100 or more mine workers will need to constitute a safety committee consisting of employers’ and workers’ representatives.