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One Day Online Training on The New Wage Regime

Exploring ‘The Code on Wages, 2019’

23 Mar 2021

Online

Contact Details

Neha Malhotra, Manager – Trainings
M: 8178340214 | E: nmalhotra@aima.in

Introduction

On 15.10.1999 the Government of India set up the second National Commission on Labour, inter alia, to suggest “rationalisation of existing laws relating to labour in the organised sector” and “an umbrella legislation for ensuring a minimum level of protection to workers in the unorganised sector.”

Having reviewed the entire gamut of labour laws, the Commission in its report submitted in the year 1992 recommended, inter alia, that the then existing set of labour laws should be broadly amalgamated into the following groups, namely: —
a. industrial relations;
b. wages;
c. social security;
d. safety; and
e. welfare and working conditions

In pursuance to the recommendations made by the second National Commission on Labour and the deliberations made subsequently by the representatives of the various stake-holders, the Central Government decided to rationalise and amalgamate different Central labour enactments into four Codes, viz., The Code on Wages, 2019; The Industrial Relations Code, 2020; The Code on Social Security, 2020; and The Occupational Safety, Health and Working Conditions Code, 2020.

The Code on Wages, 2019

  • The Code on Wages, 2019 amends and consolidates the laws relating to wages and bonus and matters connected therewith or incidental thereto.
  • The Code received the assent of the President on 08.08.2019.
  • It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
  • The Central Government may fix different dates for different provisions of this Code for the purposes of enforcement thereof.
  • In all likelihood, the Code will be enforced by or before April, 2021.
  • On the Code on Wages, 2019 coming into force, The Equal Remuneration Act, 1976, The Minimum Wages Act, 1948, The Payment of Wages Act, 1936 and The Payment of Bonus Act, 1965 shall stand repealed.
  • The Code on Wages, 2019 seeks to amalgamate, simplify and rationalise the following four central labour enactments relating to wages, viz.:
    1) The Payment of Wages Act, 1936;
    2) The Minimum Wages Act, 1948;
    3) The Payment of Bonus Act, 1965; and
    4) The Equal Remuneration Act, 1976.

As per the Statement of Objects and Reasons appended to the Code on Wages, Bill, 2019:

“The amalgamation of the said laws will facilitate the implementation and also remove the multiplicity of definitions and authorities without compromising on the basic concepts of welfare and benefits to workers. The proposed legislation would bring the use of technology in its enforcement. All these measures would bring transparency and accountability which would lead to more effective enforcement. Widening the scope of minimum wages to all workers would be a big step for equity. The facilitation for ease of compliance of labour laws will promote in setting up of more enterprises thus catalyzing the creation of employment opportunities.”

Salient Features

  • As all four Codes define “wages” in the same terms, the new wage regime may impact not only statutory bonus, but also Provident Fund, ESI, and Gratuity;
  • The Code on Wages has also substantially altered the landscape of the law relating to Minimum Wages;
  • The new definition of “wages” may also have implications for the purposes of Minimum Wages;
  • The provisions relating to wages are applicable to all employments;
  • The power to fix minimum wages continues to be vested in the Central Government as well the State Government in their respective sphere;
  • The Code enables the appropriate Government to determine the factors by which the minimum wages shall be fixed for different category of employees. The factors shall be determined taking into account the skills required, the arduousness of the work assigned, geographical location of the workplace and other aspects which the appropriate Government considers necessary;
  • The Code has also significantly enlarged the canvas of applicability and coverage of The Payment of Wages Act;
  • he provisions relating to timely payment of wages and authorised deductions from wages, which are presently applicable only in respect of employees drawing wages of twenty-four thousand rupees per month, have been made applicable to all employees irrespective of wage ceiling;
  • The Code provides that all wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee or by the electronic mode. However, the appropriate Government may specify the industrial or other establishment whose employer shall pay to every employee the wages only by cheque or by crediting the wages in his bank account;
  • The Code also provides for “floor wage” for different geographical areas so as to ensure that no State Government fixes the “minimum wage” below the “floor wage” notified for that area by the Central Government;
  • In order to remove the arbitrariness and malpractices in inspection, the Code empowers the appropriate Government to appoint Inspectors-cum-Facilitators in the place of Inspectors, who would supply information and advise the employers and workers;
  • The Code empowers the appropriate Government to determine the ceiling of wage limit for the purpose of eligibility of bonus and calculation of bonus;
  • Though the Code retains the essence of the law relating to payment of statutory bonus, but certain provisions thereof may be of concern to establishments having pan India presence, as the amount of bonus may vary from State to State;
  • In place of number of authorities at multiple levels, the Code empowers the appropriate Government to appoint one or more authorities to hear and decide the claims under the proposed legislation;
  • The Code enables the appropriate Government to establish an appellate authority to hear appeals for speedy, cheaper and efficient redressal of grievances and settlement of claims;
  • The Code provides for graded penalty for different types of contraventions of its provisions;
  • The Code authorizes not only the appropriate Government or an officer authorized in this behalf to file a complaint before a criminal Court for any offence punishable under this Code, but also an employee or a registered Trade Union or an Inspector-cum-Facilitator;
  • Consequently, it is now open to an aggrieved employee or a registered Trade Union also to file a complaint against the employer before a criminal Court for any offence punishable under this Code;
  • The Code provides that the Inspector-cum-Facilitator shall give an opportunity to the employer before initiation of prosecution proceedings in certain cases of contravention, so as to comply with the provisions of the proposed legislation. However, in case of repetition of the contravention within a period of five years such opportunity shall not be provided;
  • The Code provides for the appointment of officers not below the rank of Under Secretary to the Government of India or an officer of equivalent level in the State Government to dispose of cases punishable only with fine up to fifty thousand rupees, so as to reduce the burden on subordinate judiciary;
  • The Code also provides for compounding of those offences which are not punishable with imprisonment;
  • The Code also provides that where a claim has been filed for non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deduction not authorised by the Code, the burden shall be on the employer to prove that the said dues have been paid to the employee;
  • The period of limitation for filing of claims by a worker has been enhanced to three years, as against the existing time period varying from six months to two years, to provide a worker more time to settle his claims.

Training Objectives

To review, examine, analyse and discuss the major changes brought about by ‘The Code on Wages, 2019’ in the laws relating to payment of wages/remuneration and bonus, their implications, and the nuances of the new ‘wage regime’.

Topics to be covered

The Webinar will cover the salient features of the Code on Wages, 2019 and focus on the major changes in the laws relating to wages/remuneration and bonus which the Code seeks to bring about.

Who should attend?

  • The Webinar will be useful for all persons who have a stake in ensuring that the employers, organisations, companies, establishments, etc. remain fully compliant with the laws relating to payment of wages/remuneration and bonus.
  • In particular, the Webinar will be of immense utility to the practitioners of labour and employment laws, Employers, HR Managers, Personnel Managers, Industrial Relations Managers, Law Officers, Compliance Officers, In-House Counsel, Advocates, etc.

Fees

Fees: INR 5000 + GST @ 18%

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