Parliament Introduces Comprehensive Codes on Wages and Occupational Safety, Health, and Working Conditions

The Lok Sabha on July 23, 2019, saw the introduction of two significant pieces of legislation: the Code on Wages, 2019, and the Occupational Safety, Health and Working Conditions Code, 2019. These Bills represented a substantial effort to consolidate and rationalise India's complex labour law framework. The Code on Wages, 2019, aimed to amend and consolidate laws pertaining to wages and bonus, replacing four existing central enactments: the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976. Similarly, the Occupational Safety, Health and Working Conditions Code, 2019, sought to consolidate and amend thirteen enactments governing occupational safety, health, and working conditions, including the Factories Act, 1948, the Mines Act, 1952, and the Contract Labour (Regulation and Abolition) Act, 1970. Both Codes extended to the whole of India, with specific provisions for certain regions or sectors, and were slated to come into force on dates to be appointed by the Central Government through official notifications, allowing for different commencement dates for various provisions.

The Code on Wages, 2019, introduced a unified definition of "wages" and prohibited gender-based discrimination in remuneration for similar work. It mandated the payment of minimum wages, with the Central Government empowered to establish a "floor wage" that no State Government could undercut. The Code also stipulated that wages must be paid through current coin, currency notes, cheque, bank transfer, or electronic mode, within prescribed time limits, and outlined permissible deductions, capping them at fifty percent of an employee's wages. Provisions for annual bonus, including a minimum of 8.33 percent of wages or one hundred rupees, whichever was higher, were also included. The legislation enhanced the limitation period for filing claims to three years and established Inspector-cum-Facilitators to ensure compliance.

The Occupational Safety, Health and Working Conditions Code, 2019, applied to establishments employing ten or more workers, with specific inclusions for mines and dock work. It expanded the definitions of "audio-visual workers," "journalists," and "inter-State migrant workers" to cover emerging sectors and direct recruitment. A key feature was the provision for "one registration" for establishments and a "common license" for contract labour, factories, and beedi and cigar establishments. The Code permitted women to work night shifts (beyond 7 PM and before 6 AM) with their consent and subject to safety conditions. It outlined comprehensive duties for employers, manufacturers, designers, and architects to ensure a hazard-free workplace, annual health examinations, and welfare facilities such as canteens, first-aid, and creches. The Code also detailed working hours, weekly holidays, annual leave with wages, and established National and State Occupational Safety and Health Advisory Boards. Penalties for contraventions were graded, with provisions for compounding certain offences and for victims of accidents to receive compensation from fines.

The legislative intent behind these Codes was to simplify and rationalise the existing labyrinthine framework of Indian labour laws, which had become fragmented and complex due to multiple enactments with overlapping and sometimes conflicting provisions. The previous legal position involved numerous Acts, each with its own definitions, compliance requirements, and enforcement mechanisms, leading to administrative difficulties and a lack of clarity for both employers and employees. The Codes aimed to address these statutory gaps and limitations by amalgamating related laws into single, comprehensive instruments. This approach sought to remove the multiplicity of definitions and authorities, thereby facilitating easier implementation and promoting transparency and accountability in enforcement. The introduction of these Codes followed deliberations in tripartite meetings involving the Government, employers, and industry representatives, and built upon the work of the Second National Commission on Labour. An earlier version of the Code on Wages, 2017, had been introduced and examined by a Parliamentary Standing Committee but lapsed.

For instance, the Code on Wages aimed to ensure a universal right to minimum wages and timely payment for all employees, irrespective of wage ceilings, a significant expansion from the earlier position where such provisions often applied only to employees below a certain income threshold. The introduction of a national floor wage was a policy rationale to prevent a race to the bottom among states in fixing minimum wages, thereby ensuring a basic standard of living for workers across different geographical areas. The legislation provided: “The minimum rates of wages fixed by the appropriate Government under section 6 shall not be less than the floor wage and if the minimum rates of wages fixed by the appropriate Government earlier is more than the floor wage, then, the appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.” This provision underscored the commitment to protecting and enhancing worker remuneration.

Similarly, the Occupational Safety, Health and Working Conditions Code sought to create a unified and dynamic framework for ensuring safe and humane working conditions, adapting to technological changes and expanding the coverage to a wider array of workers, including those in the digital audio-visual sector and inter-State migrant workers. The permission for women to work night shifts, coupled with stringent safety conditions and consent requirements, aimed to enhance employment opportunities while safeguarding their well-being. The emphasis on "one registration" and "common license" was intended to ease compliance burdens for businesses, thereby encouraging the creation of more employment opportunities. The Codes also introduced new rights and obligations, such as the right of employees to information on health and safety, the duty of employers to provide annual health examinations, and the provision for compensation to accident victims from penalties. The enforcement mechanisms were strengthened through the appointment of Inspector-cum-Facilitators, who would also advise on compliance, and through graded penalties, with an opportunity for employers to rectify minor contraventions before prosecution. The burden of proof for non-payment of dues was explicitly placed on the employer, reinforcing worker protection. These legislative changes aimed to foster a more equitable, safe, and efficient labour environment in India.

Keywords: Code on Wages, Occupational Safety Health and Working Conditions Code, labour law reform, wage consolidation, minimum wage, floor wage, occupational safety, worker welfare, India, labour laws 2019 Geo Tags: India, Delhi District: Not Applicable