Shramev Jayate: The key changes to be brought in through the Labour Codes

A total of 29 existing labour laws have been merged into 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, collectively known as the Labour Codes..The Labour Codes were reported to be set in motion from July 1, 2022, however, an official notification to that effect is pending.While the Central laws have already been notified in this regard, state-specific legislation and their implementation are awaited..In this article, we take a look at some of the important changes sought to be brought in through the Codes..Impact on salaries.The term ‘wage’ defined under Section 2(y) of the new Wage Code, 2019 shall include, basic pay; dearness allowance; retaining allowance, but does NOT include bonus, house accommodation, contribution of employer towards pension of Provident Fund (PF); conveyance allowance; remuneration payable under any award; overtime allowance; commission; gratuity; and ex gratia payment on termination of employment.The new Code of Wages makes it compulsory for organisations to make sure that at least 50 per cent of the employees’ CTC is basic pay, while the remaining portion comprises other employee allowances, including house rent, overtime, etc, thus effectively increasing the gratuity bonus to be paid to the employee. The gratuity amount is calculated on basic salary which includes basic pay and allowances.On the downside, the take home salaries of the employees are expected to reduce, as more emphasis is made on increasing contributions towards provident fund (PF) and other post-retirement schemes..Four-day work weeks?.Rule 28 of the Rules formulated under the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) effectively provides for the possibility of four-day work weeks. The Rule states that 48 hours needs to be completed in a week and that no worker shall exceed 12 hours a day. Employees availing the facility will be subjected to enhanced working hours - 12 hours a day as opposed to 8 hours a day. On the same lines, employees working 9 hours a day can avail two week-offs. In addition, the new Code allows an increase in the maximum number of overtime hours from 50 hours to 125 hours..Leave policy.As per the existing laws, a minimum of 240 working days was mandatory for availing leave. However, the same stands reduced to 180 days under the OSH Code.As per Rule 32 (viii), a worker shall be entitled to encashment of unused leave at the end of the calendar year. Previously, encashment of leave was permissible only after leaving the workplace. The total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty days, meaning that the worker will be entitled to encashment of such exceeded leave at the end of the year..Full and final settlement.As per the existing laws in force, the complete settlement of salary and dues of an existing employee can be done between 45 and 90 days from his/her last working day. However, according to the new rules, the settlement of the exiting employee has to be done within two days of his/her last working day..Same work, same pay, for all genders.Section 3 of the Code on Wages clearly states there shall be no discrimination among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee. The Code uses the term "all genders", meaning transgender persons are also recognized in this respect.In addition, no employer can reduce the wages of one employee to bring parity in the wages, and the employer must not engage in any discrimination based on sex while recruiting..No more Inspector Raj?.The Code on Wages, in Chapter VII, has replaced the age-old Inspector Raj by introducing an inspector-cum-facilitator.Such authority is empowered to enter and inspect establishments and their machinery. They are also empowered to prosecute, conduct and defend proceedings before any court. The inspector-cum-facilitator is responsible not only for checking compliance, but also ensuring that establishments achieve compliance. The Code also provides for a randomised, web-based inspection system.As per a booklet released by the Central government on the changes brought in by the Labour Codes,"In addition, the system of 'inspector raj' was removed by making the role of inspector to that of advisor and facilitator for workers.".[Read the Codes]