Page 737 - ES 2020-21_Volume-1-2 [28-01-21]

364 Economic Survey 2020-21 Volume 2

ANNEXURE II

HIGHLIGHTS OF THE FOUR LABOUR CODES

The Government has simplified, rationalized and amalgamated 29 Central Labour Laws/Acts
into four Codes, viz; (i) the Code on Wages, 2019, (ii) the Industrial Relations Code, 2020
(iii) The Occupational Safety, Health and Working Conditions (OSH) Code, 2020, and (iv) the
Code on Social Security, 2020. The three Codes dealing with occupational safety, health and
working condition, industrial relations and social security were notified on 29.09.2020, while
the Code on Wages was notified on 08.08.2019. Through these labour codes the much needed
labour welfare reforms have been introduced after years of holding many multi-stakeholders
consultations with Trade Unions, Employers, Central Ministries/State Governments and experts
of labour sector. Draft rules have been published in Gazette of India for inviting comments from
public and stakeholders. The salient features of the Codes are as under:

The Code on Wages, 2019: It amalgamates 4 wages and payment related labour laws viz; the
Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965
and the Equal Remuneration Act, 1976. The salient features of the Code on Wages include:
i. A statutory right has been created for minimum wages and timely payment of wages to all
workers whether in organized or unorganized sector. It extends entitlement of minimum
wages to all the workers in the country as against 30 per cent of the workforce, at present.
At present, minimum wages are fixed for employment covering mainly mines sector,
plantation, dock workers, building and construction workers, watch and ward, sweeping
and cleaning and manufacturing sector etc. Extension will take place to entire service sector
(IT, hospitality, transportation etc.), domestic workers, unorganized workers, teachers etc.
ii. Method of fixation of minimum wage rates simplified. Factors to be taken into account are
types of skills and geographical location as against the present system of wage being fixed
employment-wise.
iii. Number of minimum wage rate would be around 200 in the entire country as against
10000, at present.
iv. In central sphere, there would be only 12 minimum wage rates as against 542.

v. Revision of minimum wages in every 5 years.
vi. A statutory concept of ‘Floor Wage’ introduced.

The Industrial Relations Code, 2020: The Industrial Relations Code (IR Code) has been
prepared after amalgamating, simplifying and rationalizing the relevant provisions of (i) the
Trade Unions Act, 1926; (ii) the Industrial Employment (Standing Orders) Act, 1946 and (iii)
the Industrial Disputes Act, 1947. The salient features of the Code include:
i. The wage ceiling for the purposes of coverage of ‘supervisor’ as workers for grievance
redressal has been increased to ` 18000/- per month from existing ` 10000/- per month
under the Industrial Disputes Act.
ii. The concept of fixed term employment (FTE) introduced which is a win-win situation
where an employee gets all the benefits of a permanent employee and the employer can
engage a worker without intervention of a contractor. A FTE worker will be entitled to all