The Industrial Relations Code 2019 Bill (“Code”), after getting its approval from the Cabinet, has been introduced in the Lok Sabha.

The Code will come into force when the Government will declare the same by a Notification.

Background:

The Second National Commission on Labour, which submitted its report in June 2002, had recommended that the 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.

Pursuant to such recommendations and the deliberations made in the tripartite meeting comprising of the Government, employers’ and industry representatives, the Government decided to bring the proposed legislation. The proposed legislation i.e. the Code intends to amalgamate, simplify and rationalise the relevant provisions of the following three central labour enactments relating to industrial relations, namely:—

 

(a) the Trade Unions Act, 1926;

 

(b) the Industrial Employment (Standing Orders) Act, 1946; and

 

(c) the Industrial Disputes Act, 1947

Key Highlights:

1. The Code proposes a new definition “fixed term employment” which means the engagement of a worker on the basis of a written contract of employment for a fixed period. However, his hours of work, wages, allowances and other benefits will not be less than that of a permanent workman doing the same work or work of similar nature;

Further, the workers falling under the purview of fixed term employment will be entitled to all statutory benefits available to a permanent workman proportionately as per the period of service rendered by him.

2. Further, the Code seeks to exclude from the definition of workers any person who is employed mainly in a managerial or administrative capacity and any person employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month or an amount as may be notified by the Central Government from time to time.

3. The Code further proposes to bring under the purview of definition of “strike” the casual leave taken by fifty per cent or more workers employed in an industry on any given day.

4. Works Committee and Grievance Redressal Committee:

• Works Committee: If any industrial establishment has employed 100 or more workers on any day in the preceding 12 months, the employer can be directed by the Government to constitute a Works Committee.

The number of representatives of workers in such Committee must not be less than the number of representatives of the employer.

• Grievance Redressal Committee: Every industrial establishment employing 20 or more workers would be mandatorily required to have one or more Grievance Redressal Committees for the resolution of disputes arising out of grievances of an individual worker relating to non-employment, terms of employment or conditions of service. The Code proposes that the total number of members in a Grievance Redressal Committee should not exceed 10.

5. The procedure for registration, alteration of name and constitution of a trade union has been laid down in the Code.

6. An employer intending to effect any change in the conditions of service applicable to any worker in respect of the matters specified in the Third Schedule to the Code (like wages, contribution paid, hours of work, leave with wages and holidays, withdrawal of any customary concessions etc.), must effect such change by giving notice to the workers with respect to such change. However, no change can be brought in within 21 days of such notice.

7. In case of disputes:

• The employer and the workers apprehending any dispute, may agree to refer the dispute to arbitration, by a written agreement and refer the dispute to arbitration.
• The Government may, by notification, appoint such number of persons, as it thinks fit to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.
• Further, the Government will also by notification, constitute Industrial Tribunals for resolving the disputes.

8. Strikes and Lockouts:

• An employer has to be given a 60-days’ notice by the employees before they go on a strike.
• Further, a strike cannot be initiated within 14 days of giving such notice.

9. Lay off, Retrenchment and Closure- The provisions for lay off, retrenchment and closure have been segregated under the Code into 2 chapters as per threshold. While Chapter IX lays down the conditions for establishments where less than 100 workers were employed on an average per working day in the preceding twelve months, Chapter X provides the conditions for establishments where 100 or more workers are employed an average per working day in the preceding twelve months.

Retrenchment will not include termination of the service of the worker which is the result of the non-renewal of the contract of employment between the employer and the worker concerned on the expiry of such contract or the stipulated time period.

The Code has proposed to define continuous service in relation to a worker as the uninterrupted service of such worker, including his service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal or a lock-out or a cessation of work which is not due to any fault on the part of the worker.

 

• Establishments with less than 100 workers

• The provisions of lay off will not apply to:

1. industrial establishments with less than 50 workers on an average per working day, employed in the preceding calendar month; and
2. industrial establishments which are of a seasonal character or in which work is performed intermittently.

• It is the duty of the employer to maintain a muster roll, and to provide for the making of entries by workers who may present themselves for work at the establishment at the appointed time during normal working hours.

• An employer cannot retrench any worker employed in any industry who has been in continuous service for minimum 1 year under him until and unless:

1. the employer gives 1 month notice to the worker in writing indicating the reasons for such retrenchment or the worker has been paid in lieu of such notice, wages for the period of the notice;

1. the worker has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay, or average pay of such days as may be notified by the appropriate Government, for every completed year of continuous service or any part thereof in excess of six months;

Ø  It is the duty of the employer to give an opportunity to his retrenched worker who are citizens of India to offer themselves for re-employment if he proposes to take into his employment any persons within one year of such retrenchment. The retrenched workers who offer themselves for re-employment shall be given preference over other persons. The re-employment must be made in the manner prescribed by the Government.

Ø  Closure: If an employer intends to close down his establishment, he must serve a notice to the Government minimum 60 days prior to the intended date of closure. The notice should clearly state the reasons for the intended closure.

However, such notice is not mandatory in industrial establishments in which less than 50 workers are employed or were employed on any day in the preceding 12 months and to industrial establishments set up for the purpose of construction of buildings, bridges, roads, canals, dams or for other construction work or project.

Every employer should pay at the time of retrenchment, compensation to the employee which is equivalent to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of 6 months.

• Establishments with 100 or more workers:

Ø  Lay-off:

Employers must obtain prior permission of the Government obtained for laying off any workman by making an application in this behalf. Such permission would not be required if

lay-off is due to shortage of power, natural calamity,

in the case of a mine, such layoff is due to fire, flood, excess of inflammable gas or explosion.

The application must also be served simultaneously on the workers concerned.

Ø  Retrenchment:

An employer before retrenching any workman under him who has been in continuous service for not less than one year must –

1. Give the worker 3 months’ notice in writing indicating the reasons for retrenchment and the retrenchment must not take place before such period of notice has expired, or the worker has been paid in lieu of such notice.
2. Obtain the prior permission of the appropriate Government

The retrenched worker will be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to 15 days average pay for every completed year of continuous service or any part thereof, in excess of 6 months.

Ø  Closure:

For closing down an undertaking of an industrial establishment, an employer will have to apply for prior permission at least 90 days before the date of intended closure, stating clearly the reasons for the intended closure of the undertaking. A copy of the application must also be served simultaneously on the representatives of the workers.

Upon closing of an undertaking, every worker who is employed in that undertaking immediately before the date of application for permission, will be entitled to receive compensation which shall be equivalent to 15 days average pay for every completed year of continuous service or any part thereof in excess of six months.

Ø  Where the Government does not communicate any order granting or refusing to grant permission to the employer for any application for lay-off, retrenchment or closure made by him, within 60 days from the date of application, the permission applied for will be deemed to have been granted on the expiration such 60 days.

10. Further, the Code proposes the setting up of a fund called the re-skilling fund which will consist of contribution of the employer of an industrial establishment an amount equal to 15 days wages last drawn of a retrenched worker. Further, this fund should be credited within 45 days of retrenchment of such worker.

Source: Lok Sabha

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