The History of Labour Codes & The Code on Wages 2019

It was in 2002 during the tenure of Shri. Atal Behari Vajpayee that it was envisaged to have four to five codes governing all the provisions under Labour Laws. Vajpayee’s Finance Minister, Shri. Yashwant Sinha had proposed that India’s labor laws be modified. Criticism was widespread, including from within his own party. Eventually, Vajpayee backed off and the promise to amend labor law went unkept.

The Government in 2015 decided to consolidate India’s 44 labour laws into four codes in order to rationalize labour laws and improve ease of doing business. Finance Minister Smt. Nirmala Sitharaman stated in her 2019 Union Budget speech that “This will ensure that process of registration and filing of returns will get standardised and streamlined. With various labour related definitions getting standardised, it is expected that there shall be less dispute.” The Code on Wages is the first of the proposed codes. The other three are the Occupational Safety, Health and Working Conditions Code, the Code on Industrial Relations, and the Code on Social Security.

The Code on Wages Bill was introduced in the Lok Sabha on 10^th August 2017 by the Minister of State for Labour and Employment (Independent Charge), Shri. Santosh Gangwar. The bill was referred to a Parliamentary Standing Committee on 21^st August 2017. The Committee submitted its report on 18^th December 2018. The Committee made 24 recommendations, of which 17 were incorporated into the Bill. The Bill lapsed following the dissolution of the 16^th Lok Sabha ahead of the 2019 general elections. The Code on Wages Bill, 2019 was re-introduced in the House on 23^rd July 2019. Moving the bill for consideration, Shri. Gangwar stated that the government had held consultations with trade unions, employers and State governments, and held tripartite consultations on 10^th March 2015 and 13^th April 2015. The bill was passed by the Lok Sabha on 30^th July 2019. The bill was passed by the Rajya Sabha on 2^nd August 2019. The bill received assent from President Shri. Ram Nath Kovind on 8^th August 2019, and was notified in The Gazette of India on the same date.

Click this Link for the Gazette Notification on Code on Wages 2019 dt 8th Aug 2019

The government also approved a Memorandum of Understanding (MoU) among Brazil, Russian Federation, India, China, South Africa, regarding Cooperation in the Social and Labour Sphere. The MoU was signed on August 3^rd, 2018 during BRICS Labour and Employment Ministers (LEM) Meeting. The pact provides a mechanism for cooperation, collaboration and maximum synergy amongst BRICS member countries with the common objective of inclusive growth and shared prosperity in the new industrial revolution. This would facilitate member countries to share knowledge and also implement joint programmes on matter of labour and employment, social security and social dialogue. Another Memorandum of Understanding (MoU) was signed between India and Italy for training and education in the fields of labour and employment. The ministry also included the category of ‘Fixed Term Employment Workman’ for all sectors in the Industrial Employment (Standing Orders) Act, 1946 and Rules. Considering the change in employment pattern and the current scenario of employment in India which has transformed from a long-term employment to short-term engagement in form of contract and tempting, the ESI Corporation has approved a Scheme named “ATAL BIMIT VYAKTI KALYAN YOJANA” for insured persons covered under the ESI Act, 1948. This scheme is a relief payable in cash directly to insured persons’ bank accounts in case of unemployment and while they search for new engagement.

Change is inevitable. Most of the suggested changes in the drafts are welcome except a few which probably are a hurried ‘cut and paste’ lacking application of mind. Well the Draft is still open for changes until the end of Jan 2020.