The Central Government in its effort to rationalize labor law and to brought
different kind of employees and workers and their working conditions under a
single code decided to amalgamate 13 labor laws consisting of around 600+
provisions into one single Code with 143 provisions. The Code has been
introduced to prescribe uniform standards, reducing paperwork, promoting ease of
doing business and reducing administrative bottleneck such as multiple
The Code will mainly cover majorly cover the Factories Act, Contract Labor Act,
Inter-state Migrant Workers Act and such other 10 other labor laws and will come
into effect from a date as notified by the Central Government.
Broadly, most of the above-referred labor laws are reasonably old and are
indispensable to the regulated working populations and governs the conditions of
working of worker at any particular establishment and/or worksite.
This article provides an overview of the key modifications which will be
introduced by the Code.
Expansion and harmonization of Definitions
The definitions under the Code expands the definition of “Contract Labor”
now includes the inter-state migrant labors who are employed by the Principal
Employer. Similarly, the definition “Family
” will now include grandparents who
shall be eligible for welfare provisions of the worker.
In addition to this, the Code has also harmonized the definitions of Employee
and has further extended the threshold limit for the sales
promotion employees from INR 1600 per mesem to INR 18,000 per mensem.
Threshold limit of Factories has also expanded to 20 or more workers with aid of
power and 40 or more workers without aid of power but the same shall exclude
railways, running shed or hotel, restaurant or an eating place.
The definition and scope of Inspector
also expanded to Inspector-cum-Facilitator
and also expands the scope of function of an
New definitions such as Banking Company, Core Activity
been inserted in the Code.
Registration and Licenses
Central Government in it approach towards Digital India, vide the Code has
introduced E-Registration Process wherein any establishment to which the Code
applies can make an electronic application for getting its establishment
registered. The employer shall also be allowed to electronically submit an
intimation to the authority about any change in its ownership and/or management.
Establishments such as factories, mines and those hiring Beedi and Cigar workers
will be required to obtain additional licenses for its operations.
Additionally, Registers, Records and Returns (as prescribed by appropriate
Government) can now also be maintained electronically and even the Inspector cum
Facilitator (erstwhile Inspector under the existing law) shall have an authority
to perform web-based random inspection for reviewing and verifying of online
documents submitted by an employer.
Welfare Facilities, Working Hours and Annual Leave
The Code has a specific Chapter in relation to the Welfare Activities which
every employer/establishment needs to maintain in its establishment.
activities shall primarily include:
- Adequate and separate washing facilities for men, women;
- Separate locker rooms and bathing facilities for men, women and
- Provision of seating for the employees who are obliged to work in
- Canteen facilities wherein 100+ employees, including contract labor are
normally working (previously 250 employees)
- Medical examination of every worker on specific intervals for the mine
- Provision of adequate first-aid boxes which should be readily accessible
to all workers during working hours
Additionally, the Government also have a power to add any such other welfare
measures to any establishment for improving the standard of living of workers
including mandating the provision for Crèche facility for use of children under
age of 6 years of employees, wherein 50 or more workers are working.
In relation to the Working Hours, the Code states that no worker shall be
allowed to work for more than eight hours and any female workers shall also be
allowed to work in night shifts (i.e. after 7:00 PM and before 6:00 AM).
Additionally, the Code has prescribed maximum 144 hours of work for a working
journalist during a period of four consecutive weeks.
The workers working in a mine shall be allowed to work for a maximum 10 hours in
a day inclusive of overtime.
The Code provides that, any worker who works who works in an establishment or
class for more than the prescribed working hours shall be eligible for overtime
and the same shall be calculated at twice the rate of wages for the additional
work carried out the worker.
Provisions relation to Inter-State Migrate Workers
The Central Government in order to address the concerns of contract- labor and
inter-state migrant workers has addressed both of them in different parts in the
Code wherein, the Code has specified that Part I of Chapter IX of Code shall
only apply to those establishments who are engaging 50 or more contract labours
but shall not be applicable to those establishments in which work of an
intermittent casual nature is performed.
The Code specifies that the Welfare
Activity defined under the Code shall be provided by the Principal Employer and
any failure of Contractor to make payment to contract labor will make Principal
Employer liable to make payment, however with an option of recovering of amount
by way of deduction or as a debt from Contractor. Further to this, the Code
provides for issuance Experience certificate to its contract labor giving
details of work performed.
Similarly, with respect to inter-state migrant workers, the applicability shall
be to those establishments who are employing 10 or more workers and to provide
suitable working conditions to the worker and to further extend all benefits to
such workers which is generally available to a worker of that establishment such
as ESIC and EPFO. The employer shall also liable to pay to every inter-state
migrant worker, every year, a lump sum amount as journey allowance towards his
travel to his native place.
Occupational Safety and Health Advisory Board and other Authorities
The Code has introduced a single National Occupational Safety and Health
Advisory Board which will be constituted by Central Government and such other
boards which will be constituted by State Governments. The major role of these
boards is to provide insight to Government in relation to rules, regulations and
to further facilitate functioning and execution of the Code.
The National and State Boards shall replace the existing advisory boards
constituted under different legislations such as Contract Labor Act and the
Building and Construction Workers Act.
Additionally, the Code further prescribes for constituting Safety Committee and
Safety officers in any particular establishment for addressing the issues
related to safety and working conditions of the workers in that establishments.
Social Security Fund
The Central Government through this Code has also tried to addressed the issue
involving 'unorganized workers' and their welfare and has proposed for
establishment of Social Security Fund, which will be created from the amount of
fine/penalty as received from compounding of offences or through any source as
may be prescribed by the appropriate Government. The fund so collected shall be
expended for the welfare of workers in such manner as may be prescribed
including transferring the amount of Fund to any other Fund established under
any other law for welfare of unorganized workers.
Offences and Penalties
The Central Government vide this Code has introduced a concept of compounding of
offences wherein certain offences either before or after holding of enquiry or
before institution of prosecution may be compounded by payment of penalty amount
ranging between 50% to 75% of the fine amount and on payment of such payment the
person shall be discharged of the penalty or offence without any further
The Code once notified will not only improve the working condition of the
workers but will also reduce employer's burden as it will substitute multiple
registration into one common license. Additionally, the clarification and
procedure in relation to different establishment provided in the Code shall
bring uniformity across the establishments thereby promoting ease of doing
business and reducing administrative bottleneck.
Award Winning Article Is Written By: Mr.Monar Purohit
Authentication No: OT30289238619-28-1020