Salient Features and Implementation of Labour Codes 2019-2020

The salient features and implementation of The Code on Wages, 2019 & The Code on Industrial Relations 2020 Dr. G. MANJUNATH, KLS, PhD Additional Labour Commissioner Government of Karnataka Email id: manju_alc@yahoo.co.in Website: http://drmanjunathg.in

LABOUR CODES 4/12/2025 2

THE CODES ON WAGES, 2019 An Act of Parliament received the assent of the President on 8th Aug 2019 To consolidate & amend laws relating to: Wages; (MW act & PW act) Bonus & Equal remuneration Draft Rules by Govt. of Karnataka 2.03.2021 Final Notification awaited. 4/12/2025 3

Code on Wages vs. Repealed Enactments ACT DEFINITIONS SECTIONS SCHEDULES RULES FORMS/NOTIFICATIONS MW ACT (1948) 11 31 1 37 PW ACT (1936) 10 26 - 40 PB ACT (1965) 22 40 4 5 ER ACT (1976) 10 18 - 6 TOTAL 53 114 5 88 COW (2019) 26 69 - 58 I to VI A to E Schedules 4/12/2025 4

The Code on Wages , 2019 State Govt , 24 Key Actors: App Govt , 104 Employer , 169 Employer : 169 Employee: 218 Worker : 18 Central Govt: 40 App. Govt: 104 Central Govt , 40 Worker , 18 Employee, 218 4/12/2025 5

Important Definitions Who is not a Contract Labour? A worker who is regularly employed by the Contractor for any activity of his establishment and his employment is governed by mutually accepted standards of the conditions of employment (including engagement on permanent basis) & Gets periodical increment in the pay, social security coverage and other welfare benefits in accordance with the law for the time being in force in such employment. 4/12/2025 6

Contract Labour Includes INTER STATE MIGRANT WORKER ARE CONTRACT LABOUR PART-TIME EMPLOYEE ARE CONTRACT LABOUR 4/12/2025 7

Who is not a worker? Defense personnel Police and Prison service Managerial and administrative employees Supervisory employees drawing wage of more than Rs. 15k per month ----------------------------------------- Worker Also includes: Working journalists Sales promotion employees 4/12/2025 8

Criteria for fixation of MW Skill of workers required for working under various categories like unskilled, skilled, semi-skilled & highly skilled or geo l area Take into account their arduousness of work hazardous occupations or processes Rule 3 of Karnataka Rules Central Government to fix National Floor wage Scheduled Employment removed/Power of State Govt. to add to schedule is removed. IMPACT Procedure for fixing/revising MW Committee method (Tripartite Body appointed by SG) Notification method 4/12/2025 9

Eligibility and Payment of Bonus Ceiling limit yet to be notified 30 days of work in an accounting year Annual minimum bonus 8.33% Annual maximum bonus 20% Can ex-gratia or total bonus payable exceed 20% ?-NO. (S. 26(5) 4/12/2025 10

Inspections & Compliance The code provides for: Inspection scheme to be notified by the Govt Web-based Inspection Calling of information electronically Randomized selection of inspection Regulation of Inspections Inspector-cum-facilitator to advice employers and workers relating to compliance Inspections are subject to instructions and guidelines issued by the government 4/12/2025 11

Substantial compliance under the Code Every Employer SHALL pay all amounts required to be paid under this code to every employee employed by him. NOT to discriminate among employees on the ground of gender with regard to wages in respect of the same work or work of a similar nature NOT to reduce the rate of wages NOT tomake any discrimination on the ground of gender while recruiting 4/12/2025 12

Substantial compliance under the Code Payingwages less than the minimum rate of wages notified by the appropriate Government. Pay overtime rate which is twice the normal rate of wages Pay wages in: current coin currency notes cheque crediting the wages in the bank account electronic mode. Pay Wages within two working days of removal, dismissal, retrenchment or resignation of an employee 4/12/2025 13

Substantial compliance under the Code Shall deduct from wages only in accordance with the provisions of the code & only for the purposes mentioned. Shall NOT commit any default after deducting from the wages & not depositing in SS account Shall NOT impose any fine without the previous approval of the App Govt. or of such authority prescribed. (S. 19) 4/12/2025 14

Procedural compliance Every employer to whom this code applies shall maintain: A register containing the details of persons employed Muster roll Wages & such other details in the prescribed manner Display notice of the abstract of the code, category-wise wage rates of employees, wage period day and date time of payment of wages Issue wage slips The names and addresses of the Inspector-cum Facilitator having jurisdiction 4/12/2025 15

Provision for wages for certain categories For those employees who are Dismissed Retrenched Resigned Rendered unemployed due to closure of the establishment The wages payable to him shall be paid within two working days Persons who can file claims under the Code: Employee concerned Trade union duly registered Inspector-cum facilitator Time limit for filing claims is 3 years Appeal within 90 days of the orders Appeal to be disposed off within 3 months. 4/12/2025 16

Who can file cases in the Court of Law? A complaint has to be made by or under the authority of the government An officer so authorized by the Government An employee A registered trade union Inspector-cum-facilitator 4/12/2025 17

Provisions of Indian Penal Code, 1860 Any person required to produce any Documents /information to I-C-F shall be deemed to be legally bound within the meaning of S. 175 & S. 176 of the IPC S. 175.Omission to produce document or electronic record to pubic servant by person legally bound to produce it. S. 176. Omission to give notice or information to public servant by person legally bound to give it. S. 94 of CRPc, 1973 is applicable u/s 51(8) (Powers of ICUMF) S. 94. Search of place suspected to contain stolen property, forged documents, etc- 4/12/2025 18

Penalties for offences under the Code For Substantial violations: Punishable with fine up to Rs 50,000; Repeated offence <5 yrs punishable with imprisonment for a term up to 3 months or with fine up to Rs one lakh; Contravenes any provision, rules, order made punishable with fine up to Rs 20,000; Repeated offence <5 yrs punishable with imprisonment for a term up to one month or fine up to Rs 40,000 or with both; For Procedural violations: Non-maintenance or improper records, punishable with fine up to Rs 10,000 4/12/2025 19

Compounding of Offence under the Code An offence not being ansubstantial offence- the code provides for compounding of offence Gazetted Officer so appointed will have powers to levy a sum 50% of maximum fine provided for such offence No prosecution if an offence is been compounded and any pending procedure before any court, intimation to be given by the Gazetted officer and the employer may be discharged 4/12/2025 20

Burden of Proof When a claim is made before any authority against the employer for: Non-payment of equal remuneration Non-payment of bonus Less payment of wages Less payment of bonus Making un-authorized deductions from the wages of an employee Then the burden of prove that the said dues have been paid shall be on the Employer. 4/12/2025 21

Exemption of employer from liability When an employer is charged with an offence under this Code: He is entitled under this code to make a complaint before the court against any other person whom he charges to be the actual offender. Employer then has to prove to the satisfaction of the court that- Due diligence was used by him to execute the code The other person committed the offence without his knowledge, consent or connivance However, employer will be examined on oath, examination of evidence and witnesses and cross-examination procedures shall be followed Thereafter, the employer shall be discharged from any liability under this code. 4/12/2025 22

Miscellaneous Fixation of MW to be kept at the minimum Disqualification for Bonus- Conviction for Sexual Harassment Chapter on Bonus applicable to establishments employing 20 or more persons CAB/SAB to advise on providing increasing employment opportunities for women Discretionary powers to levy compensation up to10 times in addition to the claims determined. IMPACT Claims can be filed by the concerned employee ;TU; ICF within three years time period. Disputes pertaining Bonus is considered an ID 4/12/2025 23

THE I R Codes vs. Repealed Enactments ACT DEFINITIONS SECTIONS SCHEDULES RULES FORMS/ NOTIFICATIONS T U A, 1926 8 35 I -III 3/21 A - F IE(S0) A, 1946 9 20 Two Schedules 2/11 I - III I D A, 1947 40 84 5 9/93 A-QB TOTAL 57 139 10 14/125 IR CODE, 2020 44 104 3 5/59 Forms 34 4/12/2025 24

Definitions: S 2(l) employee introduced for the first time S 2(m) employer Definition is enlarged & includes: Contractor; Legal reps of a deceased employer. S 2(o) Fixed term employment important 3 provisos are provided. (Working & service conditions, statutory benefits & gratuity) IMPACT S 2(p) industry elaborate & given effect in the code which was pending since 1982. Inclusion (a) & (b) removed Exclusion out of 9 items in the original ID act only 3 finds its place, most important exclusion is domestic service, however CG has powers to exclude any other activity. 4/12/2025 25

Definitions: S 2(zq) wages , same as in code on wages, newer interpretation, 11 items are excluded. IMPACT S 2(zr) worker defined for the first time, instead of workman. (excludes apprentices as defined under AA) & includes: working journalists; sales promotion employees; workers who are terminated; supervisory workers drawing more than 18 k are excluded 4/12/2025 26

Grievance Redressal Committee Setting up of GRM Very significant changes & differences u/s 9-C of ID act (2010) 11 sub-sections No of members is now 10, earlier 6. Aggrieved Worker with individual grievance may file an application before GRC within one year from the date of cause of action of such dispute GRC to conduct its proceedings within 30 days Decision making process is explained in detail. (R.7) Worker can seek an appeal if not satisfied with the decision of the GRC, within 60 days & file an application before the conciliation officer through the Trade Union. A worker can also directly approach Tribunal for adjudication of the dispute after the expiry of 45 days from the date he has made an application to the conciliation officer. IMPACT: Worker can seek Redressal of his individual dispute FIRST at GRC THEN to CO, Tribunal 4/12/2025 27

GRC and WC Functions: Resolution of disputes arising out of individual grievances. Empowered to raise the dispute before GRC, Conciliation officer, or directly to Tribunal. Institutional resolve individual disputes within the industry. (Similar to ICC under POSH Act, 2013) Functions: To securing and preserving amity and good relations b/n employer & workers To comment upon matters of their common interest/concern Endeavour to compose any material difference of opinion in respect of such matters promote measures for mechanism to 4/12/2025 28

Trade Unions what is new? A declaration to be made by an affidavit while Applying for registration Copy of the resolution of members of each TUs agreeing to constitute a federation Deemed registration under the code (9(4) & proviso Appeal is with the Tribunal Objects of general and separate funds now delegated to appropriate Govt. Adjudication of disputes of Trade Unions (22) to Tribunals No mention of council of ministers or office of profit becoming executive OR office-bearers of TA 4/12/2025 29

Negotiating union or negotiating council Very significant changes Matters for negotiation (Draft Central & State Rules) If only one TU is registered then the employer shall recognize such TU as a sole negotiating union More than one TU 51% or more workers supporting to be verified More than one TU but less than 51%, employer to constitute a NC consisting of reps from registered TUs having not less than 20% of support from workers Statutory responsibility is on the employers. 3 years of recognition, but extendable up to 5 years if mutually decided. Facilities to be extended by the employer to the NU or NC. IMPACT 4/12/2025 30

STANDING ORDERS Substantial changes Code applies this chapter to 300 or more workers IMPACT Proviso providing power to the app. Govt. to reduce the number of workers is withdrawn. Sub-section (2) added for exclusions under the code Draft Model standing orders notified by the Central Govt. for: (S.29) Service sector on 31.12.2020 Manufacturing sector on 31.12.2020 Mines on 31.12.2020 First Schedule Matters specified 4/12/2025 31

Procedure for certification Substantial changes Employer to consult TUs or recognized NU or member of the NC. Reps of workmen removed. IMPACT Electronic submission allowed Model standing shall be deemed to be certified & employer shall forward this to the CO.(30(3) CO to issue notice not forwarding the copy. CO to seek comments, not objections. Time frame fixed for certification process, ie 2 months, otherwise it will be deemed certified. Joint submission of standing orders allowed. If the existing SO is consistent with codes/rules, it is deemed certified u/s 8. (S.30(11). 4/12/2025 32

Time-limit for completing disciplinary proceedings & liability to pay subsistence allowance Substantial changes Time-frame fixed at 90 days to complete investigation or enquiry from the date of suspension IMPACT Disputes regarding subsistence allowance removed Notice of Change (9-A vs. 40) Substantial changes No notice is required under two additional proviso: emergent situation which requires change of shift or shift working, in consultation with GRC In accordance with the orders of the app. Govt. or in pursuance of any settlement or award Power of App. Govt. to exempt the provisions of section 40 is retained. 4/12/2025 33

Conciliation and adjudication of dispute Substantial changes Under the code no notice of strike/lockout under PUS Time limit to file an industrial dispute is two years. Failure report to be sent to the Govt. as well as to the parties concerned. (Ref by Govt removed) IMPACT Report to be sent within 45 days, earlier 14 days removed. Proviso for sending report under sec. 62 is 14 days. 53(6) is new inclusion Either parties can approach the Tribunal directly within 90 days on receiving the report on matters not settled. IMPACT 4/12/2025 34

Industrial Tribunal Substantial changes Schedules removed under the code IMPACT One person is replaced now by two members one Judicial and Administrative Member. Cases to be decided by IT by both the members are provided under sub-section (7)(i) to (e). Other cases to be decided by either JM or AM. Decision of Tribunal shall be by consensus of the members differences in any point/points shall be referred to Govt, who shall appoint a JM to decide on the basis of majority. (S. 47) IMPACT 4/12/2025 35

Form of award, its communication & commencement Substantial changes Award may be signed electronically. No dissent possible under the code. Publication not required. Award to be sent to concerned parties & the app. Govt directly by Tribunal. Award enforceable from expiry of 30 days of communication to the parties. 4/12/2025 36

Commencement and conclusion of proceedings Substantial changes Commencement of conciliation proceedings under the code is on the date of the first meeting held by the conciliation officer. Conclusion of conciliation proceedings is on the date of failure of conciliation recorded by the CO deviation from the Act. 4/12/2025 37

Prohibition of strikes and lockouts Substantial changes Public Utility Services deleted IMPACT Six weeks notice replaced by 60 days before striking or lockout. Within 14 days of giving such notice Sub-sections (e), (f) & (g) added 4/12/2025 38

SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT & CLOSURE IN CERTAIN ESTABLISHMENTS Substantial changes Number of workers increased from 100 to 300 under the code. App. Govt may notify such higher numbers of workers than 300. Unfair Labour Practices (Schedule V vs. II) On the part of the workers and Trade Unions of workers. (Explanation included) go-slow shall mean an occasion when more than one worker on an establishment conjointly work ore slowly and with less effort than usual to try to persuade the employer of the establishment to agree to higher pay or better service condition or such other demand. usual mean- Where the standard has been specified for a worker for his work either daily, weekly ore monthly basis & or such rate of work which is the average of work for the previous three months 4/12/2025 39

Cognizance of Offence and Composition of offences Abatement of such offence has been left out (S.87) Composition of offences included (S.89) Power to exempt (S. 36-B (1984) vs.96) Exemptions may establishments or new undertakings or class of new industrial establishments IMPACT Jurisdiction of civil courts barred and no injunctions possible. be provided for new industrial 4/12/2025 40

Dr. G. MANJUNATH, KLS, PhD Additional Labour Commissioner Government of Karnataka Email id: manju_alc@yahoo.co.in Website: http://drmanjunathg.in/

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