The Parliamentary Committee on Labour recently presented its report regarding the Industrial Relations Code, 2019 (IR Code). The IR Code is the third of four bills structured to consolidate and rationalize over 40 central laws that oversee labour affairs. Two previous related bills include the Code on Wages, 2019 and the Occupational Safety, Health, and Working Conditions Code, 2019.
Handling of Wages During Natural Calamities
The committee mentions in the report their stance on wage payment during natural disasters. They suggest that the requirement to pay wages to workers until industrial operations resume might be unreasonable. Their reasoning behind this suggestion is that industries shouldn’t be burdened in situations beyond their control. The committee proposes that the government step in and aid industries in such cases. In this context, they designate Covid-19 as a natural disaster.
Mandatory 50% Wage Payment
The IR Code mandates that employers must pay 50% of wages to the employees who are laid off due to supply shortages of power, coal, raw materials, etc., for a period of 45 days. The Industrial Relations Code Bill, 2019 was introduced in the Lok Sabha and referred to the Standing Committee on Labour in December 2019 amid the ongoing lockdown. The draft report was then circulated among members via email on April 15, and the final adopted report was approved by the Speaker.
Bill Replacement and the Key Features
Introduced in the Lok Sabha, the Industrial Relations Code, 2019 aims to replace three labour laws: The Industrial Disputes Act, 1947; The Trade Unions Act, 1926; and the Industrial Employment (Standing Orders) Act, 1946.
Trade Unions and Negotiating Unions
According to the new Code, a minimum of seven members from a trade union can apply for its registration. Trade unions with a membership of at least 10% of the workers or 100 workers, whichever is less, will be registered. The new law allows the central or state government to recognise a trade union or federation of trade unions as Central or State Trade Unions. Additionally, if there’s only one trade union in an industrial establishment, such trade union will be recognised as the sole negotiating union of the workers by the employer.
Lay-off and Retrenchment
The Code defines lay-off as the inability of an employer to provide employment to a worker due to limitations like shortage of coal, power, or machinery breakdown. It also states that employers can terminate a worker’s services – a process known as retrenchment. Before laying off, retrenching or closing an establishment, employers of establishments with at least 100 workers are required to take prior permission from the central or state government. This threshold can be modified by the central or state government. Any person who contravenes this provision is liable to a fine between Rs 1 lakh and Rs 10 lakh.
Resolution of Industrial Disputes
In the event of industrial disputes, the central or state governments may appoint conciliation officers to mediate and promote settlement. These officers will investigate the dispute, conduct conciliation proceedings, and attempt to reach a fair and amicable settlement. If no settlement is reached, any party involved in the dispute can apply to the Industrial Tribunal setup under the Code.