The recent provision in the Code on Wages 2019 which states that ‘conviction for sexual harassment’ can be used as a reason for withholding bonus payments to employees is making headlines. This law, which was drafted by the Central government in the Draft Code on Wages (Central) Rules, 2020 in July of the same year, has been placed in the public domain to invoke public debate and suggestions.
Key Points of the Code
The Code lays down regulations for annual bonus dues accrued by employees, functioning as a replacement for the Payment of Bonus Act, 1965 that only denies bonus payment in instances of fraud, violent behavior, theft or sabotage. According to the Payment of Bonus Act, 1965, an employee is entitled to a minimum bonus of 8.33% of the salary or wage earned during the accounting year. It caps at a maximum of 20% of the earned salary or wage. The act applies universally to all employees that earn a salary of up to Rs. 21,000 per month.
In Section 29 of the Code, it is mentioned that an employee may not receive a bonus under this Code if he is dismissed from service for reasons including fraud, riotous or violent behavior on the employer’s premises, theft,misappropriation or sabotage of any property of the establishment, or conviction for sexual harassment. The new section regarding sexual harassment doesn’t specify the location, indicating that it can occur outside of the workplace as well.
Implications of the Amendment
This revision proves significant as it encourages individuals to monitor their behavior within the workplace, given the risk of losing benefits over misconduct. This step also intensifies the seriousness attributed to instances of sexual harassment not only in the workplace but generally as well. The move is seen as an additional deterrent apart from the Prevention of Sexual Harassment (POSH) law of 2013.
Key Aspects of the Code on Wages Act, 2019
The new wage code eradicates multiple wage definitions. This move potentially reduces litigation and decreases compliance cost for employers. The minimum wage is linked to the skills of the employee and their place of employment across India. The Code ensures the universality of minimum wages and timely payment to all employees, regardless of the sector or wage ceiling, ensuring every worker’s right to sustenance.
The Central government will set a National Floor Level Minimum Wage that will be revised every five years. Contrarily, states will determine minimum wages for their territories, which can’t be lower than the floor wage. The Code amalgamates four labour laws: the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
The Prevention Of Sexual Harassment Law 2013
Under the POSH law, sexual harassment is defined by any unwelcome acts or behavior including physical contact and advances, demand or request for sexual favors, making sexually colored remarks, showing pornography, and any other unwelcome physical, verbal or non-verbal conduct of a sexual nature.
Companies are required by the POSH law guidelines to create an Internal Complaints Committee (ICC) to investigate complaints of sexual harassment at the workplace. The ICC can make recommendations to employers regarding actions required as a result of its inquiry into such complaints. If the ICC supports a complaint, it could be interpreted as a conviction. The ICC has the power to decide if someone is guilty and report it to the police, although not all sexual harassment cases lead to a police report.
