Labour Reforms Current Affairs

Cabinet approves new wage code bill to ensure minimum wage across all sectors

The Union Cabinet has approved the Labour Code on Wages Bill which will ensure a minimum wage across all sectors by integrating existing labour related laws.

The Labour Code on Wages Bill consolidates the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936 and the Equal Remuneration Act, 1976.

Background

At present, laws on wages do not cover workers getting monthly wage of more than Rs 18,000. Moreover, these laws are only applicable for scheduled industries or establishments. Even there are about half a dozen definitions of wages in various acts across the Centre and states, which employers have to grapple with. The Second National Commission on Labour has recommended that the existing labour laws should be broadly grouped into four or five labour codes on Wages; Industrial Relations; Social Security & Welfare and Safety and Working Conditions on functional basis.

Key Facts

Under the Labour Code on Wages Bill, the Union Labour Ministry is planning to streamline the definition of wages by amalgamating four wage-related statutes. The code empowers the Centre to set a minimum wage across sectors, and states will have to maintain that. However, states will be able to provide higher minimum wage in their jurisdiction than fixed by the Centre since labour is subject in the concurrent list.

The Labour Code on Wages Bill also marks the first major initiative of Union Government in amalgamating labour laws for improving the ease of doing business as well as ensuring universal minimum wage to all. The minimum wage will be applicable on all classes of workers, even workers getting monthly pay of higher than Rs 18,000 will be legally entitled to a minimum wage. The proposed legislation is expected to benefit over 4 crore employees across the country.

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Lok Sabha passes Employee’s Compensation (Amendment) Bill, 2016

The Lok Sabha has unanimously passed the Employee’s Compensation (Amendment) Bill, 2016 to reduce litigation in cases of disputes arising over compensation to workers.

The Bill seeks to amend the Employee’s Compensation Act, 1923. This law provides payment of compensation to employees and their dependents in the case of injury by industrial accidents, including occupational diseases.

Key Features of Bill

  • Duty to inform employee of right to compensation: Mandatory for employer to inform the employee of his right to compensation under the parent Act.
  • Such information must be given in writing in Hindi, English, or the relevant official language at the time of employing him.
  • Penalty for failure to inform: If employer fails to inform his employee of his right to compensation he will be fined penalty between Rs. 50, 000 to Rs. 1 lakh.
  • Appeals from the Commissioner’s order: Any dispute related to an employee’s compensation will be heard by a Commissioner (with powers of a civil court) only if the amount in dispute is ten thousand rupees. It allows Union Government to further raise this amount.
  • In parent Act, appeals related to a substantial question of law from the Commissioner’s order will lie before the High Court.
  • Deletion of withholding payments pending appeal provision: Earlier in the parent Act, any payments towards the employee can be temporarily withheld if an employer has appealed against a Commissioner’s order in High Court. This provision has been deleted.

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