Labour Welfare and Social Security Codes in India, Study notes of Labour Law

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LABOUR & INDUSTRIAL LAW – II (SEM-09)

LW 5013

NOTES

MODULE 1: CONCEPTUAL FRAMEWORK OF LABOUR LAW

Conceptual Framework Labour laws in India are enacted both by the Central and State Government with some overlap between the two in implementation. India over the years has had a multitude of laws governing labour and employment which has usually made compliance very arduous for businesses but has usually provided a fair amount of protection to employees. In 2020/2021, the Indian Government has subsumed over 29 Central laws and corresponding State laws in four major Labour Codes, with the aim to simplify, modernise, and restructure the current regime and increase the ease of doing business in India. The Labour Codes have been enacted and are likely to be implemented in 2021. For most businesses, this year would involve straddling the requirements of existing laws while modifying their current practices to comply with the changes coming with the implementation of the Labour Codes. The Government of Indi a has four Labour Codes: the Code on Wages 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020. All the Labour Codes have been aimed at broadening the scope of coverage, rights and protections, reducing multiplicity in definitions, authorities and compliances, and embracing more digitisation in registrations/compliances. However, at the same time, the Labour Codes are largely a consolidation of existing laws rather than a significant overhaul of them, with there not being a substantial change in the position of law itself. The Code of Wages, 2019 (“Wage Code) amalgamates four labour laws pertaining to minimum wages, payment of wages, applicable deductions, statutory bonus and equal remuneration to employees. The Wage Code covers the different aspects of wages payable to employees. The most significant aspect of the Wage Code is the uniform definition of wages which has also been adopted across the other three Labour Codes as well as broadening its applicability to all establishments.

STs, and OBCs) and women. Social Justice is the foundation stone of Indian Constitution. Indian Constitution makers were well known to the use and minimality of various principles of justice. Although social justice is not defined anywhere in the constitution but it is an ideal element of feeling which is a goal of constitution. Feeling of social justice is a form of relative concept which is changeable by the time, circumstances, culture and ambitions of the people. Social inequalities of India expect solution equally. Under Indian Constitution the use of social justice is accepted in wider sense which includes social and economical justice both. In D. S. Nakara v. Union of India , the Supreme Court has held that the principal aim of a socialist state is to eliminate inequality in income, status and standards of life. The basic frame work of socialism is to provide a proper standard of life to the people, especially, security from cradle to grave. Amongst there, it envisaged economic equality and equitable distribution of income. This is a blend of Marxism & Gandhism, leaning heavily on Gandhian socialism. From a wholly feudal exploited slave society to a vibrant, throbbing socialist welfare society reveals a long march, but, during this journey, every state action, whenever taken, must be so directed and interpreted so as to take the society one step towards the goal. The social justice scenario is to be investigated in the context of two streams of entitlements: (a) sustainable livelihood, which means access to adequate means of living, such as shelter, clothing, food, access to developmental means, employment; education, health, and resources; (b) social and political participation (enabling or empowering means), which is built on the guarantee of fundamental rights, and promotion and empowerment of the right to participation in the government, and access to all available means of justice, and on the basis of which “justice as a political programme” becomes a viable reality. We require therefore a study based on select illustrations of various issues relating to government policies on topics such as: (a) the right to food and water; (b) housing, which includes resettlement and rehabilitation; (c) access to education, (d) access to provisions of health and healthcare, (e) right to work, and (f) access to information and the right to communication. In short, one of the important ways in which the inquiry will proceed will be through taking stock of various forms that have occasioned the articulation of ideas of social justice. Governmental justice consists of various welfare schemes, law, legal literacy, administrative forms of arbitration such as tribunals, boards, courts, public

interest litigation, new legal education, plus the constitutional idea of protection of weaker sections of the society and introduction of positive discrimination. Concept of State Regulation and Labour Welfare The concept of labour welfare originated in the desire for a humanitarian approach to ameliorate the sufferings of the workers and their families on account of the baneful effects of large-scale industrialization like undesirable social consequences and the labour problems which have evolved in the process of transition from tradition to modernity. Later it became a utilitarian philosophy which worked as a motivating force for labour and for those who were interested in it. Lastly, labour welfare received inspiration from the evolution of the social thought in regard to democracy and welfare state. The I.L.O. (SEA) session held at New Delhi in 1947 defined Labour Welfare as “such services, facilities and amenities, which may be established in or in the vicinity of, undertakings to enable persons employed therein to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and good morale. The Committee on Labour Welfare (1969) defined labour welfare to “include such services, facilities and amenities as adequate canteens, rest and recreational facilities, sanitary and medical facilities, arrangements for travel to and from work and for the accommodation of workers employed at a distance from their homes and such other services, amenities, and facilities including social security measures as contribute to improving the conditions under which workers are employed”. Scope of Labour Welfare : Labour welfare is a dynamic concept which acquires as new dimensions with the changes in the environment of the industry. It was as early as 1931 that „Whitley Commission observed, “Labour welfare is one which must necessarily be elastic, bearing a somewhat different interpretation in one country from another, according to the different social customs, the degree of industrialization and the educational development of the workers”.

(Article 12 to 35) of the Constitution covers the fundamental rights of its citizens which includes Equality before the law, Religion, Sex, caste, place of birth, the abolition of untouchability, freedom of speech and expression and prohibition of employment of children in factories. The Government of India Act, 1935 defines “weaker sections” as class or classes of people who are suffering from educational and economic backwardness, as well as some aspects of social life, due to traditional customs of untouchability, tribal background, tribal way of life or other backwardness. Different resolutions of the Indian government have divided the weaker groups into three main categories: SC, ST & OBC. But this list is not exhaustive. Women, aged persons, disabled, sexual minorities are also deprived of the benefits and they are ill-treated. Thus, weaker sections that face discrimination include- women, scheduled castes(SC), scheduled tribes (ST), children, disabled, aged, poor migrants, sexual minorities, people suffering from HIV/AIDS, and other backward classes. The Constitution has provided provisions not only for SC/STs, backward classes but also for the other weaker sections of society. Constitutional makers have provided different safeguards in the Constitution of India for the upliftment and protection of the weaker section of the society. They are as follows:

• Article 14 of the constitution provides for the equal protection of law and equality before the law. Therefore, irrespective of class every citizen has the right to be treated equally before the law.
• Article 15 prohibits discrimination based on disability, restriction, or the grounds of castes, religion, sex, or place of birth. Whereas nothing in this article will prevent the state to make special provisions and arrangements for the betterment of : o The children and women [Article 15(3)]. o Socially and economically backward classes/ scheduled castes / scheduled tribe [Article 15(4) & Article 15(5)].
• Article 16 provides equal opportunities to all citizens in matters of employment or appointment of any office under the state. States can make special provisions related to the reservation, appointment for the backward classes, and the state has the authority to decide

whether the person falls in the definition of backward classes. This provision helps to strengthen the weaker section in monetary terms.

• Article 17 abolishes untouchability and it is a punishable offence under the Protection of the Civil Rights Act, 1955.

Article 38 states must ensure and promote the welfare of the people by promoting and securing as effectively as may be a social order and must act to minimize inequalities in terms of income, status, facilities, and opportunities available. Article 39 provides the policy which is to be considered by the states. Like, men and women are equally entitled to adequate means of livelihood, equal pay for equal work for men and women, the health of the worker, no abuse against youth, children are provided with the opportunity to develop healthily to secure, and no citizen must be forced out of economic necessity to pursue something which unsuited for their age or quality.

• Article 39A states must provide free legal aid to the people who can’t afford it because of economically weaker sections or due to some disabilities.
• Article 41 provides that the state has the power/capacity to make provisions within the economic limits to secure the right to education, the right to work, and the right to public assistance in certain cases. For this Article, certain cases include old age, disablement, sickness, or any other condition. The Supreme Court while interpreting this article in many cases held that the state must make effective provisions for securing the rights of the disabled and for the people suffering from other infirmities within the economic capacity of the state.
• Article 42 provides that the state must make provisions to secure any other hazardous employment in the just and humane conditions of work and maternity relief. Protecting the employment of women during the maternity period.
• Article 46 under the Directive Principles of State Policy provides that the State must promote the educational and economic interests of the scheduled castes, scheduled tribes, and the weaker sections of the society with due care. Also, the state must protect the SC, ST & weaker sections from exploitation and social injustice.
• Part XVI of the Constitution deals with special provisions relating to certain classes. This part provides political empowerment to the scheduled castes, scheduled tribes, and other classes. Article 330 and Article 332 reserve seats for scheduled castes and scheduled tribes in the house of people and legislative assemblies of the state respectively. National

Commission for scheduled castes and scheduled tribes have been established under Article 338 and Article 338A respectively.

• Article 340 provides that the president has the authority to investigate the condition of socially and economically backward classes through appointing a commission to investigate. https://blog.ipleaders.in/weaker-sections-society-constitution-socio-legal-analysis/ Recent and Important Judicial Decision regarding Conceptual Framework of Labour Law The Secretary, Ministry of Defence v. Babita Puniya & ors. – The decision in this landmark judgment puts an end to gender discrimination by directing that women in the Short Service Commission (“SSC”) are eligible for Permanent Commission in the Indian Army regardless of their service and is considered as a turning point in the history of the Indian Army. This judgment not only affords women the opportunity to be at par with men in the Indian army but also provides job security and ensures equal opportunity to women in the Indian Army. The SSC female officers who will be eligible for Permanent Commission will be barring women from Permanent Commission is unjustified and violative of Article 14 of the Constitution of India. Union of India v Lt Cdr Annie Nagaraja – In pursuit of the aforesaid judgment, the female officers in the Navy were also held to be entitled to Permanent Commission. The female officers are to be treated equal to its male counterparts for the same role. Dr. Malabika Bhattacharjee v Internal Complaints Committee, Vivekananda College and Others – This case further clarifies that the existing Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act & Rules, 2013 ("PoSH Act"), which prevents and prohibits the sexual harassment of women at the workplace, allows not only for complaints to be made by women, but against persons of any gender. In this case, the action of IC to accept a case under the PoSH Act was challenged by the Petitioner on the ground that the complainant and the respondent were of the same gender and the complaint was not maintainable. The High Court fe observed that:
• The definition of "respondent must be read in concurrence with the rest of the legislation, and stated that "there is nothing in Section 9 of the 2013 Act to preclude a same-gender complaint under the Act.

that statutory provisions which affords dignity and rights to the worker cannot be done away with on account of a pandemic situation by the Gujara Government. In this regard, the pandemic does not qualify as "public emergency within the purview of Section 5 of the Factories Act, 1948 threatening the security of the nation. It was noted that the notification violated the worker's right to life and right against forced labour guaranteed by Articles 21 and 23 of the Indian Constitution and the Court directed the payment of overtime wages to all eligible workers who have been working since the notification was rolled out. Thus, the notification issued by the Gujarat Government was quashed. In the case of Chief Regional Manager, United India Insurance Company Limited v. Siraj Uddin Khan [Civil Appeal No. 5390 of 2019, decided on 11 July 2019] , the SC has reiterated that no individual can claim wages for the period that he/she remained absent without leave or justification. In the present case, the Respondent was relieved from the Allahabad branch of the Appellant to join the Jaunpur branch of the Appellant. However, the Respondent did not join the Jaunpur branch on the assigned date and was unauthorizedly absent from work for four months. Disciplinary enquiry was conducted against the Respondent and an order for reduction of basic pay by two steps was passed in May 2009. However, the Respondent continued to be absent from work until 2012. Consequently, the Appellant passed an order in June 2012, terminating the services of the Respondent. The Respondent preferred a series of writ petitions before the High Court of Allahabad against the above-mentioned orders. The High Court of Allahabad quashed the above-mentioned orders citing procedural lapses in the conduct of disciplinary enquiry, without specially directing the Appellant to provide back wages to the Respondent from

20092012. Upon refusal of the Appellant to pay back wages from 2009 - 2012, the Respondent filed another writ petition before the High Court of Allahabad. The High Court of Allahabad directed the Appellant to pay salary for the period 2009 - 2012, along with 18% interest. The Appellant preferred the present appeal before the SC against this order of the High Court of Allahabad. The two-judge bench of the SC held that, setting aside of the termination order does not automatically entitle the Respondent to the salary for the period 2009 - 2012. The SC differentiated the present case from a situation where an employee was dismissed from service and when such dismissal was set aside, he would automatically be entitled for back wages. The

SC noted that since the Respondent was not kept away from the work on account of dismissal or by any order of the Appellant, the Respondent was not eligible to claim arrears of wages. Therefore, the SC partly allowed the appeal and directed the Appellant to consider the claim of back wages of the Respondent and pass appropriate orders with reasons. In Pankaj Prakash v. United India Insurance Company Limited and Another [Civil Appeal No. 5340-5341 of 2019, decided on 10 July 2019] , the SC held that all public servants are entitled to know their grades in an annual performance appraisal report (APAR). The Appellant was aggrieved by the fact that the entries in his APAR for two years were not disclosed, as a result of which he was unable to submit a representation for promotion at the particular time. The Appellant filled a writ petition before the High Court of Allahabad against such action of the employer i.e. Respondent. The High Court of Allahabad held that in the absence of an adverse entry or an entry below the benchmark, the failure to communicate the grade in an APAR did not result in an actionable grievance. The Appellant preferred an appeal against this judgment of the High Court of Allahabad. The SC held that as per the decisions of the SC in Dev Dutt v. Union of India [(2008) 8 SCC 725] and Sukhdev Singh v. Union of India [(2013) 9 SCC 566] , it is mandatory that every entry in the APAR of a public servant must be communicated to him/her within a reasonable period. Apart from ensuring transparency in the system, such disclosures also ensure that a public servant is given reasonable opportunity to make representations against the gradings if he / she is dissatisfied with the results. Further, the Union of India had also issued Office Memoranda on 14 May 2009 and 13 April 2010 seeking compliance by all ministries and departments. Moreover, on 19 October 2012, a specific communication was also addressed to public sector insurance companies. Therefore, the SC disagreed with the reasoning given by the High Court of Allahabad and held that non-communication of the entries in an APAR, whether good or bad grades, is a matter in respect of which a legitimate grievance can be made by the Appellant. Accordingly, the SC directed the Appellant to communicate the details of the APAR to the Respondent within a period of one month from the date of receipt of this order. In Dr Pooja Jignesh Doshi v. The State of Maharashtra and Another [Writ Petition No. 1665 of 2015, decided on 3 July 2019] , the division bench of High Court of Bombay (Court) reiterated that even in case of birth of a child by surrogacy, the parents who have lent the ova and

Establishment : An “establishment” is (i) any place with ten (10) or more workers where any industry, trade, business, manufacturing or occupation is carried on; or (ii) a motor transport undertaking, newspaper establishment, audio-video production, building and other construction work or plantation with ten (10) or more workers; or (iii) factory in which ten (10) or more workers are employed; or (iv) a mine or port or vicinity of port where dock work is carried out4. Hazardous Process : The OSH Code defines a “hazardous process” as any process or activity in relation to specific industries (set forth in Schedule I of the OSH Code), where, unless special care is taken, raw/intermediate/finished/bye-products, etc., as the case may be, would:

• Cause material impairment to the health of the persons engaged in or connected herewith; or
• Result in pollution of the general environment5. Principal Employer : For the purposes of the OSH Code, a “principal employer” is (i) any person responsible for the supervision and control of the establishment where contract labour is employed or engaged; or (ii) the owner or the occupier of the factory and where a person has been named as the manager of the factory, the person so named. Wages : “Wages“, as per the OSH Code, comprises all remuneration such as salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would be payable to a person in respect of his employment, whether express or implied, or of work done in such employment and includes basic pay, dearness allowance and retaining allowance, if any. The OSH Code clarifies that wages do not include (a) bonus; (b) value of accommodation or light, water, medical attendance; (c) employer contribution towards any pension or provident fund; (d) conveyance allowance; (e) sum paid to employed person to defray special expenses; (f) house rent allowance; (g) overtime allowance and (h) gratuity, etc. Rights of interstate workers In addition to the general labour laws applicable to all workers, the interstate workers are entitled with

• Equal or better wages for the similar nature & duration of work applicable for the local workmen or stipulated minimum wages under the Minimum Wages Act, 1948 whichever is more,
• Displacement allowance (Section 14),
• Home journey allowance (Section 15) including payment of wages during the period of journey,
• Suitable residential accommodation and medical facilities free of charge on mandatory basis.
• Termination of employment after the contract period without any liability.
• Right to lodge compliant with the authorities within three months of any incident, accident, etc. Role of contractors Registration of all contractors who employs or employed five or more Interstate Migrant Workmen on any day of the preceding 12 months.
• Furnish the details of workmen periodically in such forms as prescribed by state government.
• Maintain the registers indicating the details of interstate workers and make available for scrutiny by the statutory authorities.
• Issue of passbook affixed with a passport-sized photograph of the workman indicating the name and the place of the establishment where the worker is employed, the period of employment, rates of wages, etc. to every inter-state migrant workman.
• Reporting by the contractor the incidence of fatal accident or serious injury of such workman to the specified authorities of both the States and also the next of kin of the workman.
• Liable for the prescribed punishments for violations committed under this Act. Role of principal employers
• Registration of all principal employers who employs or employed directly or indirectly five or more Interstate Migrant Workmen on any day of the preceding 12 months.
• Maintain the registers indicating the details of interstate workers and make available for scrutiny by the statutory authorities.

Furthermore, the OSH Code prescribes a more stringent set of duties for employers with respect to factories, mines, dock work, building and other construction work or plantations, including (i) arrangements in the workplace for ensuring safety and absence of risk to health in connection with the use, storage and transport of articles and substances; (ii) provision of such information, instruction, training and supervision as are necessary to ensure the health and safety of all employees at work, etc. The OSH Code has further clarified that it shall be the duty of the architect, project engineer or designer responsible for any building or construction work or the design of any project relating to such building, to ensure that, at the planning stage, due consideration is given to the safety and health aspects of the building workers and employees who are employed in the erection, operation and execution of such projects. Rights of Employee under OSH Code Every employee has the following rights under the OSH Code:

• To obtain from the employer, information relating to employee's health and safety at work and represent to the employer regarding inadequate provision for protection of the employees safety or health in connection with the work activity in the workplace, and if not satisfied, to the inspector-cum-facilitator;
• If he has reasonable apprehension that there is a likelihood of imminent serious personal injury or death or imminent danger to health, he may bring the same to the notice of his employer directly and simultaneously bring the same to the notice of the inspector- cumfacilitator;
• The employer is required to take immediate remedial action if he is satisfied about the existence of such imminent danger and send a report forthwith of the action taken to the inspector-cum-facilitator in such manner as may be prescribed by the Government; and
• If the employer is not satisfied about the existence of any imminent danger as apprehended by his/he employees, he shall, nevertheless, refer the matter forthwith to the inspector-cum-facilitator whose decision on the question of the existence of such imminent danger shall be final.

Registration under OSHWC and Social Security Codes The Occupational Safety, Health and Working Conditions Code, 2020 provides for registration under Section-3 and states that every employer of any establishment:- a) Which comes into existence after the commencement of the Code; b) To which the Code shall apply Must apply to the registering officer within sixty days from the date of when the Code becomes applicable. The registering officer is given the discretion to entertain applications after the expiry of the above period provided the late fees is paid as prescribed. Applicability of OSH Code The OSH Code shall be applicable on every establishment employing fifty (50) or more than fifty (50) contract labour through a contractor in any establishment. The CLRA, subject to state specific amendments, applies to establishments employing twenty (20) or more contract labour through contractors. States like Maharashtra, Telangana etc. have increased this threshold of twenty (20) contract labour to fifty (50) contract labour. The OSH Code focuses on bringing uniformity with respect to application of the chapter related to contract labour in all the states across the country. One Registration for One Establishment The OSH Code provides for a single registration of every establishment employing ten (10) or more workers and every establishment to whom the OSH Code applies shall apply for such registration within sixty (60) days from the date of applicability of OSH Code. This one registration concept will now allow every principal employer who has obtained registration under the OSH Code to engage contract labour in his establishment without taking any separate registration for the same. License of Contractors As per the OSH Code, every contractor, who is employing fifty (50) or more contract labour and placing them to work for some other establishment will need to obtain a single license. The license will be valid for a period of five (5) years. Under the CLRA the contractors are bound to obtain multiple licenses with respect to each establishment where the contract labour is being