Labour reforms:

Approach: simplification, amalgamation and rationalization of existing central labour laws.

Core objectives:
 facilitating ease of doing business
 generating employment
 safeguarding interests of workers and employers
 attract investment for spurring growth.

The proposed codification will:

 make the existing labour laws in sync with the emerging economic scenario,
 reduce the complexity by providing uniform definitions,
 reduction in multiple authorities under various Acts,
 bring transparency and accountability in enforcement of labour laws.

This in turn would lead to:

 ease of compliance,
 catalyzing the setting-up of manufacturing units including boosting labour intensive
industries such as agriculture and manufacturing exports and enhancement in
employment opportunities as well as
 its formalization along with ensuring safety, social security and welfare of workers.

Salient features of: Code on Wages

 This code is first step in direction of consolidation, rationalization and simplification of
labour related regulations.
 It has replaced four labour regulations viz. the Payment of Wages Act, 1936; the
Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration
Act, 1976.
 Code has expanded the definition of “employer” as well as “employee”, resulting in a
broad-based applicability of the regulations and is now applicable to employees in both
organized and unorganized sectors. Under the Code, the minimum wages and the payment
of wages provisions cover all establishments, employees and employers as defined unless
specifically exempt (Armed Forces & Apprentices are excluded)
 The definition of “wages” has been unified. The definition of wages now has three parts:
 The definition includes basic pay, dearness allowance and retaining allowance.
 It specifically excludes components such as statutory bonus, value of house
accommodation and utilities (light, water, medical etc.), employer contribution to
provident fund/ pension, conveyance allowance/ travelling concession, sum paid to
defray special work expenses, house rent allowance, remuneration payable under
settlement, overtime allowance, commission, gratuity, retrenchment compensation.

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  The specified exclusions, however may not exceed 50 percent of all remuneration, and
in the event of exceeding, such excess amount shall be deemed as remuneration and
will be considered as "wages". This is aimed at ensuring that companies do not adopt
compensation structures which result in wages being reduced below 50 percent of the
total remuneration.
 Minimum wages: The central government will set the national floor rate for wages after
taking into account the minimum living standards of workers varying across geographical
areas; where existing minimum wages are higher than the floor wages, the same shall be
retained. State governments will fix the minimum wages for their region which cannot be
lower than the national floor rate for wages. The code also provides that there would be a
review/ revision of minimum wages at intervals not exceeding five years. Further, the rate
of wages for overtime work shall not be less than twice the rate for normal wages.
 Equal remuneration: Provisions relating to equal remuneration now prescribe that no
discrimination is permitted on the basis of the gender of said employees. This is slightly
wider than the earlier provision which specified no discrimination on the basis of “Men” and
“Women”.
 Payment of wages: Settlement period for monthly wages has been specified as on the 7th
of the succeeding month, as against 10th of the succeeding month. In case the employee is
removed, dismissed, retrenched, resigns or becomes unemployed due to closure of an
establishment, the wages are required to be paid within two working days. The earlier Act
did not provide for any specific timelines for resignation cases. The limitation period for
filing the claims for minimum wages, bonus, equal remuneration etc., by workers has been
raised to 3 years as against the varying period between 6 months to 2 years.
 Payment of Bonus: Similar to the provisions of the Payment of Bonus Act, 1965, the
chapter relating to bonus payments under the code shall apply to only those establishments
employing at least 20 employees on any day in that accounting year. All employees whose
wages do not exceed a specific monthly amount (to be notified by the central or state
government) will be entitled to an annual bonus. Bonus is payable on higher of minimum
wage or the wage ceiling fixed by the appropriate government for payment of bonus.
Minimum bonus prescribed under the Code is 8.33 percent and the maximum bonus payable
is 20 percent.
 Inspectors-cum-Facilitators The code provides the appropriate government to appoint
Inspectors-cum-Facilitators (in the place of Inspectors), to carry out inspections. Such
Inspectors-cum-Facilitators may advise employers and employees for better compliance.
This has been done with the objective of removing the arbitrariness and malpractices in
inspection.
 The quantum of penalties specified under the code is also significantly high which varies
depending on the nature of the offence. The maximum penalty being imprisonment for three
months and/ or with a fine of up to INR 100,000.
Conclusion: The employers should analyze the requirement of revision of the salary
structure and organization policy with regard to labour contracts and employment terms
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of services to ensure that their policies are HR friendly and legally compliant. The aggregation
of various codes under one umbrella is a welcome measure.

Salient features of:

The Industrial Relations Code, 2020
 The Industrial Relations Code, 2020 was introduced in Lok Sabha on September 19,
2020. It seeks to replace three labour laws: (i) the Industrial Disputes Act, 1947, (ii)
the Trade Unions Act, 1926, and (iii) the Industrial Employment (Standing Orders)
Act, 1946.

 Trade unions: Under the Code, seven or more members of a trade union can apply to
register it. Trade unions that have a membership of at least 10% of the workers or
100 workers, whichever is less, will be registered. The central or state government
may recognize a trade union or a federation of trade unions as Central or State Trade
Unions, respectively.

 Negotiating unions: The Code provides for a negotiation union in an industrial

establishment, having registered trade unions, for negotiating with the employer. If
there is only one trade union in an industrial establishment, the employer is required
to recognise such trade union as the sole negotiating union of the workers. In case of
multiple trade unions, the trade union with support of at least 51% of workers on the
muster roll of that establishment will be recognised as the sole negotiating union by
the employer.

 Unfair labour practices: The Code prohibits employers, workers, and trade unions
from committing any unfair labour practices listed in a Schedule to the Code. These
include: (i) restricting workers from forming trade unions, (ii) establishing employer
sponsored trade union of workers, (iii) coercing workers to join trade unions, (iv)
damage to employer’s property, and (v) preventing any worker from attending
work. Any person who commits unfair labour practices is punishable with a fine
between ten thousand rupees and two lakh rupees.

 Standing orders: All industrial establishments with at least 300 workers must
prepare standing orders on certain matters. These include: (i) classification of
workers, (ii) manner of informing workers about hours of work, holidays, paydays,
and wage rates, (iii) termination of employment, (iv) suspension for misconduct, and
(v) grievance redressal mechanisms for workers. The central government will
prepare model standing orders, based on which the industrial establishments will
prepare their standing orders.

 Notice of change: Employers must not change the conditions of service in certain
matters without giving notice of the proposed changes to the workers being affected,
or within 21 days of giving such notice. These matters include wages, contribution,
allowances, working hours, and leave.

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 Lay-off and retrenchment: Employers of non-seasonal industrial establishments
such as mines, factories, and plantations with 50 to 300 workers must (i) pay 50% of
basic wages and dearness allowance to a worker who has been laid off, and (ii) give one
month’s notice or wages for the notice period to the retrenched worker. Lay-off is the
inability of an employer from giving employment to a worker due to reasons such as
shortage of coal, power, or breakdown of machinery. Retrenchment means
termination of services of a worker for reasons other than disciplinary action. Any
person who contravenes these provisions is punishable with a fine between fifty
thousand rupees and two lakh rupees.

 Non-seasonal industrial establishments with at least 300 workers must take prior
permission of the central or state government before lay-off, retrenchment or
closure. The central or state government may increase this threshold by
notification. Such establishments must pay 50% of basic wages and dearness allowance
to a worker who has been laid off. In case of retrenchment, the employer must either
give three months’ notice or pay the retrenched worker for the notice period. Any
employer who violates these provisions will be punishable with a fine between one lakh
rupees and ten lakh rupees.

 Within one year of retrenchment of workers, if an employer seeks to re-employ a

person, he must prefer retrenched workers over other persons.

 Voluntary arbitration: The Code allows for industrial disputes to be voluntarily

referred to arbitration by the employer and workers through a written
agreement. After investigating the dispute, the arbitrator will submit the arbitration
award to the government. Industrial disputes include disputes related to terms of
employment, non-employment and dismissal, retrenchment, or termination of workers.

 Resolution of industrial disputes: The central or state governments may appoint

conciliation officers to mediate and promote settlement of industrial disputes. These
officers will investigate the dispute and hold conciliation proceedings to arrive at a fair
and amicable settlement of the dispute. If no settlement is arrived at, either party to
the dispute can make an application to the Industrial Tribunal, constituted under the
Code. The central government may also constitute National Industrial Tribunals for
settlement of industrial disputes which: (i) involve questions of national importance,
or (ii) could impact industrial establishments situated in more than one state. The
tribunals will have two members each, one judicial member and one administrative
member with the specified qualifications.

 Exemptions from the Code: The 2020 Bill provides that the central or state
government may exempt any new establishment or a class of new establishment from
all or any provisions of the Code in public interest.

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 Salient features of:
The Occupational Safety, Health and Working
Conditions Code, 2020
 The Code consolidates 13 existing Acts regulating health, safety, and working
conditions. These include the Factories Act, 1948, the Mines Act, 1952, and the
Contract Labour (Regulation and Abolition) Act, 1970.

 Coverage: The Code will apply to establishments employing at least 10 workers. It will
apply to all mines, docks, and establishments carrying out any hazardous or life-
threatening activity (may be notified by the central government). Certain provisions of
the Code, such as health and working conditions, apply to all employees. Employees
include workers and all other persons earning wages for any work, including managerial,
administrative, or supervisory work.

 Exemptions: The appropriate government can exempt any workplace or activity from
the Code in case of a public emergency, disaster, or pandemic for up to a year. Further,
the state government can exempt new factories from the Code for the specified period for
creating more economic activity and employment.

 Duties of employers: Duties of employers include:

(i) providing a workplace that is free from hazards,
(ii) providing free annual health examinations in notified establishments, and
(iii) informing relevant authorities in case any accident at the workplace leads to death
or serious bodily injury to any employee.
(iv) Additional duties are prescribed for employers in factories, mines, docks,
plantations, and building and construction work, including provision of a risk-free
work environment, and instructing employees on safety protocols.

 Rights and duties of employees: Duties include taking care of their own health and
safety, complying with safety and health standards, and reporting unsafe work incidents to
the Inspector. Employees also have certain rights including the right to obtain
information on safety and health standards from the employer.

 Work hours: No worker will be required or allowed to work in any establishment for
more than eight hours in a day. For overtime work, workers must be paid at twice the rate
of daily wages. Prior consent of workers is required for overtime work. Women can
work past 7 pm and before 6 am, subject to any safety-related or other conditions
prescribed by the government.

 Leave: Workers cannot be required to work for more than six days a week. Further, they
must receive one day of leave for every 20 days of work per year.

 Working conditions: Working conditions will be notified by the central

government. Conditions may include hygienic work environment, clean drinking water,

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 toilets, ventilation, and adequate lighting.

 Welfare facilities: Welfare facilities such as canteens, first aid boxes, and crèches, may
be provided as per standards notified by the central government. Additional facilities
may be specified for factories, mines, docks, and building and construction works, such
as welfare officers and temporary housing.

 The Code includes three schedules containing lists of:

(i) 29 diseases that the employer is required to notify the authorities of, in case a
worker contracts them,
(ii) 73 safety matters that the government may regulate, and
(iii) 40 industries involving hazardous processes.
The lists may be amended by the central government.

 Inspectors: The government can appoint inspector-cum-facilitators to conduct

inspections and inquire into accidents. They have certain additional powers in case of
factories, mines, docks, and building and construction works, including: (i) reducing the
number of employees working in sections of the establishment, and (ii) prohibiting work
in dangerous situations.

 Advisory boards: The central and state governments will set up Occupational Safety
and Health Advisory Boards at the national and state level. These Boards will advise
the respective government on the standards, rules, and regulations to be framed under the
Code.

 Safety committees: The government may require certain establishments to constitute

safety committees in case of a certain class of workers. The committees will be
composed of representatives of the employer and workers and will function as a liaison
between them. The number of representatives of workers in the committee must not be
less than that of the employer.

Salient features of:

The Code on Social Security, 2020
 It replaces nine laws related to social security, including the Employees’ Provident Fund
Act, 1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security
Act, 2008. Social security refers to measures to ensure access to health care and
provision of income security to workers.

 Social security schemes: Under the Code, the central government may notify various
social security schemes for the benefit of workers. These include an Employees’ Provident
Fund (EPF) Scheme, an Employees’ Pension Scheme (EPS), and an Employees’ Deposit
Linked Insurance (EDLI) Scheme. These may provide for a provident fund, a pension
fund, and an insurance scheme, respectively. The government may also notify: (i) an
Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other
benefits, (ii) gratuity to workers on completing five years of employment (or less than five
years in certain cases such as for journalists and fixed term workers), (iii) maternity

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 benefits to women employees, (iv) cess for welfare of building and construction workers,
and (v) compensation to employees and their dependants in the case of occupational injury
or disease.

 In addition, the central or state government may notify specific schemes for gig
workers, platform workers, and unorganised workers to provide various benefits, such
as life and disability cover. Gig workers refer to workers outside of the traditional
employer-employee relationship (e.g., freelancers). Platform workers are workers who
access other organisations or individuals using online platforms and earn money by
providing them with specific services. Unorganised workers include home-based and self-
employed workers. It also provides for social security funds for unorganised workers, and
gig and platform workers.

 Coverage and registration: The Code specifies different applicability thresholds for the
schemes. For example, the EPF Scheme will apply to establishments with 20 or more
employees. The ESI Scheme will apply to certain establishments with 10 or more
employees, and to all establishments which carry out hazardous or life-threatening work
notified by the central government. These thresholds may be amended by the central
government. All eligible establishments are required to register under the Code, unless
they are already registered under any other labour law.

 Contributions: The EPF, EPS, EDLI, and ESI Schemes will be financed through a
combination of contributions from the employer and employee. For example, in the case of
the EPF Scheme, the employer and employee will each make matching contributions of
10% of wages, or such other rate as notified by the government. All contributions towards
payment of gratuity, maternity benefit, cess for building workers, and employee
compensation will be borne by the employer. Schemes for gig workers, platform workers,
and unorganised workers may be financed through a combination of contributions from the
employer, employee (or aggregators for gig workers and platform workers), and the
appropriate government.

 For the purpose of schemes for gig and platform workers, the Bill specifies a list of
aggregators including ride sharing services and food delivery services. Any contribution
from an aggregator may be at a rate notified by the government falling between 1-2% of
the annual turnover of the aggregator, subject to a cap of 5% of the amount paid or payable
by an aggregator to the gig and platform workers.

 Social security organisations: The Code provides for the establishment of several bodies
to administer the social security schemes. These include: (i) a Central Board of Trustees,
(ii) an Employees State Insurance Corporation, (iii) National and State Social Security
Boards to administer schemes for unorganised, and (iv) state-level Building Workers’
Welfare Boards to administer schemes for building workers.

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 Critical appraisal of the labour codes
View of the trade unions:

1. National Convention Of Workers “ While all indicators pointed to economy

drastically slowing down due to lack of demand, the government continued to steer
its policies in the name of “ease of doing business”, aggravating widespread
impoverishment and deepening the crisis further”. The convention called upon the
working class to organise joint state/ district/ industry/sectoral level conventions,
physically wherever possible, online otherwise, before the end of October 2020; to
conduct an extensive campaign on the adverse impact of the labour codes on the
workers down to the grassroots level up to mid-November and for the one-day
countrywide general strike on November 26, 2020. The unions which were part of
this convention are INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, SEWA,
AICCTU, LPF, UTUC and independent federations and associations.
2. Unions have raised concerns that the Code will promote hire and
fire and adversely impact the right to strike. The Bhartiya Mazdoor
Sangh has said industrial peace will be affected.
3. AITUC had opposed the other proposal under the code for coverage of unorganized
workers with and without identifiable employer, a separate social security organisation
be set up for providing social security to them and a token contribution be charged from
them while the major part of the contribution should be made by the government.
4. Unions were also against the proposal of forming a National Social Security Council
with the prime minister as chairman, which shall control and regulate all the social
security schemes to be implemented in the country. The code also proposes to hand over
operation of social security schemes to state governments.

What is positive in new labour codes: Govt view:

1. As per government final draft of the Codes has been framed after wide-ranging
consultations with all stakeholders. The labour reforms exercise which culminated
recently was initiated on the basis of the recommendations of the Second National
Commission on Labour, 2002, which had recommended to subsume then existing
Central labour legislations into four or five Codes.
2. Labour Ministry seeks to always ensure tripartite consultations in its decision-making. In
this context an extensive consultation process was adopted wherein all stakeholders
including trade unions, employer associations, state governments, international
organisations and citizens were consulted.

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3. Many suggestions of trade unions including recognition of trade unions at unit, State
and Central level and providing mechanism for inter-trade union dispute resolution
through industrial tribunals were accepted.
4. Opposition did not participate in the discussion on these important Bills brought in the
interest of workers having positive impact on the lives of millions of our workers. The
existing labour laws fell short in responding to the changed world of work and a need
for a comprehensive labour law reform exercise was felt from long.
5. How will the four labour codes change the lives of workers? And when will
they be implemented?: These labour Codes will bring qualitative change in the lives
of our workers and they seek to achieve the twin objective of:
1. securing the basic rights of the workers and
2. facilitating employment generation.
These labour Codes seek to 1. universalise the right to minimum wage of workers,
presently available to only about 30% of the workforce engaged in the scheduled
employments. Apart from this, the 2. right to timely payment of wages without any
unauthorised deduction has been universalised for all employees. The OSH Code
seeks to establish 3. a dynamic occupational safety regulatory framework in
consonance with the changing technology and working conditions. The IR Code 4.
strengthens the dispute resolution machinery in the industrial establishments
besides enabling effective participation of Trade Unions. The Code on Social
Security takes a significant step towards ensuring a 5. universal coverage of all
organised and particularly unorganised workers in the social security net.

6. Unions have raised concerns that the Code will promote hire and fire and
adversely impact the right to strike. The Bhartiya Mazdoor Sangh has said
industrial peace will be affected. How do you address this? And is there any
plan to reach out to unions on this?
Govt Stand: While framing the Codes we had the objective to enhance the workers’
welfare along with facilitating job creation. The Codes have introduced the concept of
fixed term employment taking into consideration the reality of increasing contract
workers who are often exploited by the contractor and discriminated in
comparison to a regular employee. Thus an option to engage workers on fixed term
has been introduced duly ensuring that fixed term employee is treated at par with
regular employee of establishment in all aspects including pro rata payment of gratuity.
Further, another misconception is about increase of threshold from 100 to 300 for
seeking permission before retrenchment/lay-off or closure. In this regard, I wish to
inform through you that this threshold has been already been done by 16 State

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 governments and retaining the threshold of 100 would not have served much
purpose. The increase of threshold from 100 to 300 was recommended by the
Parliamentary Standing Committee on Labour. Low threshold for seeking permission
before retrenchment, layoff or closure does not serve much purpose but on the contrary
promotes dwarfism of establishments. This is also evident from the few industrial
establishments in the country having more than 100 workers. Thus when holistically
understood, the increase of threshold to 300 will lead to formalization of workforce,
encourage labour intensive production and encourage establishment of bigger
enterprises.
Further, in addition to the benefits envisaged for retrenched workers, the IR Code, 2020
has constituted a Reskilling fund in order to enable re-skilling of retrenched
workers and facilitate them in finding new employment.
The requirement for a 14 days’ notice prior to proceeding on strike in any
establishment by a Trade Union is contemplated to enhance the industrial peace and
harmony without compromising on the workers right to strike. The objective for
this is to prevent uncontemplated breakdown of production in an establishment and
to create an opportunity for amicable settlement of the disputes between workers and
management through conciliation.
Lastly, for the first-time provisions for strengthening and
ensuring effective collective bargaining has been incorporated in law through the
provision for a Negotiating Union or Negotiating Council at unit level and the recognition
of unions at the State and Central level.

7. “The rights of the workers and unions have been protected”

“It is only the aspect of prior permission of the appropriate government which has been
removed and other benefits and workers’ rights have been kept intact. The workers’
rights, such as notice before retrenchment, compensation at the rate of 15 days wages
per completed year of service, and pay in lieu of notice period, have not been
compromised,” the GOI stated.
The IR Code also introduced a new Reskilling Fund to be created to give monetary
benefit equal to 15 days of wages, it said. “There has been no empirical evidence to
suggest that higher threshold promotes hire and fire,” the Ministry said.
It said the Economic Survey 2019 had pointed out the problem of “dwarfism” in Indian
firms, as the companies were not increasing the number of employees beyond 100, the
threshold under the Industrial Disputes Act, 1947. Rajasthan had increased the threshold
to 300 workers in 2014 and the “average number of factories in Rajasthan having more

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 than 100 increased significantly as compared to the rest of India.” Fifteen other States
had followed suit, it added.
The Ministry said fixed-term employment had already been notified by the Central
government and 14 States. It was “pro-worker” and such employees would be eligible
for all benefits and service conditions that a regular employee enjoyed, it said.
“Non-availability of fixed-term employment implied that an employer had options to
either employ on regular basis or through contractual basis. The employment of workers
through contractual basis means higher transaction cost to employer, lack of
permanence of contract labour, untrained, unskilled contract labour,” it said.

The Ministry said the provisions of the Inter-State Migrant Worker Act, 1979 had been
subsumed in the OSH Code and its provisions had been strengthened. “The OSH Code
expands the definition of migrant worker to include those workers who would be
directly employed by the employer besides by contractor.” It said a national database of
unorganised workers would be set up.

The Ministry said new welfare measures had been introduced through the OSH Code,
including mandatory appointment letters, extension of Employees’ State Insurance
cover to plantation workers and free annual health checks.

Responding to criticism that the IR Code had reduced the influence of trade unions and
affected the right to strike by imposing a 14-day notice period, the Ministry said the
“position of trade unions has been strengthened by introducing decentralised registration
process” and the notice “only adds an opportunity for resolving the labour grievance
before going on strike, mandating establishments to attempt solving the issues”.

Specialized topics in Code on Industrial Relations

UNFAIR LABOUR PRACTICES: No employer or worker or a Trade Union, whether

registered under this Code, or not, shall commit any unfair labour practice specified in the Second Schedule.

THE SECOND SCHEDULE: UNFAIR LABOUR PRACTICES

I. On the part of employers and trade unions of employers
(1) To interfere with, restrain from, or coerce, workers in the exercise of their right to
organize, form, join or assist a Trade Union or to engage in concerted activities
for the purposes of collective bargaining or other mutual aid or protection, that
is to say,—
(a) threatening workers with discharge or dismissal, if they join a Trade Union;
(b) threatening a lock-out or closure, if a Trade Union is organised;
(c) granting wage increase to workers at crucial periods of Trade Union organisation, with
a view to undermining the efforts of the Trade Union organisation.
(2) To dominate, interfere with or contribute support, financial or otherwise, to any
Trade Union, that is to say,—

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 (a) an employer taking an active interest in organising a Trade Union of his workers;
and
(b) an employer showing partiality or granting favour to one of several Trade Unions
attempting to organise his workers or to its members, where such a Trade Union is not
a recognised Trade Union.
(3) To establish employer sponsored Trade Unions of workers.
(4) To encourage or discourage membership in any Trade Union by discriminating against
any worker, that is to say,—
(a) discharging or punishing a worker, because he urged other workers to join or
organise a Trade Union;
(b) discharging or dismissing a worker for taking part in any strike (not being a strike
which is deemed to be an illegal strike under this Code);
(c) changing seniority rating of workers because of Trade Union activities;
(d) refusing to promote workers to higher posts on account of their Trade Union
activities;
(e) giving unmerited promotions to certain workers with a view to creating discord
amongst other workers, or to undermine the strength of their Trade Union;
(f) discharging office-bearers or active members of the Trade Union on account of
their Trade Union activities.
(5) To discharge or dismiss workers,—
(a) by way of victimisation;
(b) not in good faith, but in the colourable exercise of the employer's rights;
(c) by falsely implicating a worker in a criminal case on false evidence or on concocted
evidence;
(d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic
enquiry or with undue haste etc.
(6) To abolish the work of a regular nature being done by workers, and to give such work
to contractors as a measure of breaking a strike.
(7) To transfer a worker mala fide from one place to another, under the guise of following
management policy.
(8) To insist upon individual workers, who are on a legal strike to sign a good conduct bond,
as a precondition to allowing them to resume work.
(9) To show favouritism or partiality to one set of workers regardless of merit.
(10) To employ workers as badli workers, casuals or temporaries and to continue them as
such for years, with the object of depriving them of the status and privileges of
permanent workers.
(11) To discharge or discriminate against any worker for filing charges or testifying
against an employer in any enquiry or proceeding relating to any industrial dispute.
(12) To recruit worker during a strike which is not an illegal strike.
(13) Failure to implement award, settlement or agreement.
(14) To indulge in acts of force or violence.
(15) To refuse to bargain collectively, in good faith with the recognised Trade Unions.
(16) Proposing or continuing a lock-out deemed to be illegal under this Code.

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II. ON THE PART OF WORKERS AND TRADE UNIONS OF WORKERS
(1) To advise or actively support or instigate any strike deemed to be illegal under this Code.
(2) To coerce workers in the exercise of their right to self-organisation or to join a Trade
Union or refrain from, joining any Trade Union, that is to say—
(a) for a Trade Union or its members to picketing in such a manner that non-striking
workers are physically debarred from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in
connection with a strike against non-striking workers or against managerial staff.
(3) For a recognised union to refuse to bargain collectively in good faith with the employer.
(4) To indulge in coercive activities against certification of a bargaining representative.
(5) To stage, encourage or instigate such forms of coercive actions as wilful, "go-slow",
squatting on the work premises after working hours or "gherao" of any of the members
of the managerial or other staff.
Explanation 1.—For the removal of doubts, it is clarified that "go-slow" shall mean
an occasion when more than one worker in an establishment conjointly work more
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.
Explanation 2.—For the purposes of Explanation 1, the expression "usual" shall mean,—
(i) where the standard has been specified for a worker for his work either daily, weekly or monthly basis, such work; and
(ii) where no such standard has been specified such rate of work which is the average of work in the previous three months calculated on daily or weekly or monthly basis, as
the case may be.

(6) To stage demonstrations at the residence of the employers or the managerial staff
members.
(7) To incite or indulge in wilful damage to employer's property connected with the industry.
(8) To indulge in acts of force or violence or to hold out threats of intimidation against any
worker with a view to prevent him from attending work.

Standing Orders
Matters to be provided in standing orders under this code
1. Classification of workers, whether permanent, temporary, apprentices, probationers,
badlis or fixed term employment.
2. Manner of intimating to workers periods and hours of work, holidays, pay-days and
wage rates.
3. Shift working.
4. Attendance and late coming.
5. Conditions of, procedure in applying for, and the authority which may grant leave and
holidays.
6. Requirement to enter premises by certain gates, and liability to search.
7. Closing and reporting of sections of the industrial establishment, temporary stoppages
of work and the rights and liabilities of the employer and workers arising therefrom.
8. Termination of employment, and the notice thereof to be given by employer and
workers.
9. Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct.
10. Means of redress for workers against unfair treatment or wrongful exactions by the
employer or his agents or servants.
11. Any other matter which may be specified by the appropriate Government by
notification.

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 Provision of fixed term employment
The Code introduces provisions on fixed term employment. Fixed term employment refers
to workers employed for a fixed duration based on a contract signed between the worker
and the employer. Provisions for fixed term employment were introduced for central sphere establishments in
2018.[5] We discuss below the pros and cons of introducing fixed term employment.

Positives
 Fixed term employment may allow employers the flexibility to hire workers for a fixed
duration and for work that may not be permanent in nature.
 Further, fixed term contracts are negotiated directly between the employer and employee
and reduce the role of a middleman such as an agency or contractor.
 They may also benefit the worker since the Code entitles fixed term employees to the
same benefits (such as medical insurance and pension) and conditions of work as are
available to permanent employees. This could help improve the conditions of temporary
workers in comparison with contract workers who may not be provided with such
benefits.

Negatives:
 Unequal bargaining powers between the worker and employer could affect the rights of
such workers since the power to renew such contracts lies with the employer. This may
result in job insecurity for the employee and may deter him from raising issues about
unfair work practices, such as extended work hours, or denial of wages or leaves.
 Further, the Code does not restrict the type of work in which fixed term workers may be
hired. Therefore, they may be hired for roles offered to permanent workmen. In
contrast, under the Contract Labour (Regulation and Abolition) Act, 1970 the government
may prohibit employment of contract labour in some cases including where: (i) the work
is of a perennial nature, (ii) the same work is carried out by regular workmen in the
establishment. Note that the 2nd National Labour Commission (2002) had recommended
that no worker should be kept continuously as a casual or temporary worker against a
permanent job for more than two years.
The ILO (2016) noted that several countries restrict use of fixed term contracts by: (i)
limiting renewal of employment contracts (e.g., Vietnam, Brazil and China allow two
successive fixed term contracts), (ii) limiting the duration of contract (e.g., Philippines and
Botswana limit it up to a year), or (iii) limiting the proportion of fixed term workers in the
overall workforce (e.g., Italy limits fixed term and agency workers to 20%).

Comparison between
Feature Fixed Term Permanent Contract Labour
Employee Employee
Type of  Employment under written  Employment directly under  Engaged in an establishment
employment contract. a written contract. through a contractor or agency.
 No contractor or agency is  On the payroll of the  Not on the payroll of the
involved. establishment. establishment.
 On the payroll of the
establishment.

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 Term  Stipulated fixed term.  Employed on a permanent  Based on terms negotiated with
 Employment lapses on basis the contractor.
completion of term, unless  Notice has to be given for
renewed. No notice is termination of
required to be given for employment.
retrenchment.

Nature of  Not specified.  Hired for routine work.  Employment may be prohibited
work in certain cases, e.g., if similar
work is carried out by regular
workmen.

“gig economy”
The phrase “gig economy” was coined at the height of the financial crisis in early 2009, when
the unemployed made a living by gigging, or working several part-time jobs, wherever they
could.
A gig economy is a free market system in which temporary positions are common and
organizations contract with independent workers for short-term engagements.
In a gig economy, temporary, flexible jobs are commonplace and companies tend toward
hiring independent contractors and freelancers instead of full-time employees. A gig economy
undermines the traditional economy of full-time workers who rarely change positions and
instead focus on a lifetime career.

Due to the large numbers of people willing to work part-time or temporary positions, the result
of a gig economy is cheaper, more efficient services, such as Uber or Airbnb, for those
willing to use them. Those who don't engage in using technological services such as the
Internet tend to be left behind by the benefits of the gig economy. Cities tend to have the most
highly developed services and are the most entrenched in the gig economy. While not all
employers tend toward hiring contracted employees, the gig economy trend often makes it
harder for full-time employees to develop fully in their careers since temporary employees
are often cheaper to hire and more flexible in their availability.

There is a wide range of positions that fall into the category of a "gig." For example, adjunct
and part-time professors are contracted employees as opposed to tenured or tenure-track
professors. Colleges and universities can cut costs and match professors to their academic
needs by hiring more adjunct and part-time professors.

What Factors Contribute to a Gig Economy?

America is well on its way to establishing a gig economy, and estimates show as much as a
third of the working population is already in some gig capacity. Experts expect this working
number to rise. In the modern digital world, it's becoming increasingly common for people to
work remotely or from home. This facilitates independent contracting work as many of those
jobs don't require the freelancer to come in to the office to work. Employers also have a wider
range of applicants to choose from as they don't have to hire someone based on their proximity.
Additionally, computers have developed to the point that they can take the place of the jobs
people previously held.

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Economic reasons also factor in to the development of a gig economy. Most times, employers
cannot afford to hire full-time employees to do all the work they need done, so they hire part-
time or temporary employees to take care of busier times or specific projects. On the side of
the employee, people often find they need to move around or take multiple positions to afford
the lifestyle they want. People also tend to change careers many times throughout their lives,
so the gig economy is the reflection of this occurring on a large scale.

The concept of work is changing. Among the key reasons that are impacting the nature of
work, the gig economy has emerged as one of the most important and rising trends.

Also called the "flex economy" or "mobile economy," it reflects the cultural change
brought by a new generation of workers, especially millennials. Though there is no
accurate estimate of their numbers, it is projected that gig workers will comprise half the
workforce by 2020, and as much as 80 percent by 2030.

Gig economy is a temporary work system based on a short-term relationship between

workers and companies. Workers perform “gigs,” in which they are employed for a
specific task or time. This is done to achieve advantage of cost, quality, and flexibility.
Once the task is complete, the worker is free to move on. A McKinsey report
says, 20-30 percent of the developed countries’ workforce is today engaged in
independent work.

Factors aiding the rise of the gig economy:

Several factors contributed to the rise of the gig economy.

Firstly, most businesses started factoring cost into their competitive strategy after the
Great Recession in 2007. As a result, companies combined different approaches—
reducing the number of employees, improving operational efficiency, or both. They
started to rationalise, among other things, antiquated workforce model and full-time
employment. Progressively jobs that could be manned remotely were cut down and
contracting on-demand workers gained ground.

Secondly, seasonal spikes in customer service across most businesses helped

in the rise of the gig economy. A flexible workforce allows organisations to be more agile
and plan for spikes and lows. It aided them to elevate business performance faster and
effectively. In fact, 70 percent of employers say gig workers increase profitability and
efficiency. All this led to the trend of hiring independent short-term workers, at short
notice, for a short time instead of full-time employees.

Thirdly, technology played an important role in consolidating remote and mobile

workforce, enabling rapid growth of the gig economy. Platforms enabling centralised
communication, real-time scheduling and tracking, dashboard, video conferencing, etc.
created a marketplace for gig like ecommerce did for goods.

The benefits are mutual, but so are the pitfalls:

The gig economy has benefited both companies and workers. With geography no more a
barrier, companies can hire workers without fear of attrition. The gig system results in
lower training overheads and savings in office costs. Globally, 43 percent of companies
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with gig workers save 20 percent in labour costs, per an industry survey. Author and
Professor Diane Mulcahy says in her book The Gig Economy that hiring a full-time
worker with benefits and protections can cost a company 30–40 percent more than gig
workers.

For workers, the flexibility of the system works best. With 33 percent saying work-life
balance is getting difficult, the gig system gives them personal time. It allows them to
network and work better. They can quote their price on projects of their choice, and at a
time and place of their choice.

But the system has its flip side. As companies forgo their traditional style, their
strategic vision may become obscure. Companies struggle to retain their corporate
culture, and staff lack in team spirit when workers are temporary. Shorn of in-house
talent, they are always on the lookout for gig workers for new projects. Regular
coordination among different workers or teams working in silos isn’t easy. The gig system
also calls for regular implementation of new technology platforms to manage churn
faster. This can be time consuming and costly.

On the work front, workers should find their own gigs, which isn’t easy unless you have
an established relationship with a client. Geographic flexibility means you have
competition from across the world, and competitors can dislodge you with lower bids.

Obstacles abound, but that’s where the road is headed:

The success of the gig economy is dictated by a region’s culture as well. In the US or the
EU, it’s accepted more rationally than in Asian countries. In countries like India, for
example, the traditional norms of work, propensity to stay anchored to stable jobs, fewer
networking platforms, etc., have curtailed its rapid expansion.

But regardless of its current pace of adoption worldwide, gig economy is here to stay and
strengthen, into the future. People like the flexibility of gigs, and technology has made it
easier to connect them to the jobs. It has filtered well through white-collar professions
such as in commerce, banking, the legal profession, etc. Even the labor-intensive business
process management industry is increasingly turning to this kind of employment to
perform critical jobs like customer service, manning both front-and back-office roles.

With more and more on-demand platforms emerging to support agile, responsive, cross-
geography work models, it’s a given that the future workforce will well and truly embrace
it with open arms.

‘Blue’ is the new ‘white’ in thriving ‘gig economy’

Even as “white collar” professionals are staring at job losses, “blue collar” occupations are
seeing a surge. The most sought-after jobs are that of drivers, delivery boys, security guards
and housemaids, according to a report by Betterplace, a platform for blue-collar employees.
The report is based on a sample set of 1.1 million individual profiles, employed by 1,000
employers. It highlighted the growing influence of the ‘gig economy’ in comparison to
traditional employment. The ‘gig economy’ refers to ‘on-demand’ jobs for a specific time
period.
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As infrastructure across India continues to be built, coupled with an increase in the number of
start-ups that have created new categories of jobs, demand for services such as house-help and
security has increased. According to Saurabh Tandon, COO and co-founder, Betterplace, of
the total 2.1 million jobs in the blue-collar sector, 1.4 million are in the gig economy. Industry
watchers attribute this to large amounts of funding and the growth of a new set of businesses,
such as ride-hailing aggregators and food-tech companies. This is the first time Betterplace
has collated this data, and hence, there is no comparison with past years.
High churn rate
In the blue-collar segment, demand for delivery boys is pegged at eight lakh, drivers at six
lakh, and the need for security guards at 3.5 lakh. While the demand is strong, these jobs also
see high attrition rates ranging between 40-300 per cent. “People switch jobs for a few hundred
rupees,” stated Tandon. This can be largely due to low salaries, which start from ₹10,000. For
example, people drawing salaries in the range of ₹15,000-25,000 have seen a 35 per cent
attrition in 2018. “Higher minimum wages is a necessity to meet the burgeoning demand,”
said Tandon.
Madhav Krishna, CEO and co-founder of Vahan, a talent management software company, said
that sourcing the right talent at the appropriate cost is the key, more so for blue collar or
frontline positions, for which hiring is done in large volumes.
Role of urbanisation
The report also breaks down the jobs geographically. Driven by urbanisation, Maharashtra
tops the list, as it is expected to generate 4.1 lakh jobs; Karnataka follows with 3.09 lakh jobs
with Delhi at 2.2 lakh jobs. Tier I cities still account for the lion’s share of job opportunities
with Bengaluru topping the list with 2.35 lakh jobs. Tandon also believes that blue-collar jobs
are set to grow at a pace that will be twice faster than the GDP rate in the immediate future.
Some in the industry, like RituparnaChakravarti, co-founder, TeamLease and President, Indian
Staffing Federation, believe that there is no such thing as a blue-collar job. “A driver in
Ola earns more than an entry-level software engineer. Then can you term that [a driver’s
job] a blue-collar one?” she asks.

A secure future for platform workers

Platform workers are individuals who use an app (such as Uber) or a website (such as Amazon Turk) to
match themselves with customers, in order to provide a service in return for money. They offer a diverse range
of services including transport, coding and writing product descriptions .
The Code on Social Security Bill, 2020, for the first time in Indian law, attempted to define
‘platform work’ outside of the traditional employment category. It says: “Platform work means
a work arrangement outside of a traditional employer-employee relationship in which
organisations or individuals use an online platform to access other organisations or individuals
to solve specific problems or to provide specific services or any such other activities which
may be notified by the Central Government, in exchange for payment.” While the long overdue
move to recognise platform work has been made, the Code has drawn criticism from platform
workers’ associations for failing to delineate it from gig work and unorganised work. A
categorical clarification could ensure that social security measures are provided to workers
without compromising the touted qualities of platform work: flexibility and a sense of
ownership.

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 An ongoing global conversation on platform workers’ rights has been around the
misclassification of platform workers as ‘independent contractors’; adjudications and
emerging amendments to labour laws in Ontario and California have shown a move towards
granting employee status to platform workers, thus guaranteeing minimum wage and welfare
benefits. This is the view propagated by international agencies in the EU, including the
European Trade Union.
Flexibility of the platform
The ostensible preference for employment status stems from the fact that while platform work
promises workers flexibility and ownership over delivery of work, they are still largely
dictated by mechanisms of control wired by the algorithm. This affects pricing per unit of
work, allocation of work, and hours. Additionally, entry into on-demand platform work like
ride sharing and food delivery are dependent on existing access to vehicular assets. The
average Indian worker on a ride-sharing platform has limited access to such capital. Thus, to
enter the platform economy, workers rely on intensive loan schemes, often facilitated by
platform aggregator companies. This results in dependence on platform companies, driven by
financial obligations, thus rendering flexibility and ownership moot in the short- to middle-
term investment cycle.
However, contrasting evidence suggests that for specific categories of workers with basic
access to capital, the flexibility of the platform is a significant attraction. Smallholder agrarian
labour migrants with access to vehicular assets and capital hailing from peri-urban areas rely
on the low barrier of entry and flexibility of platform work to accumulate wealth that they
invest back into farm work.
The Code states the provision of basic welfare measures as a joint responsibility of the Central
government, platform aggregators, and workers. However, it does not state which stakeholder
is responsible for delivering what quantum of welfare. To mitigate operational breakdowns in
providing welfare services, a tripartite effort by the State, companies, and workers to identify
where workers fall on the spectrum of flexibility and dependence on platform companies is
critical.
The role of platform workers amidst the pandemic has presented a strong case to
attribute a more robust responsibility to platform aggregator companies and the State. As
argued by Aditi Surie, platform workers were responsible for delivery of essential services
during the pandemic at great personal risk to themselves. They have also been responsible
for keeping platform companies afloat despite the pandemic-induced financial crisis. This has
cemented their role as public infrastructures who also sustain demand-driven aggregators. The
dependence of companies on platform workers merits a jointly assumed responsibility by
public and private institutions to deliver welfare measures.
A way forward for platform workers is through a socio-legal acknowledgement of the
heterogeneity of work in the gig economy, and the ascription of joint accountability to the
State and platform companies for the delivery of social services.

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