- The Industrial Relations Code, 2020provides a broader framework to protect the rights of workers to make unions, to reduce the friction between the employers, and workers and to provide regulations for settlement of industrial disputes.
- The Code is prepared after amalgamating, simplifying and repealing following 3 central labour Acts:
- The Trade Unions Act, 1926
- The Industrial Employment (Standing Orders) Act, 1946
- The Industrial Disputes Act, 1947
- Industry means any systematic activity carried on by co-operation between an employer and for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes, whether or not:
- any capital has been invested for the purpose of carrying on such activity
- such activity is carried on with a motive to make any gain or profit, but does not include:
- institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service
- any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defense research, atomic energy and space any domestic service.
- any other activity as may be notified by the Central Government.
- Worker means any person except an apprentice employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied and includes working journalists, and includes any such person who has been, dismissed, discharged or retrenched or otherwise terminated in connection with or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person:
- who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957
- who is employed in the police service or as an officer or other employee of a prison; or
- who is employed mainly in a managerial or administrative capacity
- who is employed in a supervisory capacity drawing wage of exceeding eighteen thousand rupees (INR 18,000) per month or an amount as may be notified by the Central Government from time to time.
- Enhanced Wage Ceiling for Coverage of Supervisory Employees under Workers
- The threshold for including supervisory employees within the ambit of “workers” has been enhanced from INR 10,000 to INR 18,000. Thus, going forward, supervisory employees earning monthly wages between INR 10,000 and INR 18,000 will qualify as “workers”, and their employers may, amongst others, need to follow the retrenchment requirements to terminate their services.
- Trade Union means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers or between workers and workers, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.
- Retrenchment means termination by the employer of the service of a worker for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:
- voluntary retirement of the worker
- retirement of the worker on reaching the age of superannuation
- termination of the service of the worker as a result of the non-renewal of the contract of employment between the employer.
- The new Code prescribes that to be registered and recognized any Trade Union must have (and must continue to have post registration) at least the subscription of 10% workmen or 100 workmen employed in an industrial establishment, whichever is less.
REGISTRATION OF TRADE UNION
- Any seven or more members of a trade union by subscribing to their names, apply for registration to the Authority according to Rules of the Trade Union.
- At least ten percent of the workers or 100 workers, whichever is less, must be the members of the Trade Union on the date of making an application for registration.
- Registered Trade Union shall continue to have at least ten percent of the workers or one hundred workers, whichever is less.
- If the name of the Trade Union proposed to be registered is identical with an existing registered Trade Union, alteration of the name is required as asked by the Registrar of Trade Union.
- Single Body to Negotiate with Management
- The Code provides for the recognition of a negotiating union/council as the sole negotiating body for negotiating with the employer of the industrial establishment on matters to be prescribed. A registered trade union that is the only trade union in an establishment, or has a membership of a minimum 51% workers, will be recognized as the sole negotiating body of such establishment. However, where there are multiple trade unions and no single trade union commands such majority, a negotiating council needs to be constituted by the representatives of all major trade unions having at least 20% workers as members to function as the sole negotiating body.
RECOGNITION OF NEGOTIATING TRADE UNION
- For a Registered trade union, there shall be a negotiating union or council to negotiate with the employer of the Industrial Establishment.
- If only one Trade Union of workers registered in an Industrial Establishment then the employer of such Industrial Establishment shall recognize such Trade Union as the sole negotiating union of the workers.
- If more than one Trade Union of registered workers in an Industrial Establishment then at least fifty-one percent or more of workers on the muster roll of that Industrial Establishment will be recognized as the sole negotiating union by the employer.
STRIKES AND LOCK-OUTS
- Every person employed in an Industrial Establishment is prohibited for strikes and lock-out, in breach of contract:
- without giving 60 days advance notice of strikes and lock-out to the employer
- within fourteen days of giving such notice; or
- before the expiry of the date of strikes and lock-out specified in any such notice; or
- during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings; or
- during the pendency of arbitration proceedings before an arbitrator & 60 days after conclusion of such proceedings
GRIEVANCE REDRESSAL COMMITTEE
- Industrial Establishment having 20 or more workers shall constitute one or more Grievance Redressal Committees with the maximum 10 members for resolution of disputes arising out of individual grievances.
- Industrial Establishment having or employed 300 or more workers on any day of during the period of 12 months, must prepare the standing orders on the following matters:
- Classification of workers
- Manner of intimating to workers for hours of work holidays, pay-days and wage rates Shift Working
- Conditions and procedure of leave and holidays
- Requirement to enter premises by certain gates, and liability to search.
- Employer intending closure of an Industrial Establishment is required to serve 60 days advance notice to the Government.
- Provision for compensation in case of Closure to those workers who are in a continuous period of service not less than one year.
- The Code 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 the public interest.
- Provides procedures for the retrenchment of workers and the re-employment of the retrenched worker.
- For the retrenchment, the employer must either give three months’ notice or pay the retrenched worker in lieu of the notice period
- Where any worker is retrenched and the employer proposes to take into his employment any person within one year of such retrenchment, an opportunity will be given to the retrenched workers who are citizens of India to offer themselves for re-employment.
- Increase in Threshold for Closure, Lay-off and Retrenchment in Certain Establishments
- Under the Code, industrial establishments operating as factories, mines, and plantations need appropriate Government permission for closure of their establishments or lay-off/ retrenchment of their workers only if they, in the previous year, employed 300 or more workers on an average per working day.
- Further, the appropriate Government is empowered to increase this threshold. Under the existing law, this threshold is 100 workers, and certain States have increased it to 300 workers.
- This change will not only bring uniformity across all the States but also give greater operational independence to employers, which, in turn, encourages them to hire more workers.
CHANGE IN THE CONDITIONS OF SERVICE
- The employer is required to send a notice of change in the conditions of service in the following matters, to the workers being affected:
- wages, compensatory and other allowances
- contribution paid, or payable, by the employer to any provident fund or pension fund or for the benefit of workers under any law for the time being in force
- hours of work and rest intervals
- leave with wages and holidays
- starting, alteration, or ending of shift operating otherwise than in accordance with standing orders
- withdrawal of any customary concession or privilege or modification in usage introduction of recent provisions for discipline, or alteration of existing rules, except in so far as they are provided in standing orders
- rationalization, standardization, or improvement of plant or technique that is likely to lead to retrenchment of workers any increase or reduction in the no of persons employed or to be employed in any occupation or process or department or shift, not occasioned by circumstances over which the employer has no control.