The union cabinet is likely to approve on Wednesday the code on wages which proposes making minimum wages a statutory right for all employees. A labour ministry source said the code will then be tabled in the ensuing monsoon session of Parliament. However, it is not clear if the industrial relations code that seeks to ease the labour market will be tabled in the coming session.
Minimum wages is now applicable to 51 “scheduled employments” only. The code on wages amalgamates the provisions of four extant Acts — the Minimum Wages Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. It aims at reducing disparity in minimum wages across states.
The Act will empower the Centre to notify a “national minimum wage” (below which no state can fix their minimum wages) and this will be revised every two years (five years if the dearness allowance becomes part of the minimum wages).
The passage of the Code on Wages will be the first among the four the present dispensation has been looking at to unleash its long-pending labour reform initiative by amalgamating 44 existing labour Acts into four codes — on wages, industrial relations, social security & safety and health & working conditions. This is with the aim of simplifying them and ensuring a conducive and harmonious environment for doing business.
The code on wages is the most non-controversial among the two others which have already been drafted. The code on Industrial Relations has a series of proposals like allowing units employing up to 300 people to retrench/lay off workers and/or close down without the government approval, making trade unions with negotiating powers more representative, barring outsiders from being office-bearers of unions in the organised sector and reducing such persons’ role in union activities in the unorganised sector. It will also seek to define industrial strike afresh by including concerted casual leave by 50% of more workers while the provision for prior notice of strike would be extended to “all activities similar to existing public utility services”.
The proposed omnibus Labour Code on Security and Welfare (LCSW) has also some contentious issues. As per the draft, once comes into force, several age-old schemes — including provident fund, pension and insurance schemes run under the EPF Act, 1952, and the sickness benefit scheme under the ESIC Act, 1948 — will cease to exist in their present forms.