Why looking beyond wage code for labour is important

Tejinder Singh Bedi
Tejinder Singh BediMay 27, 2018 | 17:20

Why looking beyond wage code for labour is important

Initially introduced in the Lok Sabha in August 2017, the draft wage code bill, 2017, is reportedly at its final stage. The parliamentary standing committee to which it had been referred to for scrutiny is understood to have finalised its report. It is reportedly ready to be tabled in the monsoon session of Parliament.

The best feature of the draft bill is that once it is passed, states will not be able to set minimum wages below the benchmark set by the Centre.

By seeking to combine the multiple Payment of Wages Act, 1936, the Minimum Wages Act, 1949, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976, into one code, besides ensuring equal minimum wage for equal work (for same skills and for both the genders) across all states, it would rationalise common cut-off dates for disbursement of wages.

Speaking during on the occasion of International Labour Day, in New Delhi, Union minister for labour Santosh Gangwar, had said that his ministry wants 38 labour laws to be subsumed into four broad codes — wages, industrial relations, social security and occupational safety and health and working conditions. The code in the offing would address the most important and basic part regulating minimal wage payments.


The rationalisation of labour laws will remove many ambiguities arising due to the multiplicity of definitions of same subjects and appropriate authorities, leading to ease of compliance without compromising wage security and social security to workers.

Introduction of a unified registration form for Employees' Provident Fund Organisation (EPFO) and Employees' State Insurance Corporation (ESIC), besides one single electronic challan-cum-return (ECR or return) to facilitate filing of EPFO and ESIC return through a unified process only is another long-pending step towards simplification of procedures to avoid duplicate efforts by employers at multiple windows with different time-lines for filing leading to unnecessary paper work, when both the provident fund and the employees state insurance statutory deductions are affected in one common payroll or in very few cases a manual payment of wages register still.

One hopes the other three pending codes on Industrial Relations, Social Security, and Occupational Safety, Health and Working conditions too get finalised soon. The ambit of the Industrial Relations code needs to be broadened to cover Industrial and Employee Relations - as a large number of employers indulge in many unfair labour and employment practices, especially invoking the definition of a supervisor and statutory conditions of employment provided for them.

Occupational safety needs to consolidate parallel, overriding or conflicting provisions in the Workmen Compensation Act, 1923, and the Employees State Insurance Act, 1948, besides other Acts providing for accidental compensation to visitors (other than employees) required to work inside the factories/establishments for on-site jobs, installations, inspections etc.

The Health and Working Conditions Code similarly needs to broaden its scope to cover all aspects of protection of environment beyond conditions of work alone. Most importantly a time limit needs to be fixed for all cases pending in labour courts and tribunals automatically granting decisions favouring the workmen or employees where litigation at all levels put from conciliation to legal remedies has crossed or crosses a period of say five years.

The Union and state labour ministries should post all such cases dragging for more than five years on their websites and update the same for scrutiny by parliamentary/legislative committees or even the offices of the prime minister/chief ministers of the states concerned.

While there is no doubt that subsuming the multiplicity of various labour laws and simplification of the process of implementation and compliances is a long-pending need, the crux will still lie in the sincere enforcement of the same.

Last updated: May 27, 2018 | 17:20
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