The new labour codes, which are expected to be implemented from July, will bring with them a big transformation in work culture in the country. New labour laws: salary decrease, 12 hours daily duty, 4 days work in week. From working hours to the salary received in hand, all of that is likely to change if the new laws will come into force.
What are the laws and what will be the changes? We take a look. The Centre had notified four labour codes the Code on Wages, Industrial Relations Code, Social Security Code and the Occupational Safety, Health and Working Conditions Code on 29 September 2020. They are set to replace 29 labour laws, which have remained unchanged since Independence.
However, states are required to notify rules under the four codes to enforce these laws in their respective jurisdictions. Only 23 states and Union Territories have published the draft rules under the Code on Wages. The codes will be implemented when all states are on board. The proposed new labour codes provide companies with the flexibility of having 4 working days instead of five or six.
But four work days does not mean lesser work. There will be longer work hours if the working days are reduced. A four-day week will require employees to meet the 48-hour work hours daily 12 hours duty. This means that instead of working eight hours every day, they are expected to put in 12 hours duty. The reduced working days do not mean a cut in paid holidays. Those working four days would get three paid holidays every week.
Under the new codes, the take-home salary is expected to go down, as the Provident Fund (PF) contributions of the employee and the employer will increase. The PF contribution is required to be a proportion of 50 per cent of gross pay. As per the new labour codes, the eligibility requirement for leaves has been reduced from 240 working days to 180.
According to existing laws, a new employee needs to work 240 days to be eligible to take a leave. However, the new labour codes have reduced the number of days of work for a new employee to 180 days to be eligible for leave. However, the quantum of leave earned remains unchanged – for every 20 days of work, one day of leave is earned. The number of leaves which can be carried forward will continue to be 30.
The new rules have been drafted to improve the well-being of employees. They recognised the work-from-home (WFH) model which was implemented during the COVID-19 pandemic. Companies are required to have some basic principles in place regarding WFH to ensure that the work-life balance is not affected.
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The new industrial relation code would improve the ease of doing business by allowing firms with up to 300 workers to go ahead with lay-offs, retrenchment and closure without government permission. At present all firms with up to 100 employees are exempted from government permission for lay-off, retrenchment and closure, reports The Business St The new labour codes will benefit employees categorised as workers. The definition of “workers” under the new rules is similar to the definition provided under the Factories Act. However, this does not mean the benefits are only applicable to blue-collar workers, who work in factories standard.
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The new labour codes apply to all industries including the service sector. Every individual contributor (person not engaged mainly in managerial/administrative or supervisory role- for supervisor the limit of Rs 18,000 of wages per month has been prescribed), irrespective of the work assigned to him/her or remuneration drawn (except in case of supervisor) should qualify as a worker under the new labour codes.
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