Author: Krishnagopal Abhay, a 2^nd year student at Campus Law Centre, University of Delhi

This is 2^nd of a 3-piece series, briefly overviewing the three labour and employment legislations, namely- The Occupational Safety, Health and Working Conditions (OSHWC) Code; the Industrial Relations Code, 2020; and the Code on Social Security, 2020. The previous piece pertained to the OSHWC Code. In this piece, we will briefly examine the Industrial Relations Code, 2020.

The Bill is drafted with the aim of amalgamating, simplifying and rationalizing the relevant portions of three existing statutes, namely- the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946. It has 104 sections and three schedules. As per its Statement of Objects and Reasons, it aims to provide a broader framework to protect the rights of the workers to form unions and promote harmony by providing a mechanism for settlement of industrial disputes.

First Schedule states the matters which are to be provided in the ‘standing orders’ – as per section 2(zj) – under the Code. Section 28 states that the ‘Standing Orders’ in certain matters – as enumerated in the First Schedule – shall apply to every establishment having 300 or more workers. Every such establishment shall prepare their version, based on model standing orders prepared by the Central Government.

Second Schedule specifies the practices which are to be regarded as ‘unfair labour practices’ – as per section 2(zo) – and Section 84 prohibits any worker from committing them. It is punishable as per Section 86(5) and attracts a fine between ten thousand rupees and two lakh rupees.

Third Schedule lays down the various conditions of service of the employees and Section 40 requires the employer to not change such conditions without giving a notice period of 21 days to the employees. Sections 39 and 41 gives power to the ‘appropriate Government’ to exempt, conditionally or unconditionally, any establishment or class of establishments from following any or all the above-mentioned provisions regarding ‘standing orders’ and ‘notice of change’ respectively.

Section 3 provides for the constitution of a ‘Works Committee’ to promote amity between employers and employees and Section 4 mandates establishment of a ‘Grievance Redressal Committee’ for resolving individual disputes, having adequate representation of women therein.

Section 6 deals with the registration of Trade Unions. Seven or more members of a Trade Union can apply, and the ones having minimum 10% of the workers or 100 workers as members, whichever is less, shall be registered. Section 9(5) deals with withdrawal and cancellation of Trade Unions by the Registrar. It may be done on a verified request made by that union; on information received that rules have been contravened; or if the membership falls between 10% of the workers or 100 workers, whichever is less. For the latter two reasons, the Registrar is required to give a 60 days prior notice of cancellation to the concerned union specifying the reasons. Section 10 gives the aggrieved parties the right to appeal to the Tribunal against such orders. Section 14 requires constitution of a ‘negotiating union or negotiating council’ in an industrial establishment having registered Trade Union, which shall negotiate with the employers. In case of a sole registered Trade Union, then that only becomes the Negotiating Union as well. In case of multiple ones, then it will be the one having at least 51% of workers in its muster roll. As per Section 20, any person above the age of 14 years employed in a non-hazardous company may become a member of a Trade Union.

Section 16 provides for immunity to the registered Trade Unions and the office bearers thereof against proceedings in a Civil Court pertaining to the matters specified therein. Section 22 deals with adjudication of disputes of the Trade Unions by the jurisdictional Tribunal of the area, also barring the power of any other Civil Court to adjudicate upon such disputes. Section 27 provides for the recognition of a Trade Union or a Federation of Trade Unions by the Central/State Governments at Central and State level respectively, if they deem it fit.

Section 42 allows for voluntary arbitration between the employers and employees through a written agreement for solving industrial disputes. A copy of the said agreement has to be forwarded to the appropriate Government and the conciliation officer. When a dispute has been referred and a notification for the same has been issued, the appropriate Government may prohibit the continuance of any strike or lock-out regarding such dispute. The provisions of Arbitration and Conciliation Act, 1996 are not applicable to any arbitrations under the Code.

Section 43 provides for the appointment of ‘conciliation officers’ by the appropriate Government, who shall mediate and promote settlement of industrial disputes. Section 44 provides that the appropriate Governments may constitute one or more ‘Industrial Tribunals’ to adjudicate industrial disputes and discharge other functions as prescribed under the Code. Section 46 gives discretion to the Central Government to constitute of one or more ‘National Industrial Tribunals’ to adjudicate industrial disputes involving questions of national importance or could impact industrial establishments situated in more than one state. Section 55 gives power to the appropriate Governments to modify or reject the award decided by the Tribunal in the interest of national economy or social justice.

Section 62 states that no employee of an industrial establishment shall go on a strike without giving a notice of the strike to the employer, within 60 days before striking; or within 14 days of giving such notice. Similarly, no employer can lock-out any worker without giving them a notice within 60 days before locking-out; or within 14 days of giving such notice; or before the expiry of the date of the lock-out. In addition, both the parties are restricted during the pendency of conciliation and 7 days after its conclusion; or during the pendency of arbitration or Tribunal proceedings and 60 days after their conclusion; or during a period when settlement of an award is in process. Any strike or lock-out contravening the aforementioned provisions are illegal, and Section 64 prohibits any person from knowingly financially supporting it.

In Chapters IX and X, it is stated that the workers of establishments with workers ranging between 50-300, and non-seasonal establishments must pay 50% of the wages and dearness allowance to a worker who has been laid-off and a one-month notice period of wages to a retrenched worker. Any person contravening shall be punished with fine between fifty thousand rupees and two lakh rupees. Non-seasonal industrial establishments with more than 300 workers are required to take prior permission of the appropriate Government before lay-off, retrenchment or closure. The threshold – which earlier was 100 workers – may get increased by the Central Government through a notification. In the case of laid-off workers, they are required to pay 50% of wages and stipulated dearness allowance. In retrenchment, they are required to give a notice period of three months or wages of that period. Within one year of retrenchment, if any employer wishes to employ people, the retrenched workers shall be approached first. Violation of the same would attract a fine between 1 lakh and 10 lakh rupees.

One of the hotly contested aspects in this Code is the aforementioned provisions pertaining to lay-off, retrenchment and closure. The people opposing the increase argue that it would dilute job security of the workers and the people arguing in favour of it contend that it would lead to flexibility and freedom for the employers. This has been a timeless debate. Whether it turns out to be a hit or miss is yet to be seen. In the next and the final piece, we shall discuss the Code on Social Security, 2020.