- In the past, there were over 200 state laws and about 50 central labour laws in India that governed various aspects of employment.
- The Code of Wages Act was brought into the picture by the parliament to simplify the provision of Payment of Wages, Payment of Bonus, Equal Remuneration, and Minimum Wages Act by compiling it together and repealing the former laws
- Major drawback to be noticed in the Payment of Wages Act,1934 is that it neither defines nor differentiate between any of these vital terms.
- The Payment of Wages Act was based on the employee's wage limit, which was set at 24, 000 rupees.
- Code of Wages Act covers all the employs, while justifying the centre and the state’s jurisdiction.
- Code of Wages assert that the employer has to pay his employee wage that is not below the minimum wage
- Code of Wages added many new elements to the labour law, including an inspection mechanism and penalties for violations.
The Constitution added the subject of labour law in the concurrent list, meaning the state as well the centre has the access to legislate it. The complexity in the labour law arises due to this, since today we’ve over 200 state legislations and around 50 Central labour laws administering different aspect of labour employment in India.
The Code on wages Act was brought into the picture by the parliament to simplify the provision of Payment of Wages, Payment of Bonus, Equal Remuneration, and Minimum Wages Act by compiling it together and repealing the former laws. In this article we will discuss about the Code of Wages Act and Payment of Wages, in a comparative way to extend our further understanding of the laws.
THE PAYMENT OF WAGES ACT
The Payment of Wages Bill, 1935 was passed by the Legislative Assembly and it received the assent on 23rd April, 1936. It came on the Statute Book as "THE PAYMENT OF WAGES ACT, 1936 (4 of 1936)".It was repealed when the Code of Wages Act, 2019 came into the picture
When considering any law, it is important to first consider its applicability. The Payment of Wages Act was based on the employee's wage limit, which was set at 24, 000 rupees. The part of government where payment of wages Act was dedicated were the transport service, mines, and oil fields was Central Government and for all other cases, it was the State Government.
It is a unsaid understanding that any labour law is focused on the protection of it’s employee and it’s worker, however one major drawback to be noticed in the Payment of Wages Act,1934 is that it neither defines nor differentiate between any of these vital terms.
By defining the relationship between an employee and an employer, one can give it a scope. The fact that the definition of employer is not provided in Section 2(ic) of the Payment of Wages Act is another significant drawback in the law.
The Code of Wages Act makes an effort to close the gaps in the Payment of Wages Act.
CODE OF WAGES
The Code of Wages, 2019 was introduced in Lok Sabha by the Minister of Labour, Mr. Santosh Gangwar on July 23, 2019. It replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.
Code of Wages Act covers all the employs, while justifying the centre and the state’s jurisdiction. It fixates the Centre’s authority on railways, mines, and oil fields, among others, while giving the state room to decide for all other employees.
With regard to chapters I, II, III, and IV, the Code of Wages has reversed these previous provisions so that they are now universally applicable to all employees without any specific threshold or scheduled employment. However, there is a caveat: for chapter IV, the applicability of bonus payments will depend on the threshold that will be provided by the relevant government.
The Code on Wages Act, understands the importance of defining the major terms in the Act, by doing that it covers the loophole of the Payment of Wages Act
It defines worker as “Any person other than an apprentice who is paid by an establishment to perform any kind of operational, supervisory, technical, administrative, managerial, or clerical work, as well as any person who is classified as an employee by the relevant government; however, this does not include a member of the union's armed forces.”
The definition of employer being, "A person who employs one or more people in his or her business, directly or indirectly, shall be deemed to be an employer. Where the business is conducted by a department of the central or state government, the head of such department shall be deemed to be an employer. Additionally, the occupier of a factory will be regarded as the employer in this scenario.”
By including "contractor" and the "legal representative of a deceased employer" under the definition of employer, the code gave the term new meaning. The removal of the corporate veil by the adjudicating body to determine culpability is a significant addition to this setting.
The Code of Wages Act distinguishes between the terms "worker" and "employee" by defining "employee" to encompass people who operate in management and administrative capacities and removes any thresholds for those who work in supervisory capacities.
The Act also works on the security of minimum wages to all the workers in India, which earlier wasn’t that strong. It asserts that the employer has to pay his employee wage that is not below the minimum wage and such minimum wage will be notified by the appropriate government for the entire establishment falling within its jurisdiction.
The Code has made progress toward streamlining and eliminating inconsistencies in the format Payment of Wages law. When conducting a comparison analysis, we mostly concentrate on the areas where the two Acts are coherent. However, if we examine the Code of Wages Act in greater detail, we find that it has added many new elements to the labour law, including an inspection mechanism and penalties for violations. By establishing uniform definitions, tools for e-governance and transparency, an efficient grievance redressal process, the ability to appeal, and the nature of offences, it aids in the successful implementation of wage legislation.