The Code on Wages 2019 | UPSC

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IASbhai Daily Editorial Hunt | 30th Sep 2020

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Dear Aspirants
IASbhai Editorial Hunt is an initiative to dilute major Editorials of leading Newspapers in India which are most relevant to UPSC preparation –‘THE HINDU, LIVEMINT , INDIAN EXPRESS’ and help millions of readers who find difficulty in answer writing and making notes everyday. Here we choose two editorials on daily basis and analyse them with respect to UPSC MAINS 2020.

EDITORIAL HUNT #163 :“The Code on Wages 2019 | UPSC

The Code on Wages 2019 | UPSC

Justice K. Chandru
The Code on Wages 2019 | UPSC

Justice K. Chandru is a retired judge, Madras High Court

      HEADLINES:

A wage code that is a hasty composition

      CENTRAL THEME:

The Code on Wages (yet to be notified) has not succeeded in a consolidation of laws and is a case of tall official claims

SYLLABUS COVERED: GS 2 : Bills : Wages

      MAINS QUESTION:

The Code on Wages (yet to be notified) has neither succeeded in a consolidation of laws nor has detailed explanation to the previous laws . Critically Comment  -(GS 2)

      LEARNING: 

  • New Wages Code
  • Drawbacks
  • Omnibus Inspector

      INTRODUCTION: 

In the brief monsoon session of Parliament, three new labour codes (The Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code, 2020) were bulldozed

  • NEW BILLS : That four new labour codes will become operational before the year ends.
  • EXPANDING THE COVERAGE : The Code on Wages, 2019 would expand the coverage of workers in all industries in the unorganised sector as the old Minimum Wages Act covered only 30% of the total workforce.
  • REDUCTION OF SLABS : There were 10,000 slabs of minimum wages that existed, they would now be reduced to 200 slabs.
  • LENGTH OF THE BILL : While the previous four pieces of legislation had a total of 119 sections, the new Code has 69 sections.

Considering that the repealed legislations each had a definition section, inspectors, penalties, a competent authority..etc, any consolidation will impact their length.

  • LEGISLATION : As a result, the delegated pieces of legislation (Rules) will be bigger than the Code; this is no way to condense prior pieces of legislation.

CONSOLIDATION

The Code on Wages, 2019 seeks to consolidate and simplify four pieces of legislation —

  • Payment of Wages Act, 1936,
  • Minimum Wages Act, 1948,
  • Payment of Bonus Act, 1965 and
  • Equal Remuneration Act, 1976 — into a single code.

      BODY: 

NEW PROBLEMS WILL ARISE

  • BACKGROUND : All the four repealed pieces of legislation were enacted historically at different points in time and to deal with different situations.
  • CONCATENATION : The combining of asymmetrical laws into a single code is not an easy task and will only create its own set of new problems.
  • SIMILAR PROVISIONS : Barring a few new concepts, the new Code retains almost all provisions.

FEATURES OF NEW CODE 

  • These are features such as the procedure for fixing minimum wage
  • Limit for fines and deductions in wages
  • Minimum and maximum bonus
  • Calculation of allocable and available surplus
  • As well as gender neutral consideration in fixing wages.

DEFINITIONS

  • TERM WORKER : The Code will have the same definition of the term “worker”; but, a person employed in a supervisory capacity drawing up to ₹15,000 will also be considered a worker.
  • MINIMUM WAGE : In the (erstwhile) Minimum Wages Act, to fix minimum wage in an employment which has more than 1,000 workers to be first included in the Schedule, and, thereafter, minimum wages will be fixed as per law.
  • NUMBER OF WORKERS : The new Code has dispensed with the necessity of having a minimum number of workers and the inclusion of such employment into the schedule.
  • FIXING FLOOR PRICES : The central government will have the power to fix a “floor wage”.

Once it is fixed, State governments cannot fix any minimum wage less than the “floor wage”.

  • UNWARRANTED LEGISLATION : It is unwarranted since many States always fix minimum wages higher than the existing rates, depending upon the employment and workforce involved.
  • BINDING MINIMUM WAGES : The concept should be for a binding minimum wage and not have dual wage rates — a binding floor wage and a non-binding minimum wage.

ON MGNREGA

  • OVER-RIDING EFFECT : There were cases as to whether the Minimum Wages Act would have an over-riding effect over the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005.

Several High Courts have placed the Minimum Wages Act to override MGNREGA.
 

  • EXCLUDING MGNREGA : That has been set to rest by excluding MGNREGA from the purview of the Code on Wages.

OMNIBUS INSPECTOR

  • INSPECTION SCHEME : The Code has created an omnibus inspector-cum-facilitator who will act as per the inspection scheme framed by the government.
  • ROLE OF INSPECTOR : He will advise employers and workers to comply with the provisions of the code and may carry out inspections as may be assigned by the government (Section 51).
  • RANK OF INSPECTOR : As for the claim mechanism, Section 45 stipulates that they will be heard and determined by an authority who is not below the rank of a “Gazetted Officer”.

A government official without legal and administrative background can hear such claims.

  • BONUS DISPUTES : However, any dispute regarding bonus will continue to go before the Industrial Tribunal (the new Industrial Relations Code Bill contemplates a two-member Tribunal).
  • APPELLATE AUTHORITY : As against the decision of the Gazetted Officer, one can prefer an appeal to an appellate authority.
  • APPOINTMENT : Neither the Code nor the Rules (presently, draft Rules) prescribe the qualifications and experience required for appointment of competent authority.

PROVISIONS ON PENALTY

  • IMPOSING PENALTY : A new provision (Section 52) has been introduced where an officer (not below the rank of an under secretary to the government will be notified with power to impose a penalty in the place of a judicial magistrate.
  • CONTRAVENTIONS : An essential judicial function is now sought to be vested with the executive in contravention of Article 50 of the Constitution.

Article 50 – The State has been mandated to separate the judiciary from the executive in public services.

      IASbhai Windup: 

  • CONTRAVENING BASIC STRUCTURE : By merging the judicial function in the executive, the basic structure of the Constitution is affected.
  • ARBITRARY ROLES : Justice and fair trial cannot be ensured by the Executive Magistrates in as much as they are not required to be legally qualified.
  • EXPERIENCE COUNTS : Trained persons and in actual practice are required to perform various other functions.

It is clear that the Executive Magistrate has no role to play in conducting judicial trial and recording judicial decisions.

  • EXEMPTIONS : The Code also exempts employers from penal provisions if they were able “to prove that they had used due diligence in enforcing the execution of the code .
  • IMPACT : Similarly, as minimum wages mostly help the unorganised worker, the 200-slab categorisation may not have much of an impact.

PEOPLE’S UNION FOR DEMOCRATIC RIGHTS AND OTHERS VS. UNION OF INDIA & OTHERS, 1982 (ASIAD CASE) The Supreme Court of India observed: “If violations of labour laws are going to be punished only by meagre fines, it would be impossible to ensure observance of the labour laws and the labour laws would be reduced to nullity.

They would remain merely paper tigers without any teeth or claws.

       SOURCES:   THE HINDU EDITORIAL HUNT | The Code on Wages 2019 | UPSC

 

TRENDING NOW : Important The Hindu Editorials 

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