The wage structuring process will become further difficult in case the components of wages are linked on per cent basis to the Basic pay. This kneejerk kind of action and reaction will not stop, and a final wage structure is difficult to achieve.
New Labour Codes 2020
Definition of wage as provided in all four labour codes is not so simple as appears or claimed.
The honourable Supreme Court had also given similar observation in the matter of Surya Roshni in February, 2019, related to EPF contribution only. Section 6 of EPF Act clearly defines EPF contribution to be payable on Basic wages, Dearness Allowance and Retaining Allowance, if any, only; without...
The Code, thus, seeks to expand the coverage of "social security" by including even "gig workers" and "platform workers", apart from extending the same to "unorganised workers" and "employees".
The Code gives a fillip to the engagement of contract labour by granting an all-India licence for five years to a contractor hiring such labour. The introduction of "inspector cum facilitator" is going to be labour friendly.
The Second National Commission on Labour recommended consolidation of central labour laws into broader groups such as: (i) industrial relations, (ii) wages, (iii) social security, (iv) safety, and (v) welfare and working conditions. Is then the Codes the ultimate answer to the long pending reform?
These laws will now be notified and then the labour ministry will start framing rules and guidelines, which clarify many of the new provisions. It is expected that these laws will get implemented early next year.
Rules are yet to be made under the Industrial Relations Code, 2020 ("the IR Code"). As per media reports, the draft rules would be notified and possibly, the Code along with other codes would come into effect from 1st April, 2021.
The IRC is an exercise to afford flexibility to employers though on a generous side. If foreign direct investment does not increase in the next few years, then the government has to in right earnest search for reasons for lower FDI inflows.