The enactment of the four Labour Codes has been hailed as a defining moment in reforming the outdated and archaic labour law regime in India. With the implementation of these Codes on the horizon, this article takes a closer look at the key changes introduced in each Labour Code in comparison to the existing provisions under various labour legislations. This comparative analysis is a ready reckoner for anyone looking to gain better insight into the nature of changes enshrined under the new Labour Codes.
A) Code on Wages, 2019
It subsumes four key legislations on wages, namely: The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.
It has introduced a broader applicability criterion in terms of both establishments and employees. It has also standardized definitions to bring about clarity in implementation. New provisions regarding mode, time and disqualification of payments of wages and bonuses have also been incorporated to remove ambiguities in enforcement. Given below is a comparative chart of the changes that have been introduced.
| S. NO | ACT | EXISTING PROVISIONS | CODE | PROPOSED CHANGES |
| 1 | Minimum Wages Act, 1948 | Applicability - Only to scheduled employments and those working in such scheduled employments. | Code on Wages, 2019 | Applicability - To all the establishments and employees |
| 2 | Payment of Wages Act, 1936 | Applicability - To all scheduled establishments and all employees drawing less than ₹24,000. | Code on Wages, 2019 | Applicability - To all the establishments and employees. |
| 3 | Payment of Wages Act, 1936 | Monthly Payment/ Salary - Payable (i) Upto 1000 employees - on or before 7th of succeeding month. (ii) Above 1000 employees - on or before 10th of succeeding month. | Code on Wages, 2019 | Monthly Payment / Salary -Payable Irrespective of the number of employees,payment to be made on or before 7th of succeeding month.
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Payment of Wages Act, 1936 | Full and final settlement shall be made in the subsequent month, basis the number of employees as cited in Point 3. Gratuity to be payable within 30 days from the last working day of the employee. | Code on Wages, 2019 | Full and Final Settlement - wages to be paid within 2 working days of the separation of the employee. No change with reference to Gratuity. |
| 5 | Payment of Bonus Act, 1965 | Mode of Payment of Bonus- By cash / DD / Bank Credit only. | Code on Wages, 2019
| Mode of Payment of Bonus- By Bank Credit only. |
| 6 | Payment of Bonus Act, 1965 | Disqualification for Bonus - Gross Misconduct | Code on Wages, 2019 | Disqualification for Bonus -In addition to Gross Misconduct, "Conviction of Sexual Harassment" is now an added provision. |
| 7 | (i) Minimum Wages Act,1948; (ii) Payment of Wages Act, 1936; (iii) Payment of Bonus Act, 1965; | Definition of Wages - Differs from Act to Act. | Code on Wages, 2019 | Common Definition of Wages across all 4 Acts. |
B) Code on Social Security, 2020
It subsumes the following nine legislations: the Employee's Compensation Act, 1923, the Employees' State Insurance Act, 1948, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Employment Exchanges (Compulsory Notification of Vacancies) Act,1959, the Maternity Benefit Act, 1961, the Payment of Gratuity Act, 1972, the Cine-Workers Welfare Fund Act, 1981, the Building and Other Construction Workers' Welfare Cess Act, 1996 and the Unorganised Workers' Social Security Act, 2008.
Several new provisions have been introduced under the Code for bringing uniformity in social security coverage for workers. Schemes such as Employees’ Provident Fund and Employees’ State Insurance now have broader applicability and voluntary coverage. The key changes introduced under the Code have been detailed in the comparative chart below:
| S.NO | ACT | EXISTING PROVISIONS | CODE | PROPOSED CHANGES |
| 1 | Employee's Provident Fund Act, 1952 | Applicability - Only to scheduled employments as prescribed in the portal. | Code on Social Security, 2020 | Applicability - Industry -specific application removed. |
| 2 | Employee's Provident Fund Act, 1952 | Condition to Apply for Exemption- No threshold prescribed | Code on Social Security, 2020 | Condition to Apply for Exemption - 100 or more establishments. |
| 3 | Employee's State Insurance Act,1948 | No provision on obtaining Voluntary Coverage. | Code on Social Security, 2020 | Voluntary Coverage provision added, subject to employer's discretion. |
| 4 | Employee's State Insurance Act,1948 | ESIC not applicable to Mines. | Code on Social Security, 2020 | ESIC applicable to Mines now. |
| 5 | Payment of Gratuity Act, 1972 | Fixed Term Workers / Employees - Not entitled to Gratuity. | Code on Social Security, 2020 | Fixed Term Workers / Employees - Brought in under the purview of Gratuity. |
| 6 | Employment Exchanges Act, 1959 | Applicability - 25 or more employees in an establishment | Code on Social Security, 2020 | Applicability - 20 or more employees in an establishment |
C) Code on Occupational Safety, Health and Working Conditions, 2020
It subsumes thirteen labour legislation namely, the Factories Act, 1948, the Plantations Labour Act, 1951, the Mines Act, 1952, the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, the Working Journalists (Fixation of Rates of Wages) Act, 1958, the Motor Transport Workers Act, 1961, the Beedi and Cigar Workers (Conditions of Employment) Act, 1966, the Contract Labour (Regulation and Abolition) Act, 1970, the Sales Promotion Employees (Conditions of Service) Act, 1976, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, the Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, the Dock Workers (Safety, Health and Welfare) Act, 1986 and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.
Various new provisions have been incorporated to bring about standardization in the statutory norms for occupational safety, health and working conditions for workers. The applicability threshold under the Factories Act, 1948 has been increased for the benefit of smaller enterprises. New provisions on common licenses have also been introduced to reduce the compliance Burden. The important changes introduced under the Code are summarized in the comparative chart below:
| S.NO | ACT | EXISTING PROVISION | CODE | PROPOSED CHANGES |
| 1 | Contract Labour (Regulation and Abolition) Act, 1970 | Applicability - Differs, state specific. | Code on Occupational Safety, Health and Working Conditions, 2020 | Applicability - To 50 or more across all the states. |
| 2 | Contract Labour (Regulation and Abolition) Act, 1970 | Obtaining License - State Specific | Code on Occupational Safety, Health and Working Conditions, 2020 | Common License across all the states. |
| 3 | Factories Act, 1948 | Applicability – (i) With the aid of power -10 (ii) Without the aid of power - 20 | Code on Occupational Safety, Health and Working Conditions, 2020 | Applicability (i) With the aid of power - 20 (ii) Without the aid of power - 40 |
| 4 | Factories Act, 1948 | Applicability – (i) With the aid of power -10 (ii) Without the aid of power - 20 | Code on Occupational Safety, Health and Working Conditions, 2020 | The threshold Threshold in Number of Workers for Appointment of: (i) Safety Officers - 500 (ii) Welfare Officers – 250 (iii) Canteen - 100 |
D) Code on Industrial Relations, 2020
It subsumes three key legislations: the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946.
The applicability threshold in terms of workers has been increased under the Code. At the same time, the provision on the grievance redressal committee has undergone changes. Given below is a comparative chart of the changes that have been introduced:
| S.NO | ACT | EXISTING PROVISIONS | CODE | PROPOSED CHANGES |
| 1 | Industrial Employment (Standing Orders) Act,1946 | Applicability - Provisions of Standing Orders shall apply to industrial establishment in which 100 or more workers are employed. | Code on Industrial Relations,2020 | Applicability - Provisions of Standing Orders shall apply to industrial establishment in which 300 or more workers are employed. |
| 2 | Industrial Disputes Act,1947 | Grievance Redressal CommitteeThreshold - 6 members | Code on Industrial Relations,2020 | Grievance Redressal Committee Threshold - 10 members |
CONCLUSION
The new Labour Codes have consolidated 29 legacy labour laws and brought down the number of legal provisions by a whopping 61% (from 1,232 to 480). Based on the recommendations of the 2nd National Commission on Labour (2002), these Codes have amalgamated, simplified and rationalized the extant labour legislation in the country. As explained above, this two-decade long reform exercise has resulted in much-needed removal of multiplicity of definitions, authorities and compliances while also bringing about greater transparency and accountability in implementation. Various changes under the Codes have also been driven by the growing penetration of technology in the labour market. Enhanced monetary penalties, reduced imprisonment clauses and provisions for compounding of offences will surely provide greater thrust to labour compliance without compromising on the vision of ease of doing business.