Fatin Tirmizi 20180401076

A1)

Indian labour legislations are very old and complex to understand. Although
several efforts have been made in the past to simplify them, the wage code which
received the assent of President of India on 8th August 2019 is the significant one.
It is estimated that the new wage code would benefit around 50 crore workers
working in organized and unorganized sectors as 60% of total workers are said to
be paid less than the minimum wages currently.

The Second National Commission on Labour, in April 2012 had recommended that
the existing set of Labour laws should be broadly amalgamated into five groups
such as Industrial Relations, Wages, Social Security, Safety, Welfare, Working
Conditions. After many discussions with interested parties now the Labour Laws
will be codified into four groups and they are 1) Industrial Relations 2) Wages 3)
Social Security and 4) Occupations Safety, Health, Working Conditions.

The new Act is called, The Code on Wages, 2019. The objective of the Code is to
amend and consolidate the laws related to Wages, Bonus, and matters connected
with them. It amalgamates the four major Acts known as The Payment of Wages
Act 1936, The payment of Bonus Act 1965, The Minimum Wages Act 1948 and
The Equal remuneration Act 1976. New Code on wages has 9 chapters and 69
sections.
 1. Application of the code:

The Act applies to the whole of India and it comes into effect from the date
notified by the Central government. The code applies to all Factories and
Establishments unless exempted specifically in the code. That means it applies
to all employees and workers employed in organized and unorganized sectors.
But so far, the case was different. For example, The Payment of Wages Act was
applicable only to the employees drawing Rs.24000/- or lower wages per
month. The Minimum wages Act of 1948 was applicable only to scheduled
employments. Now, with the implementation of the new code, such limits and
conditions are removed. Further, all employees and workers now can seek
protection under this Act against non-payment, delayed payment and
unauthorized deduction of wages. If any difficulty arises in the implementation
of this Act central government will publish official gazette to remove such
difficulties.

2. Worker & Employee:

Code has given different definitions for Worker and Employee. The Employee
definition includes Manager, Supervisor and those who do administrative,
technical and clerical works. The worker definition does not include supervisors
drawing wages exceeding Rs. 15000/- per month and Managers and administrative
employees. Also, any person employed in Airforce, police service or employed in
Prison is not a worker. Interestingly the working Journalists and sales promotion
employees are considered as workers. Apprentices as per the Apprentice Act 1961
are excluded from the worker definition. But Act is silent on company trainees and
NEEM Students which may be a confusing factor for HR professionals and
Employers.
3. Wages:

Wages definition includes all remuneration payable to a person employed in

respect of his employment or work including Basic, dearness allowance and
retaining allowance if any. But excludes bonus, HRA, Conveyance, OT and few
more components. But such excluded components are if more than 50% of total
wages the difference should be added back to the total wages. The Code directs all
employers to pay wages on or before the 7th day of the month. Further, if any
employee is terminated from the employment for whatsoever the reason including
resignation, the balance wages must be paid within 2 working days.

4. Wage deductions:

The code has listed the authorized deductions and restricts the total authorized
deductions to 50% of the total wages in a wage period. if any deductions are more
than 50% of the wages, such deductions may be made only as per the manner
prescribed by the code. Also, the code specifies that no fines can be imposed on
any employee until such employee has been given an opportunity of showing cause
against the fine. and the total fine amount cannot exceed 3% of total wages. For the
purpose of imposing the penalty, the central government can also appoint an
officer at the rank of undersecretary to the government of India or equivalent rank
in the state government for holding an enquiry and to impose penalties.

5. Contractor labour:

The code provides a clear definition of “contract labour”. We must note that this
definition includes interstate migration workers which were earlier dealt by The
interstate migration of workers Act 1979. Further, it is interesting to note that any
employee is regularly employed by the contractor for any activity of his
establishment and his employment is governed by mutually accepted terms, gets
periodical increments and covered for social security and other welfare benefits is
not contract labour.

6. Employer:

Employer definition includes the legal representative of a deceased employer.

Surprisingly the definition includes “Contractor” also, hence the question arises
who is responsible for the payment of bonuses to contract employees. It is worth to
note that certain exemptions are provided to the employer. When an employer is
charged under this code but the employer has any other person who is an actual
offender and proves that the other person has committed the offense without an
employer’s knowledge, such person will be punished, and the employer is
discharged from his liability.

7. Industrial disputes:

The new wage code defines the industrial disputes as “any dispute or difference
between employers and employers, employers and workers or workers and
workers”. But any difference or dispute between employers and employees is an
industrial dispute? The Act is silent on this question. Further, an authority
established under this code can resolve the industrial disputes? Or its
responsibilities are limited to protect the rights of workers is still unclear.

8. Minimum wages:

So far, the minimum wages for scheduled employments were fixed by the
Minimum wages Act. But in the future, the Central government will be responsible
for fixing the National minimum wages. For the purpose of fixing the minimum
wages, Central governments may take into account primarily the skill of workers,
Geographical area and minimum living standards. No state government is allowed
to fix minimum wages less than the national minimum wages.

9. Equal pay for equal work:

The wage code prohibits wage discrimination based on gender. It directs all
employers to pay equal wages to equal work. Employers may have to keep proper
records in case of any differential wage payment for the same work. It also
prohibits discrimination on gender during recruitment. the disputes related to
wages discrimination will be decided by authority notified by the appropriate
government.

10. Inspector cum facilitator

Chapter 7 of the Wage code discusses the appointment and responsibilities of the
Inspector cum facilitator. The responsibility of the Inspector cum Facilitator is to
advise employers and workers related to compliance of provisions of the code. The
act intends to change the role of Inspector for the implementation of the provisions
of the code.

11. Bonus calculation and payment:

Wage code has retained almost all provisions of Payment of Bonus Act 1936 like a
minimum bonus, maximum bonus percentage and set on and set off method for
calculation of the bonus. But the payment of a bonus must be made only by a credit
to the bank account of an employee. In addition to earlier reasons, it is also
included that, If any employee is dismissed for conviction of sexual harassment,
such an employee shall be disqualified from receiving the bonus.
12. Offenses and penalties:

The code has prescribed different fines for different offenses. The important fact to
be noted is, Inspector cum Facilitator must give an opportunity to the employer to
comply with the provisions of this Code by way of a written direction and provide
time for such compliance and, if the employer complies with the direction,
Inspector cum Facilitator must not initiate the prosecution proceedings. Further,
any employer repeats the same nature of violation within a period of five years
prosecution shall be initiated. Code has increased the limits of fines and
punishment. For example, if any worker is paid less than prescribed minimum
wages employer shall be fined with Rupees 50000 and if the same violation is
repeated, he shall be fined with Rupees one lakh or 3 months imprisonment or
both.

Likewise, the code has described several provisions in detail to implement from the
date notified by Central Government by its gazette after which the state
governments have to frame rules or adopt model/central rules for implementation.

To sum up we can say that the efforts of the central government in reforming the
complex labour legislation are very welcome demarche. It benefits many
employees who are paid less than the minimum wages. It also benefits employers
in terms of reduced compliance work and some specific exemptions provided
therein.
A2)
A3)

(A). Compensation in case of Permanent Partial disablement

Section 4 (1) (c) of the Act under its clauses (i) and (ii) deals with the amount of
compensation in cases of permanent partial disablement either caused by injuries
specified in Part II of Schedule I or caused by injuries other than specified in
Schedule I.

Where the permanent partial disablement results from the injury specified in Part II
of Schedule

I, such percentage of the compensation which would have been payable in the case
of permanent total disablement as is specified there in as being the percentage of
the loss of earning capacity caused by that injury.

Where the permanent partial disablement results from the injury other than
specified in schedule

I, such percentage of compensation payable in the case of permanent total

disablement as is proportionate to the loss of earning capacity permanently caused
by the injury.

In order to find out the amount of compensation in cases of permanent partial

disablement, it

would be necessary to calculate the amount of compensation in case of permanent

total disablement with reference to the age of the injured employee i.e. 60% of his
monthly wages multiplied by relevant factor as indicated in Schedule IV and then
the amount so obtained shall be determined in proportion to loss of earning
capacity of the injured employee as specified in
Part II of the First Schedule in respect of injury in question.

In order to clarify the position in cases where the workman sustains more injuries
than one from

the same accident, Explanation I to Section 4 (1) (c) has been added. It provides
that where more injuries than one are caused by the same accident the amount of
compensation payable under this head shall be aggregated but not so in any case as
to exceed the amount which would have been payable if permanent total
disablement had resulted from the injuries.it means that compensation in such a
case shall not be more than what would have been payable in the case of
permanent

total disablement.

In the process of assessment of loss of earning capacity in cases of permanent

partial disablement caused by injuries which are not specified in Schedule I, it has
been clearly provided in

Explanation II to Section 4 (1) (c) that in assessing the loss of earning capacity for
the purpose of sub-clause (ii) the qualified medical practitioner shall have due
regard to the percentage of loss of earning capacity in relation to different injuries
specified in Schedule I. In United India

Insurance Co. Ltd. v. Sethu Madhavan, The Commissioner cannot disregard the
assessment made by a qualified medical practitioner. However, if he does not
accept the Certificate, he can refer

the Party to Medical Board for expert opinion and report or to call a second
medical report. C. David v. G. C. Mishra, In this case it was held that while
assessing compensation, the Court has to see whether the earning capacity of the
injured has been reduced in every employment and not merely in particular
employment in which he was engaged at the time of accident. That is the

reason why Section 4 (1) (c) (ii), Explanation II of the Act mandates that in case of
nonscheduled injury the qualified medical practitioner while assessing the loss of
earning capacity shall have due regard to the percentage of loss of earning capacity
in relation to different injuries specified in Schedule I.Amar Nath Singh v.
Continental Constructions Ltd, Here the appellant lost his left eye and made claim
as having lost his complete vision in that eye but medically it was assessed that
loss of vision was only 80%. The Commissioner assessed the compensation
payable to him as 100% under Schedule I, Part I Item 4. The High Court reduced
it to 30% relying upon the provisions under Item 26 of Part II Schedule I.

It was contended before the Supreme Court that the reduction made by the High
Court isimproper. The appellant relied upon the decision in Pratap Narain Singh
Deo v. Srinivas Sabata,

wherein the case of amputation of left arm from the elbow causing total
disablement to perform the work of carpenter was discussed and contended in the
present case that there is a loss of one eye and the earning capacity of the appellant
has been reduced from what he was capable of earning at the time of accident, as a
result of disablement. The contention was refuted and submitted that the appellant
himself has been claiming that he was fit for work and his evidence discloses the
same, and in the circumstances the view taken by the Commissioner is incorrect
and that of High Court is justified.Orissa State Electricity Board v. Kedar Charan
Lenka, The High Court of Orissa explaining and distinguishing ―loss of earning‖
and ―loss of earning capacity‖ observed that these two concepts have conceptual
difference. In case, there is no loss of earning and there is continuance of
engagement, reference to Section 4 (1) (c) (ii) of the Act is necessary to appreciate
the distinction.

The plea of employers was that in case of continuance of engagement and

nonreduction in earning, compensation is not payable. The Court observed that this
plea cannot be accepted. In considering loss of earning capacity in case of
permanent/partial disablement the comparison between the wages drawn by the
workmen before and after the accident from his employer at the time of accident is
not a determinative factor. If that be so, the employer to tide over liability may
offer a temporary employment to the claimant workman to deprive the latter of his
entitlement under the Act. That would be against the legislative intent. The intent is
to consider loss of earning capacity in such cases and not the loss of earning.