Whom do labour codes benefit the most: employee or manager? An individual employee satisfying the definition of 'worker' will be entitled to specific benefits as mentioned under the new labour codes. The new labour codes have provided clarity in the definition of a 'worker', manager and supervisor. Read on to know who benefits more under the new labour codes
The government is set to introduce four new labour codes to replace 29 current central labour laws. The new labour codes are related to wages, social security, occupational safety, health and working conditions, and industrial relations.In the labour codes, the definition of 'worker' is one of the key concepts. This is because the definition of 'worker' defines who will be covered under the new labour codes when introduced for specific benefits such as overtime and leave encashment. The new labour codes have gone one step ahead and have provided a separate definition of an 'employee' and a 'worker'.
This is likely to create a distinction among the employee population in all organisations considering there are specific benefits under the labour codes which are applicable only to such workers and not to all employees.
Who is a worker under new labour codes?
As per the labour codes, definition of worker includes any person employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work.
However, there are certain exceptions to the definition of 'worker'. An individual can be excluded from the definition of worker if either of the below conditions are satisfied:
The person is employed mainly in a managerial or administrative capacity; or The person is employed in a supervisory capacity drawing wage exceeding Rs. 18,000 per month or an amount as may be notified by the Central Government from time to time; Also, any person who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act,1957 or is employed in the police service or as an officer or other employee of a prison is specifically excluded from the definition of worker.
A data analyst is an example of a worker if he is an individual contributor without a managerial/supervisory role.
Do note that wage here refers to the definition of 'wage' as defined under the labour codes. Thus, if an individual's 'wage' which includes basic, special allowances and any other allowances exceed Rs 18,000 per month and the person is in a supervisory role, then he/she will not be covered under the definition of 'worker'.
Why new definition of 'Worker' is needed
While a similar definition of 'workman' exists under the current Industrial Disputes Act, it is applicable for limited purposes such as retrenchment or in cases of disputes with an employer. From an employer's perspective, it may be quite challenging to identify workers that are covered under the current laws. This is because the current given definition lacks clarity and has been a matter of extensive litigation in the past. Terminologies such as managerial or supervisory role have not been defined and may have very different meaning in today's digital world compared to what was interpreted by the courts in the past.
On June 8, 2022, the Chennai Labour Court in the case of Thirumalai Selvan Shanmugam vs Tata Consultancy Services held that whether an individual qualifies as a worker will depend on roles and responsibilities documented in the appointment letter or promotion letter and those executed by the individual on a day-to-day basis.
Benefits that are available to 'workers'
There are specific benefits under the labour codes which are applicable only to 'workers'. Thus, it becomes very important for organisations to conduct a detailed evaluation of job descriptions, roles and responsibilities of individuals to identify 'workers' in the organisation.
Below are some of the key benefits under the labour codes which will apply only to 'workers':
A. Under the Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code) - Many provisions under the OSHWC Code are applicable only to 'workers', such as:
Employee benefits
a. Extra wages for overtime work
b. Annual leave and leave encashment
Working time
a. Daily and weekly working hours
b. Determination of overtime hours
c. Limit on overtime hours
d. Requirement to obtain consent from worker for working overtime
Contract labour - Employer engaging individuals through contractors / third parties may qualify as principal employer with respect to 'workers' who qualify as contract labour. An employer has various additional obligations under the labour codes with respect to such contract labour. Thus, if an individual is hired as a 'contract labour', then the employer (the firm where the individual is placed by the manpower supply firm or contractor for working) will have certain obligations towards you. This includes obligation towards provident fund, employee state insurance, statutory bonus, etc.
Safety committee - Requirement to constitute safety committee consisting of representatives of employers and workers
B. Under the Industrial Relations Code, 2020 - Most of the provisions under the Industrial Relations Code are applicable only to 'workers', such as:
Retrenchment / Layoff
a. Compensation to be paid for workers who are retrenched / laid-off
b. Workers entitled to one months' notice and wages in lieu of such notice on retrenchment
c. Re-employment of retrenched worker - Where employer proposes to hire any person in that position within 1 year, the retrenched worker to have preference over other candidates
Committees
a. Grievance redressal committee - to be set up for resolution of individual grievances of workers
b. Works committee - to be set up by certain establishments to promote measures for securing and preserving amity and good relations between the employer and workers
Standing Orders - Establishments employing 300 or more workers are required to formulate standing orders governing conditions of service for workers as prescribed under the codes
Notice of Change - Employer required to give a notice of atleast 21 days to workers before effecting any change to any conditions of service (including wages, working hours, leave holidays, etc.)
It is evident from the above that various provisions of the labour codes are drafted with the intention to protect and enhance interests of workers - which do not include individuals at managerial or supervisory roles. Thus, one may say that the labour codes are more beneficial for a 'worker' as compared to a 'manager'.
(The writer is a partner, EY. Views expressed are personal.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: Muscle & Fitness - Author:Tax Cognition
