India gets new labour law as govt notifies wage code; Centre caps weekly working hours at 48 under new labour codes

NEW DELHI: Amidst a debate over working hours, the Centre has capped the weekly working hours at 48 under the new labour codes, beyond which workers will be paid double the amount of their defined hourly wages.

Nearly four months after the draft rules under the four new codes were published for stakeholder consultation, the Centre on Friday published final rules under two of the codes - wages and industrial relations. For the other two codes, however, old rules will remain in force until final notification of the new ones.





Separately, states will have to notify their own rules, taking cue from the ones notified by the Centre. West Bengal was so far the only hold out, but with BJP winning the assembly elections it will also notify the rules in line with the Centre.

"The notification of the rules is an important step in moving the labour codes from policy to implementation. However, it is equally important to recognise that these central rules will largely apply to establishments where the central govt is the 'appropriate govt' - such as telecom, banking and insurance, mines, oil fields, major ports, air transport, along with central public sector undertakings and their contractors," said Puneet Gupta, a partner at EY India.

The rules under the code on wages also empower the Centre to set minimum wages and the national floor wage, apart from prescribing the manner for their timely payment. Besides, they hold the principal employer accountable for non-payment of bonus to the contractual employees, instead of the contractor. Further, it said that variable dearness allowance must be revised twice a year, based on changes in the consumer price index for industrial workers.

Gupta, however, said that the new rules are not clear on the categories of workers who will be covered under the definition of overtime.

Under section 83 of the Industrial Relations (IR) Code, govt also set up a National Reskilling Fund to ensure that workers who lose their jobs due to retrenchment are not just given a one-time severance pay but are also financially supported to learn new skills for re-employment. The fund will be primarily financed by the employer which has to contribute 15 days salary for every retrenched worker retrenched.