As part of the Government of India’s efforts to increase the ‘ease of doing business’, it has proposed several amendments to the current labour laws. This article deals with the implications of the Labour Code on Wages Bill, 2015 for labour and is part of a set of three. The other two articles deal with the Factories Act (Draft Amendment Proposals), 2015 (http://www.slideshare.net/WinnuDas/implications-of-the-factories-act-draft-amendment-proposals-2015-for-labour) and the Labour Code on Industrial Relations Bill, 2015 (http://www.slideshare.net/WinnuDas/implications-of-the-labour-code-on-industrial-relations-bill-2015-for-labour). The Factories Act (Draft Amendment Proposals), 2015 (uploaded on the Ministry of Labour and Employment website on 16th September, 2015) seeks to amend the Factories Act, 1948. As of 2nd November, 2015, it has not been introduced as a bill in parliament and is available as a draft on the Ministry of Labour and Employment website till 31st December, 2015. The Labour Code on Wages Bill, 2015 (as modified on 19 March, 2015) has been proposed to amend and consolidate the Acts that relate to wages, namely the Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The Labour Code on Industrial Relations Bill, 2015 proposes to amend and consolidate the existing Trade Unions Act, 1926, Industrial Employment (Standing Orders) Act, 1946 and Industrial Disputes Act, 1947. These Acts govern the regulation of trade unions and their activities, standing orders and dispute resolution in industries respectively. These articles were put together in November, 2015. The purpose of these articles is to provide information about the proposed changes in labour law and briefly describe their impact from a labour perspective. They are intended to be used as material to base other arguments on and detailed contextual analysis or alternate recommendations fall outside their scope. I would like to thank D. Thankappan (NTUI), Openspace (http://openspace.org.in/), Garment Labour Union (http://glu.org.in/), Jonne Bosselaar (https://nl.linkedin.com/in/jonne-bosselaar-750a61a2) and Cividep-India (http://cividep.org/) for their comments and input on previous versions of these notes. However, any opinions expressed and errors in these notes are mine alone.

1. Implications of the Labour Code on Wages Bill, 2015 for Labour
Winnu Das, 3rd
Year, BA LLB (Hons.), WBNUJS,
https://in.linkedin.com/in/winnu-das-89528797;winnudas@gmail.com, 2 December, 2015
Pg [1]
Implications of the Labour Code on Wages Bill, 2015 for Labour1
The law relating to wages is currently covered under the Minimum Wages Act, 1948 (MWA),2
Payment of
Wages Act, 1936 (PWA),3
Payment of Bonus Act, 1965 (PBA)4
and the Equal Remuneration Act, 1976
(ERA).5
The Labour Code on Wages Bill, 2015 (Bill),6
has been proposed to amend and consolidate these
Acts. The key changes made by the Bill are discussed under (1) liability and complaints, (2) advisory boards
and committees, (3) power to make rules and (4) beneficial changes.
This note is to provide information about the proposed changes in the law and their implications for labour.
Context analysis and alternate recommendations fall outside its scope.
1.LIABILITY AND COMPLAINTS
1.1 Compounding: Compounding of offences will be introduced under the Bill.7
‘Compounding’ is an out of
court settlement where the offender pays the victim a sum of money not to prosecute or to have the offender
acquitted. The option does not exist in any of the Acts to be consolidated.
An offender cannot compound an offence for which he has previously been convicted.
2.ADVISORY BOARDS AND COMMITTEES
Under the Minimum Wages Act and the Equal Remuneration Act, the rules or notifications made are drafted in
consultation with Advisory Board, Advisory Committees and Sub-committees (referred to collectively here as
committees). There are separate boards set up by the Centre and the individual State Governments.
2.1 Representation of Workers: In the constitution of the Minimum Wages Advisory Board, a clause has
been added that states that not all scheduled employments for which wages have to be set need to be
individually represented in the committees.8
Thus, the diverse concerns of different categories of employees
will not be heard or considered in the fixing of minimum wages as some classes of employees may be
excluded.
2.2 Board for Equal Remuneration and Employment Opportunities for Women: The Equal
Remuneration Act requires that committees, with at least 50% women, be set up to advice the government on
the number of women employed in the concerned establishment or employment, the nature of work, hours of
work, suitability of women for employment, the need for providing increasing employment opportunities for
women, including part-time employment, and such other relevant factors as the Committee may think fit.
Committees for this purpose are not mentioned in the Bill.9
3.POWER TO MAKE RULES
General rule making power currently vests with the appropriate government (Minimum Wages Act) or the
State Government (Payment of Wages Act). The Bill vests all rule making power exclusively with the Central
Government.10
However, this not does not include several important powers such as the fixing of the actual
minimum wages for an employment and the constitution of the advisory boards for each state. These powers
will remain with the State.
1 Special thanks to D. Thankkappan, NTUI, Openspace (http://openspace.org.in/), Garment Labour Union
(http://glu.org.in/), Jonne Bosselaar (https://nl.linkedin.com/in/jonne-bosselaar-750a61a2) and Cividep-India
(http://cividep.org/) for comments on a previous version of this note. However, any opinions expressed are mine alone.
2 Minimum Wages Act, 1948, (MWA) http://labour.bih.nic.in/Acts/minimum_wages_act_1948.pdf.
3 Payment of Wages Act, 1936,
http://www.ilo.org/dyn/travail/docs/625/Payment%20of%20Wages%20Act%201936.pdf.
4 Payment of Bonus Act, 1965, (PBA) http://labour.bih.nic.in/acts/payment_of_bonus_act_1965.pdf.
5 Equal Remuneration Act, 1976, (ERA) http://pblabour.gov.in/pdf/acts_rules/equal_remuneration_act_1976.pdf.
6 Labour Code on Wages Bill, [updated on March 19, 2015] (Bill) available at,
http://www.prsindia.org/uploads/media//draft/Labour%20Code%20on%20Wages%20Bill,%202015.pdf.
7 Section 50, Bill.
8 Section 8 and 9, MWA and 15, Bill.
9 Section 6, ERA and Section 15, Bill.
10 Section 30, MWA, Section 26, PWA and Section 8, Bill.

2. Implications of the Labour Code on Wages Bill, 2015 for Labour
Winnu Das, 3rd
Year, BA LLB (Hons.), WBNUJS,
https://in.linkedin.com/in/winnu-das-89528797;winnudas@gmail.com, 2 December, 2015
Pg [2]
4.BENEFICIAL CHANGES
4.1 Basis of Fixing/Revising Minimum Wages: The Bill states that the State Government, while fixing the
minimum wages, must take into account the skill required, the arduousness of the work assigned to the worker,
the cost of living of the worker, geographical location of the place of work and other relevant factors in
addition to the advice of the committees as it does currently.11
Though these factors are mentioned in various
reports, there is currently no statutory uniform list of considerations.
4.2 Intervals of Revision of Minimum Wage: The Minimum Wages Act requires the State to revise minimum
wages every five years. The Bill introduces a condition that if the minimum wage does not have a Variable
Dearness component, it will have to be revised every two years.12
4.3 Prohibition of Discrimination: The ERAprohibits discrimination between men and women in the amount
of wages. The Bill will prohibit discrimination between men, women and trans-gender persons.13
4.4 Minimum Wage Revision during the pendency of a suit: Under the Minimum Wages Act, workers
involved in an ongoing case regarding wages cannot not benefit from any revision notified during the
pendency of the suit. The Bill makes these revisions applicable to all workers.14
4.5. Deadline for Payment of Wages: Presently, wages have to be paid before the expiry of seven or ten days
after the expiry of the previous wage period depending on whether there are less or more than 1000 workers
respectively. Under the Bill, wages will have to be paid depending on whether the worker is engaged on a daily,
weekly, fortnightly or monthly basis. Wages will have to be given at the end of the shift, before the weekly
holiday, within two days of the wage period or within seven days of the next month respectively. These
provisions will not be applicable to government establishments unless notified.15
4.6 Fines: Employees below 18 will not be fined according to the Bill. The current threshold age is 15.16
4.7 Payment of Wages: Presently, wages have to be paid in cash, unless the employee gives written consent
that the amount can be deposited in the bank. The Bill requires that the wage be deposited into the bank account
of the employee, via check or electronically, unless the government specifically notifies that it is permissible to
pay via cash to a certain amount. If the employee does not have a bank account it will be the responsibility of
the employer to open a bank account with zero balance.17
Though it is a generally beneficial provision as there
will be a record of the actual wages paid to the workers and how long they have been working in a particular
establishment, it may pose problems in rural areas where banks are few and far apart.
4.8 Cognisance of Offences: The Minimum Wages Act requires for certain offences the sanction of the
Government and in others, the sanction of an Inspector. There is a limitation of one month and six months
respectively on making a compliant from the day that the sanction is given. The Payment of Bonuses Act
requires the complaint to be made by or under the authority of the appropriate government or a specially
authorised officer. The Equal Remuneration Act allows complaints to be accepted by the court based on its
own knowledge, by the aggrieved party, by welfare institutions or by or under the authority of the government.
The Payment of Wages Act requires the complaints to be sanctioned by an inspector in some cases and in
others it requires that the facts be verified by an authorised body.18
Under the Bill complaints will be allowed if it is filed by an employee or a registered trade union or a
recognised welfare institution or a Facilitator.19
11 Section 5, MWA and Section 6 (4), Bill.
12 Section 3, MWA and section 8, Bill.
13 Section 4, ERA and Section 3, Bill; Section 5.
In the pending Draft Amendment to the Factories Act, Section 66A has been added which requires equal employment
opportunity to be given to trans-gender persons.
14 3(5), Bill and 3 (2A), MWA.
15 Section 5, PWA and 18, Bill.
16 Section 8 (5), PWA and 20 (5), Bill.
17 Section 6, PWA and Section 16, Bill.
18 Section 22B, MWA, Section 30, PBA, Section 12, ERA and Sections15 and 21, PWA.
19 Section 48, Bill.