17 October, 2017
Employee’s Compensation (Amendment) Act, 2017
The Employee’s Compensation Act, 1923 has been amended with effect from May 15, 2017. Some of the key amendments introduced are:
i. Every eligible employer should inform workmen, at the time of employment, of compensation rights under the statute in writing and through electronic means.
ii. Penalties for contravention have been increased from .5,000 (approx. US$ 77) to a minimum of .50,000 (approx. US$ 775), which may extend to . 100,000 (approx.US$ 1,550).
Code on Wages
As part of the Government’s exercise to reform labour laws and rationalize 38 existing legislations by framing four labour codes, namely: (i) the Code on Wages; (ii) Code on Industrial Relations; (iii) Code on Social Security; and (iv) Code on Occupational Safety, Health and Working Conditions; the Code on Wages Bill, 2017 (‘Bill ’) has been introduced in the Lok Sabha on August 10, 2017. The Bill seeks to create a comprehensive code on wages by consolidating:
(i) the Minimum Wages Act, 1948; (ii) the Payment of Wages Act, 1936 (‘POW Act ’); (iii) the Payment of Bonus Act, 1965; and (iv) the Equal Remuneration Act, 1976.
Rights of Persons with Disabilities
The Rights of Persons with Disability Act, 2016 (‘Disability Act ’), replaces the erstwhile Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. The Disability Act was brought into effect on April 19, 2017 with the objective of implementing the United Nations Convention on the Rights of Persons with Disabilities.
The key difference is the enhanced scope of the term “disability” and the applicability of the Disability Act to private employers. The Ministry of Social Justice and Empowerment has introduced Rights of Persons with Disability Rules, 2017 (‘Disability Rules ’) with effect from June 15, 2017.
Payment of Wages Act – Enhancement of Ceiling
The Ministry of Labour and Employment has, by a notification dated August 28, 2017, enhanced the salary threshold for applicability of the POW Act from . 18,000 (approx. US$ 300) per month to . 24,000 (approx. US$ 350) per month. The POW Act regulates the payment of wages to certain classes of employed persons, including in relation to time and mode of payment and permissible deductions.
Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017
The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (‘2017 Act ’), which received assent of the Governor of Maharashtra on September 7, 2017, will come into force and repeal the Maharashtra Shops & Establishments Act, 1948 with effect from such date appointed by the State Government by notification in the Official Gazette. Some of its key provisions are:
i. It applies to establishments employing 10 or more workers. Establishments with less than 10 workers are only required to provide an intimation of commencement/ closure of business.
ii. The registration certificate granted under the 2017 Act would be valid for a period of up to 10 years.
iii. The employer is required to notify the relevant authority within 30 days of closure of its business.
iv. Overtime is payable where a worker is required to work beyond nine hours a day or 48 hours a week, subject to a maximum of 125 overtime hours in a period of three months.
v. The 2017 Act prohibits discrimination against women in matters relating to recruitment, training, transfers, promotion or wages. Women workers may now be allowed to work between 9:30 PM to 7:30 AM , if they consent to the same and the employer provides adequate protection and transportation.
vi. Every worker is entitled to eight days of casual leave with wages in a calendar year, to be credited to his/her account on a quarterly basis, but which will lapse if not availed by the end of the year. Workers who have worked for a period of at least three months are entitled to five days leave for every 60 days worked during the year and those who have worked for 240 days are entitled to 18 days paid leave during the subsequent year. Paid leaves of up to 45 days can be accumulated by workers.
vii. Establishments with 50 or more workers are required to provide cr.che facilities.
Further, the State Government may require establishments with 100 or more workers to maintain canteen facilities. A group of establishments may provide a common cr.che and canteen facilities, subject to prescribed conditions.
viii. The penalties have been enhanced, with inter alia a maximum fine of . 1 lakh (approx. US$ 1,500) and an additional fine of up to . 2,000 (approx. US$ 30) per day for continuing contravention.
Payment of Gratuity Act – Ceiling to be Doubled
The Union Cabinet has, on September 12, 2017, given its approval for introduction of the Payment of Gratuity (Amendment) Bill, 2017 (‘Bill ’) in the Parliament. The Bill seeks to double the maximum limit of gratuity under the Payment of Gratuity Act, 1972 (‘Gratuity Act ’) from 10 lakhs (approx. US$ 15,000)9 to . 20 lakhs (approx. US$ 30,000).
8 Rules 11UA and 11UAA of the Income-tax Rules, 1962 [Notification No. 61/ 2017 dated July 12, 2017].
9 The Gratuity Act entitles every employee who has completed five years of service, upon cessation of employment, to gratuity calculated at the rate of 15 days wage for each year of completed service or part thereof in excess of six months, currently subject to a maximum of . 10 lakhs (approx. US$ 15,000).
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
