EMPLOYMENT UPDATE | OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020

Parliament recently promulgated the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) which received the assent of the President on 28 September 2020. The OSH Code will come into effect on a date notified by the Central Government in the Official Gazette. This marks the fourth of the four labour codes which the Government announced last year. The first being the Code on Wages was passed in 2019, while the second and third being the Industrial Relations Code and Code on Social Security were passed in 2020. More detailed analysis of the Code on Wages, 2019, the Industrial Relations Code and the Code on Social Security can be found here , here and here .

The OSH Code proposes to subsume 633 provisions of 13 major labour laws into one single code with 143 provisions. The laws to be subsumed are:

(1) The Factories Act, 1948

(2) The Contract Labour (Regulation and Abolition) Act, 1970

(3) The Mines Act, 1952

(4) The Dock Workers (Safety, Health and Welfare) Act, 1986

(5) The Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996

(6) The Plantations Labour Act, 1951

(7) The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

(8) The Working Journalist and other Newspaper Employees (Conditions of Service and Miscellaneous Provision) Act, 1955

(9) The Working Journalist (Fixation of rates of wages) Act, 1958

(10) The Cine Workers and Cinema Theatre Workers Act, 1981

(11) The Motor Transport Workers Act, 1961

(12) The Sales Promotion Employees (Conditions of Service) Act, 1976

(13) The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

Salient features of the OSH Code::

• Duties and Rights of Employers and Employees:
  
  (i) Duties of employer include ensuring that the workplace is free from hazards, comply with occupational safety and health standards, providing annual health examination, compulsory reporting of diseases and accidents etc.
  
  (ii) Duties of employees include taking reasonable care for the health and safety of himself and co-operate with the employer in meeting the statutory obligations.
  
  (iii) Designers, manufacturers, importers and suppliers of any article used in an establishment are duty bound to ensure such article is safe and does not probe any risk to health of workers.
  
  (iv) Architects, project engineers and designers responsible for any construction work or design of the project must ensure safety and health aspects of the building workers and employees at the planning stage.
  
  
• Working Conditions: The employer is required to provide and maintain welfare activities for employees including sanitation facilities to male and female employees separately, sitting arrangements, first-aid boxes, etc. The Central Government has been conferred the right to make rules in this regard. The employer is also entitled to make provisions for cleanliness and hygiene, ventilation, temperature and humidity, potable drinking water, lighting, adequate standards to prevent overcrowding, etc.
  
  
• Contract Labour and Inter-State Migrant Workers:
  
  (i) The OSH Code has modified the number of minimum contract labour to fifty (50) from twenty (20) for the OSH Code to apply. It has further been clarified that no contractor is permitted to engage any contract labour if they does not procure a license under the OSH Code.
  
  (ii) The contractors are obliged to extend all benefits as are available to a worker under the various labour laws to inter-state migrant workers as well. They are also required to pay to such workers a lump sum fare for to and fro journey to their native place.
  
  
• Authorities: For effective implementation of the OSH Code, appointment of Inspector-cum-Facilitators has been prescribed. Additionally, National and State Occupational Safety and Health Advisory Boards will be constituted to advise and assist the Government on matters relating to occupational safety and health.
  
  
• Offences and Penalties:
  
  (i) Obstructing discharge of duties of Inspector, imprisonment upto 3 months andfine upto INR 1 lakh.
  
  (ii) An offence that leads to the death of an employee will be punishable with imprisonment of up to two years, or fine up to INR 5 lakhs, or both.
  
  (iii) Where penalty is not specified, the employer will be punished with a fine between INR 2 - 3 lakhs.
  
  (iv) If an employee violates provisions of the OSH Code, fine upto Rs 10,000 may be levied.
  
  (v) Offences committed by a company shall hold each person liable who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company.
  
  
• Social Security Fund: For the welfare of unorganized workers, a social security fund will be set up and will be credited with the amount received from composition of certain offences.
  

MHCO Comment: The OSH Code is expected to bring a major reform in terms of health and safety and welfare of workers employed. On the other hand it is also going to lessen the burden of employers by replacing multiple registrations and licenses into one common licence. The OSH Code aims to empower both employees and employers. On one side it allows flexibility in hiring and retrenchment, while on the other side it will expand the social security net for both formal and informal workers.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.

 

EMPLOYMENT UPDATE | CODE ON SOCIAL SECURITY, 2020 

Parliament recently promulgated the Code on Social Security, 2020 (SS Code) which received the assent of the President on 28 September 2020. The SS Code will come into effect on a date notified by the Central Government in the Official Gazette. This marks the third of four labour codes which the Government announced last year. The first being the Code on Wages was passed in 2019, and the second one being the Industrial Relations Code was passed in 2020. More detailed analysis of the Code on Wages, 2019 and the Industrial Relations Code can be found here and here .

The SS Code subsumes nine regulations relating to social security, retirement and employee benefits, viz., (i) The Employees Compensation Act, 1923; (ii) The Employees State Insurance Act, 1948; (iii) The Employees Provident Fund and Miscellaneous Provisions Act, 1952; (iv) The Employees Exchange (Compulsory Notification of Vacancies) Act, 1959; (v) The Maternity Benefit Act, 1961; (vi) The Payment of Gratuity Act, 1972; (vii) The Cine Workers Welfare Fund Act, 1981; (viii) The Building and Other Construction Workers Cess Act, 1996; and (ix) The Unorganized Workers’ Social Security Act, 2008). The effective date of implementation and the issue of relevant schemes is awaited.

Salient features of the IR Code:

• Definitions: The SS Code has extended its applicability by defining various terms and providing social security in various sectors. The changes and additions to the definitions also aim to bring uniformity across the labour laws. Some important definitions are as follows:
  
  (i) Aggregator has been defined as a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.
  
  (ii)Gig Worker under the SS Code has been defined as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationships.
  
  (iii)Platform work has been defined as a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services, in exchange for payment.
  
  (iv)Social Security under the SS Code means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.
  
  (v)Unorganised Sector means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs or with less than 10 workers.
  
  
• Benefits to Gig Workers and Platform Workers: The SS Code confers the right on the Central Government and State Government to notify schemes for such workers related to life and disability cover, health and maternity, provident fund, employment injury benefit, housing etc. The SS Code mandates that the schemes may be funded through a combination of contributions from the central government, state governments, and Aggregators.
  
  
• Employees' Provident Fund (EPF): The SS Code has altered the applicability of the Employees' Provident Fund Scheme which will be applicable to every establishment in which 20 or more employees are employed. The Central Government may establish a provident fund where the contributions paid by the employer shall be 10% of the wages for the time being payable to each of the employees. The employee's contribution shall be equal to the employer.
  
  
• Gratuity: As per the SS Code, employees shall be eligible to gratuity, provided 10 or more employees are employed or were employed, on any day in the preceding 12 months. The SS Code provides that in case of fixed term employees, the employer shall pay gratuity on a pro rata basis and not on the pre-existing requirement of continuous service of five years.
  
  
• Employees State Insurance: The SS Code makes provisions for Employees State Insurance Corporation and allows for voluntary registration under the Employee State Insurance if the employer and majority of the employees agree. Further, the Government has the power to extend the Employee State Insurance Scheme to any hazardous occupation irrespective of the number of employees employed. The SS Code also provides for coverage of Gig Workers and Unorganised Sectors under the Employee State Insurance Scheme.
  
  
• Maternity Benefit: The SS Code provides for mandatory maternity leave for six weeks immediately following the day of delivery, miscarriage or medical termination of pregnancy. It provides for maternity benefit of maximum 26 weeks of which not more than 8 weeks shall precede the expected day of delivery. It also provides for a medical bonus of Rs. 3500 or as prescribed by the Central Government. It allows a woman to take two breaks of prescribed duration till the child attains 15 months of age.
  

MHCO Comment: The SS Code is far from being a mere consolidation of previous legislations. It has enhanced the coverage, extended the benefit to all workers in the organised / unorganised sectors, introduced concepts of providing maximum benefits under minimum governance and reflects uniformity in approach across the four labour codes. Although the SS Code does not provide any specific benefits to Gig Workers and Platform Workers, the SS Code provides the right to the Central and State Governments to notify schemes in this regard. The SS Code is expected to be implemented by April 2021.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.

EMPLOYMENT UPDATE | INDUSTRIAL RELATIONS CODE, 2020

Parliament recently promulgated the Industrial Relations Code, 2020 (IR Code) which received the assent of the President on 28 September 2020. The Code will come into effect on a date notified by the Central Government in the Official Gazette. This marks the second of four labour codes which the Government announced last year. The first being the Code on Wages was passed in 2019. More detailed analysis of the Code on Wages, 2019 can be found here .

The IR Code subsumes the following acts (i) The Industrial Disputes Act, 1947 (IDA); (ii) The Trade Unions Act, 1926 (TU Act); and (iii) The Industrial Employment (Standing Orders) Act, 1946 (IE-SO Act).

Applicability:

The IR Code redefines the term Industry, to bring it in accordance with the other labour laws. Section 2(p) of the IR Code, excludes the following from the definition of Industry: (i) Charitable institutions; or (ii) Government activities relating to sovereign functions including defence research, atomic energy and space; or (iii) any domestic service.

The definition of Industry has not categorically excluded hospitals, agricultural operations, educational institutions and even those places run by clubs, individuals or bodies of individuals, employing less than 10 people, unlike the IDA. Therefore, it can be assumed that they are deemed to be included.

Salient features of the IR Code:

• Definitions: The IR Code defines and re-defines the terms relating to labour laws to bring them in consonance with the other labour laws and remove discrepancies: A few examples are:
  
  (i)The term worker has been used to substitute workman which was used under the IDA and has also brought in certain changes such as excluding an apprentice from the definition of worker, but including sales promotion employees and working journalists under its ambit.
  
  (ii)The IR Code has defined an employee, which was absent in the IDA. It has been defined to include persons doing managerial, clerical, supervisory and technical work, thereby covering a larger pool of persons engaged by industrial establishments.
  
  (iii)The term employer has been expanded to include contractors and the legal representative of deceased employers as well. As per the revised definition, ‘employer’ now means and includes the head of the department, occupier of the factory, manager of the factory, managing director, contractor and legal representatives of a deceased employer. These provisions were missing in the definition of ‘employer’ under the ID Act.
  
  
• Standing Orders: The IR Code, like the Standing Orders Act, provides for the adoption of the standing orders in line with the model standing orders to be made by the Central Government. The IR Code provides that all industrial establishments, with 300 workers (previously 100) or more must prepare standing orders. The IR Code has further removed the provision for the Central Government making the provisions related to standing orders, applicable to establishments with less than the statutory threshold of 300 workers.
  
  
• Grievance Redressal: While a Grievance Redressal Committee (GRC) is constituted for an establishment with 20 or more workers, a Works Committee (WC) is envisioned for an establishment with 100 or more workers. While they are broadly similar, they differ in certain aspects. One such aspect is that there is a compulsory and proportional representation of women envisioned in the GRC, which is absent in a WC.
  
  
• Industrial Tribunals: The IR Code provides for the constitution of Industrial Tribunals and a National Industrial Tribunal to adjudicate disputes which may arise in the labour industry. While Section 55 of the IR Code empowers the tribunal to pass an award enforceable after 30 days, it also provides the central government to defer the enforcement of an award on the grounds of being against national economy or social justice. In place of multiple adjudicating bodies like the Court of Inquiry, Board of Conciliation and Labour Courts under the ID Act, only Industrial Tribunals have been envisaged as the adjudicating body to decide appeals against the decision of the conciliation officer, making the process of dispute resolution streamlined and less complicated.
  
  
• Strikes and Lockouts: The IR Code requires all persons to give a prior notice of 14 days’ notice before a strike or a lockout. As per the IDA, this criterion was only applicable for public utility services. The definition of strike has been amended to include within its ambit, ‘concerted casual leave on a given day by 50% or more workers employed in an industry’.
  
  
• Negotiating Union and Council: As per the IR Code, when there is more than one trade union in the establishment, the trade union with 51% of the workers as its members will be recognized as the sole negotiation union. This trade union shall be authorized solely to bargain with the employer and reach an agreement. In cases where none of the trade unions have 51% membership of the workers, then a Negotiating Council shall be set up by the employer.
  

MHCO Comment: The IR Code seeks to streamline the labour laws relating to trade unions, conditions of employment and industrial disputes. The rules for implementation of the IR Code have been recently codified by the Central Government. It is aimed by the government to bring the IR Code in enforcement by April, 2021.

This update was released on 9 January 2021.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance. 

EMPLOYMENT UPDATE | INDUSTRIAL RELATIONS CODE, 2020 

Parliament recently promulgated the Industrial Relations Code, 2020 (IR Code) which received the assent of the President on 28 September 2020. The Code will come into effect on a date notified by the Central Government in the Official Gazette. This marks the second of four labour codes which the Government announced last year. The first being the Code on Wages was passed in 2019. More detailed analysis of the Code on Wages, 2019 can be found here .

The IR Code subsumes the following acts (i) The Industrial Disputes Act, 1947 (IDA); (ii) The Trade Unions Act, 1926 (TU Act); and (iii) The Industrial Employment (Standing Orders) Act, 1946 (IE-SO Act).

Applicability:

The IR Code redefines the term Industry, to bring it in accordance with the other labour laws. Section 2(p) of the IR Code, excludes the following from the definition of Industry: (i) Charitable institutions; or (ii) Government activities relating to sovereign functions including defence research, atomic energy and space; or (iii) any domestic service.

The definition of Industry has not categorically excluded hospitals, agricultural operations, educational institutions and even those places run by clubs, individuals or bodies of individuals, employing less than 10 people, unlike the IDA. Therefore, it can be assumed that they are deemed to be included.

Salient features of the IR Code:

• Definitions: The IR Code defines and re-defines the terms relating to labour laws to bring them in consonance with the other labour laws and remove discrepancies: A few examples are:
  
  (i)The term worker has been used to substitute workman which was used under the IDA and has also brought in certain changes such as excluding an apprentice from the definition of worker, but including sales promotion employees and working journalists under its ambit.
  
  (ii)The IR Code has defined an employee, which was absent in the IDA. It has been defined to include persons doing managerial, clerical, supervisory and technical work, thereby covering a larger pool of persons engaged by industrial establishments.
  
  (iii)The term employer has been expanded to include contractors and the legal representative of deceased employers as well. As per the revised definition, ‘employer’ now means and includes the head of the department, occupier of the factory, manager of the factory, managing director, contractor and legal representatives of a deceased employer. These provisions were missing in the definition of ‘employer’ under the ID Act.
  
  
• Standing Orders: The IR Code, like the Standing Orders Act, provides for the adoption of the standing orders in line with the model standing orders to be made by the Central Government. The IR Code provides that all industrial establishments, with 300 workers (previously 100) or more must prepare standing orders. The IR Code has further removed the provision for the Central Government making the provisions related to standing orders, applicable to establishments with less than the statutory threshold of 300 workers.
  
  
• Grievance Redressal: While a Grievance Redressal Committee (GRC) is constituted for an establishment with 20 or more workers, a Works Committee (WC) is envisioned for an establishment with 100 or more workers. While they are broadly similar, they differ in certain aspects. One such aspect is that there is a compulsory and proportional representation of women envisioned in the GRC, which is absent in a WC.
  
  
• Industrial Tribunals: The IR Code provides for the constitution of Industrial Tribunals and a National Industrial Tribunal to adjudicate disputes which may arise in the labour industry. While Section 55 of the IR Code empowers the tribunal to pass an award enforceable after 30 days, it also provides the central government to defer the enforcement of an award on the grounds of being against national economy or social justice. In place of multiple adjudicating bodies like the Court of Inquiry, Board of Conciliation and Labour Courts under the ID Act, only Industrial Tribunals have been envisaged as the adjudicating body to decide appeals against the decision of the conciliation officer, making the process of dispute resolution streamlined and less complicated.
  
  
• Strikes and Lockouts: The IR Code requires all persons to give a prior notice of 14 days’ notice before a strike or a lockout. As per the IDA, this criterion was only applicable for public utility services. The definition of strike has been amended to include within its ambit, ‘concerted casual leave on a given day by 50% or more workers employed in an industry’.
  
  
• Negotiating Union and Council: As per the IR Code, when there is more than one trade union in the establishment, the trade union with 51% of the workers as its members will be recognized as the sole negotiation union. This trade union shall be authorized solely to bargain with the employer and reach an agreement. In cases where none of the trade unions have 51% membership of the workers, then a Negotiating Council shall be set up by the employer.
  

MHCO Comment: The IR Code seeks to streamline the labour laws relating to trade unions, conditions of employment and industrial disputes. The rules for implementation of the IR Code have been recently codified by the Central Government. It is aimed by the government to bring the IR Code in enforcement by April, 2021.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.

RERA UPDATE | BOMBAY HIGH COURT CLARIFIES THAT REAL ESTATE DEVELOPERS CANNOT RELY ON ‘FORCE MAJEURE’ CLAUSE TO DENY INTEREST TO HOMEBUYERS

The Bombay High Court recently in case of ‘Westin Developers Pvt Ltd. v. Raymond Alexis Nunes’ held that a real estate developer cannot rely on the usual ‘force majeure’ clauses to deny interest on delayed possession to homebuyers. This update analyses the said case.

BACKGROUND OF THE CASE:

• Raymond Alexis Nunes (Homebuyer) had purchased a flat in the project known as ‘Joanita Villa’ promoted by Westin Developers Private Limited (Developer). The parties had agreed that the Developer would handover possession of the flat on or before 30 June 2017.
  
  
• The Developer defaulted in handing over possession. Accordingly, the Homebuyer filed a Complaint before the Maharashtra Real Estate Regulatory Authority Tribunal (MahaRERA) for handing over possession of the flat along with interest for the delay. The Developer disputed the claim of the Homebuyer and argued that the delay in handing over possession of the flat was caused on the part of the competent authority namely Municipal Corporation of Greater Mumbai (MCGM) in granting the Developer the commencement certificate on time. The Developer argued that the delay in obtaining the commencement certificate was beyond its control and hence was covered under the force majeure clause in the agreement for sale.
  
  
• MahaRERA held that the Developer could not blame the MCGM for the incomplete work pending in the project and stated that the reasons cited by the Developer were not covered under the force majeure clause mentioned in the agreement. MahaRERA further held that the Developer had not provided any plausible reasons for the delay in handing over possession to the Homebuyer and directed the Developer to pay interest to the Homebuyer from 1 January 2018, giving the Developer six months extension as by way of a grace period.
  
  
• Being aggrieved by the order of MahaRERA, the Homebuyer filed an appeal before the Maharashtra Real Estate Regulatory Authority Appellate Tribunal (Appellate Tribunal) challenging the grace period granted to the Developer in payment of interest. The Appellate Tribunal allowed the appeal and held that there was no specific clause in the agreement, entitling Developer to any grace period of six months. The Appellate Tribunal directed the Developer to pay interest to the Homebuyer from 1 July 2017, which was the date agreed by the Developer to handover possession in the agreement till the actual date of possession.
  
  
• The Developer preferred an appeal before the Bombay High Court against the order of the Appellate Tribunal.
  
  
• The Developer submitted before the Bombay High Court that the agreement contained a clause that the possession date was subject to any cause beyond the control of the Developer including any order by Central or Local Authorities which included delay in issuance of the completion or occupation certificate by these authorities. The Developer stated that this fact was not considered neither by MahaRERA nor Appellate Tribunal.
  

THE BOMBAY HIGH COURT HELD:

• It was noted that the clause referred and relied upon by the Developer was nothing but a force majeure clause where the Developer could not be faulted for any delay in delivery of possession, if the delay is caused by any reason beyond the Developers control. Further the Bombay High Court held that a simple force majeure clause in the agreement does not provide for or entitle the Developer to any grace period and that the Developer has to make out a case that the delay caused in handing over of possession was due to factors referred to in the force majeure clause.
  
  
• The Bombay High Court further considering the facts of the case stated that it was apparent from the record that the MahaRERA and Appellate Tribunal were not impressed by any of the reasons submitted by the Developer towards the justification for the delay.
  
  
• Before dismissing the appeal the Bombay High Court held that the grace period of six months granted by the MahaRERA was nothing but an ad-hoc measure and was rightly not accepted by the Appellate Tribunal.

MHCO Comment: This judgment provides much needed clarification to the interpretation of the clause ‘Force Majeure’ and it is a welcome precedent to all homebuyers who are generally denied of interest on the delayed possession by the Developers on account of a standard Force Majeure clause in their respective purchase agreements.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.