While the Code on Wages, 2019 (hereinafter referred to as “the Code”) received Presidential assent on August 08 20191, the Government was yet to notify the effective date of the Code coming into force. The Code has unified and subsumed four different acts, namely the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 (collectively “Existing Legislation”). The implementation of the Code is expected to have wide ranging implications for a majority of stakeholders. Under Section 1(3) of the Code, the Central Government has the power to issue notification in the official gazette to appoint different dates for different provisions of the Code to come into force.
Pursuant to the powers vested with the Central Government by virtue of Section 1(3) of the Code, the Ministry of Labour and Employment published a notification in the official gazette on December 18, 2020 (“Notification”). The Notification brought into force: (i) Section 42 (1), (2), (3), (10) and (11); (ii) Section 67 (ii) (s) and (t); and (iii) Section 692. These provisions of the Code that have been brought into effect pertain to the Central Advisory Board (“Board”).
Composition of the Board
Under the Code, the members of the Board are required to be nominated by the Central Government. The Central Government is required to appoint (i) persons representing employees; (ii) persons representing employers. The persons representing employers are required to be appointed in equal numbers as the persons representing employees (i.e. in the ratio 1:1); and (iii) independent persons who shall not be in excess of one-third of the total members of the Board and five representatives of State Governments, as nominated by the Central Government3. The Code also ensures that the interests of women are well looked after by the Board by ensuring that the at least one-third of the total number of members of the Board are women. The Code also requires the Central Government to appoint a woman under the category of independent persons as the Chairperson of the Board.4 The Board has been granted the power to regulate its own procedure, including that of any committees formed by the Board5. Further the terms of office of the Board members, including that of any committees may be as prescribed6.
Duties of the Board
The Board has been granted wide advisory powers under the Code. The Board is required to advise the Central Government on reference, with respect to issues pertaining to: (i) fixation or revision of minimum wages and any other connected matters; (ii) providing increasing employment opportunities to women; (iii) the extent to which women may be employed in any place where any industry, trade, business, manufacture or occupation is carried on, including Government establishments; and (iv) any other matter relating to the Code7.
Existence of any Rules Governing the Board
With the coming into force of Section 42 of the Code, the Central Government would be required to begin appointing members of the Board. However, as of today, there exist no rules to govern the procedure of the Board, or the term of its members. To address this very issue, the Notification brought into effect Section 67 which grants the “appropriate Government”8 the power to formulate rules. Presently, the Notification has granted the “appropriate Government” the power to formulate rules pertaining to the procedure of the Board9 and the term of Board members10.
Repeal of Existing Legislation
While the Code under Section 69 repeals the Existing Legislation, the Notification at the moment has only repealed Sections 7 to 9 of the Minimum Wages Act, 1948 (“Act”) that pertained to the advisory board and its committees under the Act. The reason for limiting the scope of Section 69 through the Notification is to enable the Central Government to institute the Board in furtherance of implementation of the law laid down in the new Code and ensure there is no overlap with the advisory board that existed under the Act.
Footntoes
1 The Code on Wages, 2019. Available at:
2 The Notification clarifies that this Section is only brough into effect to the extent it relates to sections 7 and 9 of the Code (to the extent they relate to the Central Government) and section 8 of the Minimum Wages Act, 1948 (11 of 1948).
3 Section 42(1) of the Code on Wages, 2019.
4 Section 42(2) of the Code on Wages, 2019.
5 Section 42(10) of the Code on Wages, 2019.
6 Section 42(11) of the Code on Wages, 2019.
7 Section 42(3) of the Code on Wages, 2019.
8 Under the Code, the term “appropriate Government” has been defined as (i) in relation to, an establishment carried on by or under the authority of the Central Government or the establishment of railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or a central public sector undertaking or subsidiary companies set up by central public sector undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, subsidiary companies or autonomous bodies, as the case may be, the Central Government; (ii) in relation to any other establishment, the State Government.
9 Section 67(ii) (s) of the Code on Wages, 2019.
10 Section 67(ii) (t) of the Code on Wages, 2019.
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