State nod for rules on code on wages, industrial relations

Mumbai: The state government has given a go ahead to rules framed for implementing the Maharashtra Code on Wages and the Maharashtra Code on Industrial Relations. The rules make it mandatory for employers to pay minimum wages, as determined by the state government, but also enable them to shut factories and fire workers with ease.

“Most of the rules are along lines finalised by the centre and they will be enforced as soon as the central government ascertains the date of implementation,” an official from the labour department told Hindustan Times. Rules for the two remaining labour codes – on social security and occupational safety – would be framed soon, he said.

According to the rules pertaining to the code on wages, the entire staff of an establishment including those in supervisory and managerial positions would be counted as ‘workers’, whereas according to existing rules, only employees with wages below ₹24,000 are considered ‘workers’.

The state government will ascertain the minimum wage based on employees’ skills, experience and geographical area, the rules state. They mandate the payment of additional wages to those working in adverse conditions, such as hazardous jobs and underground work.

“Existing rules pertaining to payment of minimum wages are advisory in nature, not mandatory. But the new rules make the minimum wage framework statutory and all employers including those in the unorganised sector would have to abide by them,” said a labour department official.

The rules have reduced the portion of salary that can be paid in the form of allowances from the current 75% to 50%. Deductions, including for loans and advances, have also been capped at 50% instead of the current 75%. All establishments with more than 20 employees would have to pay bonus, though employees found guilty of sexual harassment would be deemed ineligible for the same. Gazetted officers would handle disputes pertaining to bonus, floor wages and salary, the rules state.

The rules pertaining to the code on industrial relations further promote the ease of doing business, a key priority of the central government, by making it easier to lay off workers and close factories.

Government permission will no longer be needed to lay off workers, cut staff strength or shut down establishments with less than 300 workers, compared to the 100 workers now. Employees’ unions with over 51% membership would be recognised as authorised unions; in case no union has such representation, existing unions would collectively form the negotiating council, the rules state.

The rules also mandate the establishment of a workers’ reskilling fund and employers would need to deposit 15 days’ salary of laid-off workers in the fund within 45 days of the termination of their services.