Photo: Bloomberg
Photo: Bloomberg

Employers fear legal harassment under Wage Code

  • Under the new Wage Code rule, an employee or a registered Trade Union are also authorized to file a complaint before a Court of Law for prosecuting the employer
  • Wage Code balances the right of an employee and an employer, said labour ministry official

New Delhi: The Wage Code that merged four existing labour laws may have been presented as one that will reduce regulatory friction and improve ease of doing business, but a section of the employers fear that certain provisions in the new labour law will increase legal harassment in the hands of their employees.

“The powers of Inspectors have also been conferred on employees and registered Trade Unions. Accordingly, under the said provision, an employee or a registered Trade Union are also authorized to file a complaint before a Court of Law for prosecuting the employer," said Michael Dias, secretary of the Employers Association-Delhi, an industry federation.

Dias said his organization has assessed the provisions and believe that since workers definition is no more confined to just one segment of the employees earning less than Rs. 18,000 per month, it empowers all employees to go ahead with legal action against employers.

“The provisions contained in the existing enactments do not confer any such right to the employees or to their Unions. As per the existing Law only an authorized person appointed by the appropriate Government may prosecute an employer. In order to initiate such prosecution action a series of exercises like issuance of a show cause notice and obtaining prior sanction from a higher authority have to be undergone by the said Officer. However, it is shocking to note that the Code is giving a blank cheque to the employees and to the unions for prosecuting the employers," the Employers Association said in an email response.

Dias, said it is needless to submit that once a criminal case is filed the routine practice followed by Criminal Courts is to issue summons to the persons arraigned as accused in the complaint. Then the accused will have to appear before the Court along with sureties for seeking bail and to repeat his/their appearance before the Court on the subsequent hearing days. Such appearances before the Court itself will be a harrowing experience for an employer regardless of the outcome of the case, he explained and sought more clarification and reprieve from the government when it frames rules of the Wage Code.

The Association said, the code has increased fine on employers from Rs. 500 to between Rs. 50,000 and Rs. 100,000 that’s a more than 100 times growth in fine and such provisions may turn the employees, their leaders and labour officers despotic and result in wide spread persecution and corruption on their part.

“Our submission is that the job opportunities provided by the employers to the innumerable families cannot be under estimated. Instead of providing a congenial environment for peaceful co-existence of the employers and workforce, an intimidating climate is sought to be ushered to the detriment of our country and economy," it added.

However, a labour ministry official said requesting anonymity that the Wage Code balances the right of an employee and an employer. "We have made many provisions to reduce friction, paper work and ease compliance. Similarly, a law framed in 2019 has to be contemporary in terms of employees rights as well," the official said.

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