The move is aimed at balancing the ease of compliance for establishments while ensuring strong worker protection, said a senior government official.
The government has codified 29 labour laws into four labour codes-Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; and Occupational Safety, Health and Working Conditions Code, 2020-with a focus on decriminalisation and rationalisation of penalties. Compounding of offences has been introduced in the codes, under which first-time offences punishable up to one year’s imprisonment are compoundable and repeat offences can also be compounded after a gap of three-five years.
Compoundable offences are those which allow a defaulter or an accused to reach a settlement with the designated authority upon payment of the prescribed fee. “Through provisions such as for inspector-cum-facilitator, compounding and penalties, the new Codes promote a more facilitative regulatory environment, shifting the focus from punishment to compliance,” said Rishi Bagla, chairman, CII Western Region.
Further, the concept of “improvement notice” prior to prosecution has been introduced to reduce litigation. Under this, sufficient time will be given to the party before starting the proceedings. The violations which are merely procedural have been decriminalised and also made compoundable, irrespective of contraventions done by employers, employees or trade unions. “Decriminalisation and compounding will facilitate employers in easier implementation of the labour codes and create an ease of doing business environment, while improvement notices ensure monitoring of the health and safety provisions in a timely manner,” said Noorul, executive partner at Lakshmikumaran & Sridharan Attorneys, a law firm.