Introduction
Labour laws are a set of precedents and rulings which aim towards addressing the legal rights and restraints imposed on the working population of India. These employment laws attempt to monitor the relationship between an employer and his employee. Labour laws have a wide scope affecting a vast number of men and women as compared to the other branches of law. The major areas covered under labour laws relate to health and safety at workplace, unfair labour practices, holidays and annual leave, working hours, unjust termination, minimum wages to be fixed etc.
The Central Government has come up with 44 statutes with regards to labour-related issues, out of which 29 have been integrated in the form of four new labour codes.
Growth of Labour Laws in India
The origin of Labour laws in India can be studied in light of the Apprentice Act, 1850 which permitted orphans to search for work after attaining 18 years of age. Since then, a number of laws have been passed covering a wide array of aspects relating to industrial employment. One of the main focus of bringing labour laws in force was to provide for social security to the workers.
Subsequent to the Apprentice Act, 1850, the Factories Act, 1881 was passed along with, the Bombay Trade Disputes (and Conciliation) act, 1934. In the course of World War II, the two aforementioned laws, in addition to the Bombay Industrial Disputes Act, 1938, were amended. Further, the Bombay Industrial Relations Act, 1946, was brought into picture. Subsequent to this, the Industrial Employment (Standing orders) Act, 1946 was enacted. Later, the Trade Disputes Act, 1947 was replaced by the Industrial Disputes Act, 1947. This legislation provides for Governmental intervention in matters relating to labour disputes.
Issues with respect to labour are dealt under the Concurrent List of the Indian Constitution wherein, the State and Centre have the authority to frame labour laws. However, it is subjected to the condition that laws framed by the State legislature must be in line with the laws passed by the Centre.
Labour Codes
The 2nd National Commission on Labour recommended that the labour laws must be consolidated and simplified, giving rise to the implementation of four new labour codes. This is done in order to facilitate a wide coverage of labour-related issues, as specific laws are applied on the basis of employee classification across different thresholds. The four codes are namely –
Code on Wages, 2019
Code on Social Security, 2020
Occupational Safety, Health and Working Conditions Code, 2020
Industrial Relations Code, 2020
The Labour codes are enacted in order to safeguard the interests and rights of both, employers and workers. Moreover, it was passed with the aim of promoting the growth of the economy in addition to, establishing social stability by reducing employer-worker disputes.
The current article aims at laying emphasis on the Industrial Relations Code, 2020. The salient features and the legislations covered under the Code have been further discussed in the article.
Industrial Relations Code, 2020
The Industrial Relations Code was enacted in September, 2020 with the President’s assent being received on September 28, 2020. It was enacted with the goal of integrating and amending the existing laws on trade unions, to monitor the working conditions of industries, settling industrial disputes, and undertaking investigations.
The salient features of the Industrial relations Code, 2020 are mentioned below –
The threshold limit for the applicability of standing orders has been raised from 100 workers to 300 workers.
Every establishment having 20 or more workers is mandated to set up a Grievance Redressal Committee.
The Code also proposes the setting up of a 'Reskilling Fund' for retrenched employees.
There are timelines provided for strikes and lockouts with regard to the notice and its validity.
In industrial establishments, a trade union having 51% votes shall be recognised as the sole negotiating union which can make agreements with employers. However, in industrial establishments in which no trade union gets 51 % votes, a negotiating council of trade unions shall be constituted for making agreements with employer.
The Code also states that no person employed in an industrial establishment shall go on a strike without a 60-day notice period.
The following legislations have been consolidated under the Code –
Trade Unions Act, 1926 – the act is applicable to employer associations as well as trade unions. It involves matters concerning the formation process and registration of trade unions, constraints and advantages of registration, and safeguards available to union leaders in the course of undertaking union activities for a registered trade union.
Industrial Employment (Standing orders) Act, 1946 – the major cause of disputes in Indian industrial organisations was the lack of standing orders. The main aim of enacting the Industrial Employment (Standing orders) Act, 1946, was to overcome this problem. The Act makes it a mandate for the employers in industrial enterprises to specifically describe the working conditions for their workers. Moreover, the standing orders specify the requirements for recruitment, termination, any sort of disciplinary action, holidays and leaves etc. This ultimately, helps in reduction of disputes between the managements and its employees. The rules mentioned under this Act are applicable to industrial arrangements with 100 or more employees.
Industrial Disputes Act, 1947– the primary aim of this act is reduction in the disputes arising between the management and its employees in an industrial arrangement, along with providing the maximum level of assurance of delivering social and economic justice. The Act specifies the powers, duties and responsibilities of the Conciliation officers, Work Committees, Labour courts, Court of Inquiry and lays down the procedure to be followed by them.
Moreover it provides for the definition of a ‘workman’ under Section 2(s) of the Act as –
"workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person—
(i) who is subject to the Air Force Act, 1950 (45 of 1950 ), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957 ); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv)who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Concept of Moonlighting and Sunlighting
The term “Moonlighting” has evolved from Ireland in the year 1882. Moonlighting literally means taking up a different job without the present employer’s knowledge as a second source of income. The cases of moonlighting increased during the pandemic as the economic flow was disrupted and many employees were laid off due to financial crisis in the trade and commerce sector. A good example of moonlighting in the present world can be; a doctor or a design artist who not only works for a public organisation but also has a second source of income through private practise or freelancing projects. The IT sector has become a hub for moonlighting. Infamous IT Companies such as WIPRO, Infosys etc have even terminated employees on the account moonlighting. The main question is whether moonlighting can be accounted as a reasonable practise as enunciated under Article 19 (1) (g) of the Constitution of India, 1950?
Moonlighting hasn’t been defined specifically under Indian laws, although there are certain enactments referring to it. Furthermore, the notion of moonlighting though widely known and discussed in the trade sector hasn’t received a detailed and specific legal recognition in the enactments at length. In the landmark case of Niranjan Shankar Golikari v. Century Spinning and Mfg. Co. Ltd., the Hon’ble Supreme Court stated having considered the moonlighting clause in the agreement held that it was unlawful and unethical for an employee to moonlight while still working for a company.
Section 27- Agreement in restraint of trade, void of the Indian Contracts Act, 1872 talks about a non-compete clause in regular employer-employee agreements which prevent the employee from working outside the organisation or institute without the knowledge and/or permission of the employer during the course of employment. The Non-compete clause acts as a barrier between the employee and other third party organizations to secure a position for an employee who has been working for another employment establishment primarily and it prevents any breach of confidential information which is only accessible to the employee by default of his position in an organization or institute. The Agreement shall be considered to be void in case it imposes restrictions on employment practises beyond the duration of the primary employment. In the case of Indian Supreme Court in Superintendence Company of India (P) Ltd. V. Krishan Murgai, it was held that the service contracts which included a negative covenant restraining an employee from dual employment shall not be hit by Section 27 of the Indian Contracts Act, 1872 provided the negative covenant restrains the dual employment during the course of employment and not beyond that tenure. In addition to this, the court stated that “Wrongful dismissal is a repudiation of contract of service which relieves the employee of the restrictive covenant.”Other such exceptions which are not hit by Section 27 of the Indian Contracts Act, 1872 are clauses pertaining to Protection of Trade Secrets, Confidential Information/Non- Disclosure Agreements, Trade Combinations, Solus Agreements, Sale of Goodwill etc.
Section 60 - Restriction of double employment of the Factories Act, 1948 stipulates that the no worker who has already worked in a factory can be allowed to work in yet another factory on the same day. This Act also imposes a time bar in form of working hours per day to restrain a worker to employ with any other establishment on the same day or in the same week as that of the employer he works for.
Rule 17 (w): Disciplinary Action for Misconduct of Schedule I-A of the Industrial Employment (Standing Orders) Central Rules, 1946 states that the employee disclose any confidential information within his knowledge during the course of employment. As per Rule 8: Exclusive Service of Schedule I-B of the Industrial Employment (Standing Orders) Central Rules, 1946 which entails that a workman cannot do any act which goes against the employer’s interests and is subjected to work for the established industry solely.
Section 72: Penalty for Breach of Confidentiality and Privacy of the Information Technology Act, 2000 penalises the offence of disclosing confidential information of the employer or any information which goes against the employer’s establishment or his clients by imposing a fine which may extend up to Rupees 1, 00, 000/- and imprisonment for up to 2 years.
Code 28: Prohibition of Overlapping Shifts of Occupational Safety and Health Administration Code, 2020 specifies that no employee can work for any other establishment apart from his/her primary establishment by alternating shifts except in case the employee has obtained a prior approval from the Chief Inspector- cum-Facilitator for such an employment and this is applicable only to the factories. Code 30: Restriction on Double Employment in Factory and Mine of Occupational Safety and Health Administration Code, 2020 states that a worker shall be restricted from unfair practises such as dual employment while still working at a primary mine or factory for 12 hours.
Order No. 21: Secrecy of Model Standing Orders for the Service Sector, 2020 prohibits the employee from breaching the confidentiality clause and/or disclosing trade secrets of the employer. Order No. 22: Exclusive Service of Model Standing Orders for the Service Sector, 2020 incorporates a non-compete clause and strictly instils employment exclusivity until unless the employee has taken a prior permission from the employer to take up other jobs or assignments.
Remedies for Preventing Moonlighting
It is crystal clear from catena of judicial pronouncements that the “Employment Agreement” holds a special place while deciding whether an employee can indulge in dual employment. As far as the negative covenants of the agreement which restrain the employee from working with another organisation or establishment during the course of employment are concerned the law is settled on its enforceability and thus makes Non-Solicitation or Confidentiality Clauses/Agreements enforceable in the court of law to the extent of the tenure of employment. In furtherance of the same, certain clauses which act as a barrier for moonlighting are: Non – Compete Clause, Non-Solicitation Clause, Non-Poaching Clause and Confidentiality Clause (during the course of employment and the post the course of employment). The corporate sector has incorporated a new concept called “Garden Leaves” wherein the employer pays an incentive during the period of non-competing clause to restrain the employee from working against the interests of the industrial establishment.
Conclusion
The sphere of labour laws is dynamic, holding a special spot in the legal profession. It has particular components directed towards the employees. Nevertheless, only a minor population of the Indian workforce formally, falls under the national labour laws. Of this population, the application of labour laws in a real sense further remains restricted.
The integration of several labour laws into labour codes was an essential step in easing the compliance to such laws. Moreover, the increased expansion and, inclusion of the unorganized sector helps a larger section of the workforce to enjoy the benefits provided under the law.
In order to avail the option of moonlighting legally and ethically, our country shall adopt the concept of “Joint Employment” wherein an employee is permitted to work for more than one institute or organisation. The USA has framed laws in such a manner which establishes certain categories and the employee’s falling under such categories are do not fall under the ambit of Fair Labor Standards Act.
References
[1] Government of India; Ministry of Labour & Employment.
[2] Industrial Disputes Act, 1947.
[4] Niranjan Shankar Golikari v. Century Spinning and Mfg. Co. Ltd, (1967) 2 SCR 378
[5] Indian Supreme Court in Superintendence Company of India (P) Ltd. V. Krishan Murgai, (1981) 2 SCC 246
Written By
________, Intern Claww
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