Labour Code: Whittling down accidents covered by the ESI Act, 1948 ! Providing subsidy to employers !!


The (CPIO- Labour Law Reforms),

Ministry of Labour & Employment, New Delhi – 110001


Sub: Application under RTI Act – Draft Labour Code on Social Security & Welfare – details of the committee that drafted the Code and the omissions in Sec. 61 and inclusions in Sec. 22 – requested.
Ref: Memo No. No. Z-13025/ 13 /2015-LRC dated 16.03.2017 of the Ministry of Labour & Employment.


I invite your kind attention to the reference cited in which the Draft Labour Code on Social Security & Welfare was put on public domain on 16.03.2017,  in the website of  the Ministry of Labour and Employment, Government of India, New Delhi and request you to please furnish the following information under Sec. 6 of the Right to Information Act, 2005:

  1. Kindly intimate the designations of the officials who were entrusted with the work of preparation of the Draft Labour Code which has been communicated to the public by the Ministry of Labour & Employment, through the abovementioned letter dated 16.03.2017 (I do not want the names of those officials, if that information is considered to be a confidential one, while generally it is not so).
  2. Kindly intimate the names of the employers’ representatives or consultants who were roped in for preparing the said Code.
  3. Kindly intimate the names of the employees’ representatives who were roped in for preparing the said Code.
  4. Kindly supply the copy of the filenoting or any other record that would contain the justification (recorded by those persons who were entrusted with the work of preparing the aforesaid Draft Labour Code) for omission altogether, from the proposed Labour Code, of the provisions contained in 51-B, 51-C, 51-D and 51-E of the ESI Act, 1948, while Sec. 51-A of the ESI Act, 1948 has been inserted as Sec. 61.3 in the Code [Sec. 51-B deals with Accidents happening while acting in breach of regulations, etc. Sec. 51-C deals with Accidents happening while travelling in employer’s transport. Sec. 51-D deals with accidents happening while meeting emergency].
  5. Kinldy supply the copies of the filenotings or any other record of those who were involved in the process of preparing the said Code justifying the inclusion of phrases for providing “subsidy” to “the employer” under Sec. 22.6 (b) from the Welfare Funds by the State Board and to provide for “defraying the cost” of “provision of cost of transportation to and from work” for the employees under Sec. 22.6 (d) (vi).

I send herewith Postal Order for Rs. 10 being the fee payable under the RTI Act, drawn in favour of the PAO(MS), Ministry of Labour & Employment, New Delhi.


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Labour Code: The fine art of poor-bashing ! – Part 1

“In short, there are myriad things you can to challenge poor-bashing. Every time you do it, you’re working on cutting edge of a larger movement that’s struggling for justice for people who are poor”

– Jean Swanson – Page 184 –
Poor bashing: The politics of exclusion


First World War took place, because of the ignorance of the rulers of various nations of the world of the importance of taking care of the legitimate needs of the working population around the world. The political rulers went after money-bags and ran the nations to suit the requirements of the businessmen, obviously for the quid pro quo. The gap between the rich and poor widened so greatly that the simmering anger provided the base for social and political unrest.

The result was the World War I. Nothing further is needed to testify to this basic reason for the WW I, than the very Charter of the International Labour Organisation (The preamble of the Constitution of the ILO) founded in 1919.

The Charter declares to the world, that “universal and lasting peace can be established only if it is based upon social justice”. It reiterates that “the peace and harmony of the world are imperilled when the conditions of labour exist involving such injustice, hardship and privation to large numbers of people”. Proper labour laws alone would secure the “permanent peace of the world”, as identified by the ILO.

ILO Charter

1% cornered 53% nation’s wealth 

But, the Indian politicians do not care. They are unabashedly placing the entire government machinery at the feet of the ultra-rich businessmen. These politicians do not care to explain to the people, nor do they care to ponder over for themselves, how and why the top 1% of the  richest own, as on 14.10.2015, 53% of the country’s wealth. These politicians do not also care how the share of “the poorer half of the population” in the nation’s wealth declined to 4.1% from 5.3% during 2000 and 2015.

The Indian politicians are controlled and managed (or, to put it better, employed) by the ultra-rich businessmen to do their biddings. And, the politicians are happy to be so, happy to remain the slaves of those masters in business.  Corporate financing is all about the eagerness of the politicians to be in politics in India. We do not see David Cameroons shifting their own personal effects, after being in power as Prime Minister. Our politicians do not care for the pains of the poor.

Cameroon vacating

David Cameroon

These politicians believe that the masses do not count for anything and that they can fool the masses, at any time, and poll their votes. And, in order to aid such politicians in fooling the people, large business firms have ventured into the media business too, even through “hostile take-overs” of visual and print media. These ultra-rich businessmen use their media-power to manipulate public opinion to promote the image of their slaves in politics. The politicians and the b


Ernest Bevin

usinessmen are happy with this kind of reciprocal arrangement between themselves. And that is the cause of all the troubles of the poor. But, the sufferings of the poor is immaterial for these two players who go about their single-minded pursuit only of profit and money for themselves.

In the aftermath of the World War II, Ernest Bevin, the UK Labour Minister stressed, while addressing businessmen, on the need for providing basic economic security to create fairer conditions of living for the working population also. “If profit can be the only motive, the natural corollary is economic disorder, and economic disorder will bring you back to the same position you are in now, ever recurring, and future generations will again pay, in the same form or another, the bitter price we are paying now…” he said.

In the year 1944, the in its 26th session, the ILO which met at Philadelphia had examined the issue and reiterated the same fact. The ILO  warned the entire world against exploitation of the poor by the rich.

Labour CodeThe Declaration of Philadelphia had also said that the principles set forth in that declaration was “fully applicable to all people everywhere” and its observance or otherwise in any nation is “a matter of concern to the whole civilised world”.

The present Labour Code brought out by the Government of India is totally loaded against the poor. It, simply, treats labour as a commodity and helps only the ultra-rich to exploit whatever money the poor do have.

Some of the apparent defects of the Code are:

1. It drastically reduces the disablement benefits.
2. It confers unfettered power on the Executive to decide the quantum of Sickness Benefits.
3. The Extended Medical Benefit and Extended Sickness Benefit, for which the ESIC is famous for, has been removed from the Social Security scene in toto. ESIC pays  While the ESIC gives medical benefit and pays cash benefit too, for about two years and 309 days respectively after the contribution ceases to be payable for the insured persons suffering from various long term diseases as per Reg. 103-A, the proposed Code is totally silent on the issue.
4. Representation of the employers and employees in the decision-making bodies has been so reduced that it makes a mockery of the Council which is projected to be a tripartite body.
5. In the name of extending the facility to homeworkers, the Code makes every householder an employer, who will be subjected to inspection and also prosecution.
6. Enabling politicians in power to exempt almost any and every entity from coverage, by removing the word “substantially” from Sec. 94 of the Code.
7. Enabling the politicians in power to prescribe for themselves the power to impose penalty on the employers.
8. Entertaining notions to hand over the social security arena to private money bags and attempting to reduce the benefits payable and paid to the workforce by the ESI Act, at present.
9. etc., etc.,

 “India performed poorly in social security” – ILO

Already, the ILO has, in November 2010, had blasted India for its notorious informal labour practices. “India has performed poorly in providing social security protection to its people until recently with ‘very high vulnerability’ to poverty and informal labour practices in the world, according to a report released by the International Labour Office (ILO) today” Times of India – 16.11.2010. In its first comprehensive ‘World Social Security Report’, the ILO has suggested that India has not done enough in the arena of social security protection, which is reckoned as the “human face of globalisation, in line with its fiscal status”.
In fact,  the only thing that the proposed Labour Code can be made use of is to use it to demonstrate before the world how a Welfare Law should not be made.

ESI Act, gives effect to Universal Declaration of Human Rights

Art. 22 of the Universal Declaration of Human Rights says, “Everyone, as a member of society, has the right to social security”. The High Court of Madras has said, “the object of the (ESI) Act is … to give effect to Art. 1 of the Universal Declaration of Human Rights, 1948, which assures human sensitivity of moral  responsibility of every State that all human beings are born free and equal in dignity and rights” (C. Indira Vs. Senthil & Co. – 2009 (2) LLN. 302).  The same court has said of the ESI Act, that “the object of the legislation is to protect the weaker section with a view to do social justice” (Chandramathi Vs. ESIC – 2003 (4) LLN. 1143).

ESI Act, for a new social order with corrective and distributive justice.

Distributive justice which is essential to achieve social and economic democracy has been made available to the citizens of all the civilized nations only through social security schemes. It is only the nations, which implement the social security schemes, which top the list of International Human Development Index.  Hon’ble Supreme Court has, in Samatha Vs. State of Andhra Pradesh (1997) 8 SCC 191 (Para 75), observed that “The core constitutional objective of ‘social and economic democracy’ in other words, just social order, cannot be established without removing the inequalities in income and making endeavour to eliminate inequalities in status through the rule of law. The mandate for social and economic retransformation requires that the material resources or their ownership and control should be so distributed as to subserve the common good. A new social order, therefore, would emerge, out of the old unequal or hierarchical social order. The legislative or executive measures, therefore, should be necessary for the reconstruction of the unequal social order by corrective and distributive justice through the rule of law”.

Let the rulers heed to Art. 41 and Art. 42

Art. 41 of the Constitution of India says that “The State shall, within the limits of its economic capacity and development, make effective provision for securing the right ….. to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want”. The Constitution thus, gives direction to the State that in cases of Sickness, disablement and in other cases of undeserved want, the State is to provide “public assistance”. The State cannot, therefore, make provisions for “private assistance” and absolve itself of its Constitutional responsibility.

Inequalty costA BBC study revealed that inequality is the basis of so many social problems. ESIC is an effective instrument in the hands of governments in India to prevent the problems that arise due to inequality.  Let the rulers listen to the sage advice of  Prof. Adharkar, the Father of Social Security in India, and follow the 8 Fundamental Principles laid down by him and fulfil his 4 Assumptions to make Social Security in India real and really beneficial..



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Labour Code: Plea for publicising Draft Rules, Regulations, Schemes & License !



The CPIO (Labour Law Reforms),

Ministry of Labour & Employment,

New Delhi – 110001

Sub: Application under RTI Act – Draft Labour Code on Social Security & Welfare – copies of Rules, Regulatios and Schemes – requested.
Ref: Memo No. No. Z-13025/ 13 /2015-LRC dated 16.03.2017 of the Ministry of Labour & Employment.


I invite your kind attention to the reference cited in which the Draft Labour Code on Social Security & Welfare was put on public domain on 16.03.2017,  in the website of  the Ministry of Labour and Employment, Government of India, New Delhi. The Draft Labour Code published is not an all-inclusive document and there are many grey areas. As the nature and the quantum of various benefits (except the Disablement Benefits and Dependants Benefits) have not been specified in the Code/ Act itself, the relevant subordinate legislations (the Schemes, Rules and Regulations including licenses and essential formats) should be put in the public domain along with the Code. But, it has not been done so.

  1. I, therefore, request you to kindly furnish the following information under Sec. 6 of the Right to Information Act, 2005 or put them in public domain in the website of the Ministry along with the Draft Labour Code concerned.
  • Kindly supply the copies of the format of the proposed License (containing the Terms and conditions imposed by the Government on the agencies) referred to in Sec. 88 and 89 of the said Draft Labour Code on Social Security & Welfare;
  • Kindly supply the copies of the proposesd Regulations and the Schemes referred to in Sec. 24 of the said Draft Labour Code on Social Security & Welfare.
  1. I have to state that although it is not necessary to provide, the reason why a citizen asks for certain information as per the RTI Act, 2995, I feel that the facts narrated in the Appendix would facilitate the authorities to supply the information requested for besides highlighting the extent of public interest involved in making the contents of the aforesaid documents public.
  2. I send herewith Postal Order for Rs. 10 being the fee payable under the RTI Act, drawn in favour of the PAO(MS), Ministry of Labour & Employment, New Delhi.

Yours faithfully,

Encl: Appendix and Postal Order



Facts that necessitate seeking information regarding the proposed Subordinate Legislations, the Rules, the Regulations (including the license formats) and the Schemes

The Act of 1948 Vs. The Code of 2017:

1. When the ESI Act was enacted in the year 1948, it was venturing into a new area. So, the Act itself assured the people, through its Sec. 46, of the five major kinds of benefits and also the quantum of those benefits that would be made available through the enactment. It was later, in the year 1989, that the quantum of benefits, quantum of contribution and wage limit  were taken to the Rules to facilitate easy revisions. When, the present piece of legislation, the proposed Labour Code, is intended to replace the existing social security machinery, people become apprehensive and want to know whether they stand to gain or lose by that new system.

2. The Executive, therefore, cannot bring in a truncated version of the proposed system in the form of Code and ask the MPs to vote. But, that, exactly, is what the bureaucracy has, exactly, done through this Draft Labour Code. Sec. 24.5 of the Code enumerates the nomenclature of the benefits that would be made available to the workforce. But, the quantum of benefits and the nature of machinery through which such benefits would be provided have not been made known. These issues have been kept reserved for the Executive to make Subordinate Legislations later.

3. But, in all probability, the draft subordinate legislations, (a) the Rules, (b) the Regulations including the termns of conditions of license and (c) the Schemes would, already, have been prepared and kept in the Ministry. The non-publication of those drafts along with the Draft Code, for public debate gives the bona fide impression that the forces which are behind  this move, want to hide many vital aspects of the proposed social security system away from public knowledge until they get the Code passed by the Parliament and acquire power to do whatever they want through Subordinate Legislation. Or, i.e., if they have not yet prepared those draft Rules, draft Regulations, draft Schemes and draft licences, it would imply that these forces want to destabilise the present social security structure and bring in something which is not known even to themselves.

A service organisation is converted into business organisation:

4. I submit that the ESI Corporation is not a business organisation preparing profit and loss account. It is a service organisation preparing income and expenditure statement. But, the very wordings of Sections 2.58, 2.68, 2.101, 2.109, 2.123 and Sec. 88. show that the intention behind the Code is to handover the operative side of the scheme to private businessmen who enter into the field with profit motive.

5. Sec. 88.1 of the Code says that the “Director General may, by granting a License under this Code, permit any organization or person to act as an intermediate agency for all or any of the purposes” mentioned against each of the six agencies enumerated therein. Those agencies are: (a) Fund Manager Agency, (b) Point of Presence Agency, (c) Service Delivery Agency, (d) Benefit Disbursement Agency, (e) Record Keeping Agency and (f) Facilitation Agencies.

6. Sec, 88.3 of the Code says that “an intermediate agency shall function in accordance with the terms of its License and the Regulations”. Sec. 88.4 implies that the terms and conditions of such a license will be “in accordance with the provisions of this Code and the Regulations”.  Sec. 88. 5 says that the application for such a license will be in a specified form.

7. So, the public must be informed of the concept and intricacies of these Agencies-system, and the contents of the Schemes proposed on all the Social Security benefitis. Because, that alone would provide a holistic view of the ‘reforms’ proposed. Because, that alone would make the people know about the real and consequential effect of the proposed Code.

“Obamacare” was allowed threadbare discussion for three years:

8. There cannot be meaningful public debate when all the draft subordinate legislations are not placed before the public. In the USA, when the Obamacare was introdued in 2009 and made law on 23.03.2010, through the Patient Protection and Affordable Care Act (ACA), there had been extensive public debate over it for more than three years  (from 2009 to 2012) before it was enforced after the Supreme Court upheld it on June 28, 2012.

9. It is essential for the Executive to place in public domain a comprehensive Bill covering all aspects of the subject-matter, including the proposed Schemes, Rules  (that would be framed by the Government)  and the tentative Regulations  (that would be framed by the National Council) with reference to the aforesaid Sec. 24.5 to explain the quantum of benefits made available to the workforce and the manner in which the delivery machinery would function.

10. Please therefore, supply the information requested for in Para 2 of the Applicaton either individually to me or by hosting all of them in the website of the Ministry.

11. In the context, I think it appropriate to bring on record the observations of C.K. Allen, in his book Law and Order, (1945). He agrees with the universal fact that Subordinate legislations provide for convenience, flexibility and efficiency with respect to the delegation of such powers. But, he says, that all these arguments regarding convenience, flexibility and efficiency are “sound arguments for delegation within due limits, the kind, in fact, which has always been recognized as a practical and necessary part of our governmental system. But they become unsound and dangerous if they are used to justify the indefinite extension of executive powers. Speed and efficiency may be bought at too high a price, and indeed we should have learned from many examples that the State which makes efficiency its highest god is very apt to become an all-devouring monster.

Apparent defects indicative of unseemly hurry:

12. Apparent defects of various kinds in numerous places in the Bill show unseemly hurry on the part of the authorities to bring out this Draft Code. Besides, the fundamental flaw with this Draft Labour Code is that the Government of India, is trying to make provisions for “private assistance” and absolve itself of its Constitutional responsibility of providing “public assistance” as mandated as per Art. 41 of the Constitution of India.

13. ESI Act is a great provision aimed at rendering distributive justice to the people of the nation. But, that is attempted to be belittled by this Labour Code. Hon’ble High Court of Madras has, in ESIC Vs. S. Savithri 2003 (3) LLJ 250, observed that “The Scheme of the (ESI) Act, Rules and Regulations spelled out that the insurance covered under the Act is distinct and differs from the contract of insurance in general….The Division Bench of the Madras High Court observed that the Act in fact tries to attain the goal of socio-economic justice enshrined in the Directive Principles of State Policy”.

14. Even The Hindu conceded editorially on 01.01.2005 that “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honorable exceptions, to operate health care systems for their workforce”

Fundamental Principles laid down by Prof. Adharkar:

15. Prof.Adharkar, the Father of Social Security in India, had laid down the following as Fundamental Principles, when  a scheme on social security is introduced;

(a). The proposed scheme must not be too ambitious in the  beginning;

(b). It must be simple, clear and straightforward,

(c). It must be financially sound, economical in working and actuarially balanced;

(d). It must minimize disputes and litigation;

(e). It must be workable in the peculiar circumstances of Indian labour and industry;

But, the proposed Labour Code ignores all these principles, which necessitate one to go through the proposed Subordinate Legislations also before arriving at an opinion whether the proposed changes would be an all-encampassing one, workable really  and beneficial to the workforce.

ESI Act itself has the potential for coverage of even homeworkers:

16. The importance of the ESI Scheme to a nation would become evident from this observation. The Act provides security-net to the working population in the organised sector and its long-term goal, as spelt out in Sec. 1 (5) of the Act is to extend the security-net not only to the factories but also to the establishments, industrial, commercial, agricultural or otherwise.

Public Interest and the RTI Act:

17. I submit that I am asking only for the information to which I am entitle to ask as a citizen of the nation. This information asked for by me in para 2 supra is  required in public interest. Hon’ble High Court of Madras has observed, “Public Interest means an act beneficial to the general public. Means of concern or advantage to the public, should be the test. Public interest in relation to public administration, includes honest discharge of services of those engaged in public duty. To ensure proper discharge of public functions and the duties, and for the purpose of maintaining transparency, it is always open to a person interested to seek for information under the Right to Information Act, 2005” (The Registrar, Thiyagarajar College of Engineering, Madurai Vs. The Registrar, Tamilnadu Information Commission – 30.04.2013).

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Labour Code: The term “Substantial” left out of exemption provisions !


The CPIO- (Labour Law Reforms) RTI,

Ministry of Labour & Employment,

Room No. 14, Shram Shakti Bhavan,

New Delhi – 110001


Sub: Application under Sec. 6 of the RTI Act – Omission of the word ‘Substantial’ in Sec. 94.1 (h) of Draft Labour Code on Social Security & Welfare – information – requested.
Ref: Memo No. No. Z-13025/ 13 /2015-LRC dated 16.03.2017



I have to state that Sec. 94. 1 (h) of the Draft Labour Code made public on 16.03.2017, as per the reference cited, shows that the authorities who prepared the draft Code had taken a conscious, deliberate and calculated decision to drop the word “substantially” before the word “similar” appearing therein.


  1. This is in sharp contrast to the existing conditions imposed on the employers who seek exemption from coverage under the ESI Act, as could be seen from the proviso to Sec. 87 of the ESI Act, 1948, which is reproduced below:

“Provided that such exemptions may be granted only if the employees’ in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.”


  1. 90 of the ESI Act, which also deals with the concept of Exemptions, contains the phrase “substantially” similar”. Besides, the proviso to Sec.1(4) which deals with the exemption of the factories and establishments belonging to or under the control of the Government, also insists of the condition of the benefits being “substantially” similar or superior.
  2. The term “substantial” can have a qualitative meaning and be defined as “important” or “essential”, and can have a quantitative meaning and be defined as “considerable in quantity” or “significantly great” in amount. This word precludes invoking the ‘de minimis’ (Page 812 – Concise Law Dictionary – Wadhwa Publication).
  3. Yet, such an important word has, consciously, been left out in Sec. 94 of the Draft Labour Code in ‘Part L’ which deals with exemption. There must, therefore, have been strong justification recorded in writing by the officers or the committee of experts who had drafted this Sec. 94 of the Draft Labour Code concerned.
  4. I, therefore, request you to kindly supply the following information under Sec. 6 of the Right to Information Act, 2005:

Kindly supply the relevant pages of the ‘filenoting’ / ‘office note’ / ‘report of the committee of experts’ / ‘report of the of officers’ in which such an explanation justifying their suggestion to drop the word ‘substantial’ in Sec. 94 in ‘Part L’ of the Code is found recorded.

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Labour Code: Letter No. 7 – Drastic reduction in DB, PDB & TDB !

Quantum of Dependant’s Benefit has been drastically reduced in the Labour Code, when compared with what is available now under the ESI Act, 1948. [even after making allowances due to the definition of the term ‘benefit wage’ under Sec.2.12 of the Code with reference to the ‘Standard Benefit Rate’ as per Rule 2 (7-A) of the ESI (Central) Rules, 1950.] Likewise, the Permanent Disablement Benefit and Temporary Disablement Benefit  too.

This is unfair. This becomes unlawful too, when the solemn assurance given to the persons already covered under the ESI Act is snatched away and only the assurance of reduced benefit is attempted to be given, and that too, unnecessarily,  through the present Labour Code, in the event of death of the employees due to employment injury.

Please click on the image for more:

Letter 7 image

Letter 7


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Labour Code: Letter No. 6 – Insignificant representation of employers and employees in the National Council !

The proposed National Council deserves larger representation from a wider spectrum of the employers and employees throughout the nation permitted in the supreme body. It is, therefore, suggested that the draft Labour Code may be modified to facilitate inclusion of, at least, 15 representatives for employers and 15 for employees. Because, the proposed Code amalgamates so many government and government oriented-organisations, including the two major organisations, the ESIC and the EPFO, where ten representatives on either side were in the respective supreme governing bodies.

The parties in power at the Centre should not give the impression that they are afraid of facing the representatives of the people by reducing their representation in the proposed National Council. It is, therefore, proposed that the National Council may be made to have 15 employers’ representatives and 15 employees’ representatives.

Click on the image below for more:

Letter 6 on Labour Code Page 2

Letter 6 

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Labour Code: Letter No. 5 – Rule-making power of the State Governments !

Powers of the State Governments must be listed in an independent Section just like Sec. 165 which deals with the Powers of Central Government to make Rules.

Secondly, all the areas with reference to which powers must be conferred on the State Government must be enumerated, in a thoroughly exhaustive manner in the Code / Act itself.

Click on the image please for the contents !

Letter 5 for publishing

Letter 5 

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Labour Code: Letter No. 4 – Penalties through Subordinate Legislations !

Penalties, if any, which can be prescribed by the Executive through Subordinate Legislation, can, at best, be less than and within the limit of the penalty, already provided for by the Parliamentary legislation. The upper cap must be provided for in the Act itself by the Parliament. There should be no scope for delegated powers on penalties to traverse beyond the Act and extend to new areas. But, the proposed Sec. 165.2 (liv) and Sec.166.2 (xxxv) do not adhere to these norms in law-making. The proposed Act / Code confers unlimited jurisdiction to the Executive in imposing penalties and traverses beyond Sec.156 and the Sixth Schedule.

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Letter 4 for publishing Page 2


Letter 4 

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Labour Code: Letter No. 3 – Employers in National Council !

Please click on the following link

Letter 3

The kind and immediate response from the Ministry on 30.03.2017 shows that this was only a drafting or typing mistake and that it would be set right.

The issue need not, therefore, be raised again by readers who might have noticed the defect on their own.


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Labour Code: Letter No. 2 – Definitions incomplete !

Please click on the following link

Letter 2 

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