Cabinet approve amalgamating 13 labour legislations

In order to keep the Government’s promise of amalgamating all labour legislations into 4 Codes, the union cabinet has approved the Code on Occupational Safety, Health and Working Conditions Bill, 2019 (“Code”), which intends to enhance the coverage of safety, health and working conditions provisions. It is proposed that the Code be applicable on all establishments having 10 or more employees. The Code also proposes to introduce a new web-based system whereby entities will need to file only 1 (One) annual return compared to the dozens that they need to make under the various labour legislations mentioned below. The intention behind the Code is to simplify, rationalize and amalgamate the provisions of 13 labour legislations, which will be repealed after the enactment of the Code. The legislations that will be repealed are:

(1)  The Factories Act, 1948;

(2)  The Mines Act, 1952;

(3)  The Dock Workers (Safety, Health and Welfare) Act, 1986;

(4)  The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996;

(5)  The Plantations Labour Act, 1951;

(6)  The Contract Labour (Regulation and Abolition) Act, 1970;

(7)  The Inter-State Migrant workmen (Regulation of Employment and Conditions of Service) Act, 1979;

(8)  The Working Journalist and other Newspaper Employees (Conditions of Service and Misc. Provision) Act, 1955;

(9)  The Working Journalist (Fixation of rates of wages) Act, 1958;

(10)  The Motor Transport Workers Act, 1961;

(11)  Sales Promotion Employees (Condition of Service) Act, 1976;

(12)  The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; and

(13)  The Cine Workers and Cinema Theatre Workers Act, 1981.

Quick View:

This Code is a one stop shop to address all questions regarding well-being of workers across multiple major sectors. The legislature has scrutinized and rationalized the provisions of the above mentioned legislations whilst drafting the Code, meaning that there will be uniformity in the safety, health, and working conditions of workers in across all sectors. It is a welcome move for labour reform to all the workforce.

Further, considering that archaic labour laws have been one of the primary obstacles behind India not being seen as a destination for investment, it is hoped that this step will go a long way removing such obstacles.

Kar HC upholds enforceability of the SARFEASI Act in certain cases

Despite the applicability of the Insolvency and Bankruptcy Code, 2016 (“IBC”), the Karnataka High Court (“Kar. HC”) in the case of Trishul Developers (“Petitioner”) v. L&T Housing Finance Ltd.  (“Respondent”) ordered that only a secured creditor can initiate action against the borrower under the Secularization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (“SARFESAI”), as the cause of action was initiated prior to the introduction of the IBC.  

Petitioner had borrowed money and received notices from the Respondents on default of payment. Respondents were not secured creditors. The Petitioners claimed that their loan is secured, and they possessed no intention to avoid payments of any legitimate dues. There was no valid demand notice issued by the Respondent due to procedural defects.

This order set aside an order passed by the Debt Recovery Appellate Tribunal (“DRAT”) which allowed the demand and possession notices issued by Respondent to the Petitioner on the ground that if there is a specified method prescribed under an Act, then that method is to be followed elsewhere.

Quick View:

This order brings in clarity as to the applicability of the IBC in the event that any cause of action has occurred prior to the introduction of the IBC. Therefore, this order brings in uniformity of approach and lays down that if any party defaults prior to the introduction of the IBC, then they might still be prosecuted under the SARFAESI Act and not the IBC. Therefore, the NCLT or the NCLAT will not have jurisdiction over such matters.


Non-Banking Financial Institutions are outside the purview of IBC: NCLAT

The National Company Law Appellate Tribunal (“NCLAT’”) in the case of Housing Development Finance Corporation Ltd. (“Appellant”) v. RHC Holding Pvt. Ltd. (“Respondent”) held that the Non-Banking Financial Corporation (“NBFC”) do not fall within the purview of Insolvency and Bankruptcy Code, 2016 (“IBC”). The Respondent being a NBFC was involved in a business of providing financial services, which is excluded from the scope of IBC.

The appeal was preferred against the order of National Company Law Tribunal in the same matter where it held that Respondent being an NBFC is out of the purview of the IBC. Appellant argued that since the Respondents do not provide any of the exempted financial service as described in the IBC, they should be brought under the application of IBC. However, the NCLAT held that the list of 9 exempted services are inclusive in nature and hence the Respondents are deemed to be an NBFC.

Quick View:

As per Section 3(7) of the IBC financial service providers are not included in the definition of corporate person, which means that they shall be outside the purview of IBC. The present case follows an earlier judgment of NCLAT, Randhiraj Thakur v. M/s Jindal Saxena Financial Services, the NCLAT had decided that NBFC will be outside the purview of IBC.


Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.