Labour laws were enacted to protect the interest of labour, one of the factors of production projected by the father of economics Adam Smith. Throughout the course of Industrial Revolution the litigation mechanism revolves around labor has evolved as molasses grew in January. Reforms in labour laws proceeded with snail speed and length because interest of multiple stakeholders were not interwoven into a simple fabric. Stakeholders like labourer with individual interests, government with constitutional obligations, shareholders with ROI, and trade unions with
Slight changes in the barometer of labor reforms affect the masses hence, it becomes tougher to bring reforms into labour laws. Any slight changes seem to be pro for any of the stakeholders. It require mammoth efforts to bring reform in labour sector. There is and was resistance from various stakeholders when it comes to putting up some reforms in place.
At this juncture, India is about to bring labour reforms in the form of codes. The existing 29 labour laws would be repealed in order to form simplify labour legislature in India. These codes are The Code on Wages 2019, Occupational, Safety, Health and Working Conditions Code 2020, The Industrial Relation Code 2020, The Code on Social Security 2020. I was doing commentary on labour reforms and one of the interesting thing came across the read was the Compounding of offenses.
The compounding of Offences has been well defined in section 320 of CrPC Criminal Procedure Code, 1973. It has simplified the list of compoundable and non-compoundable offenses. In general, Compounding of offenses refers to the process of settling a criminal case by paying a certain amount of money, usually a fraction of the maximum fine prescribed for the offense. The compounding of offenses is often allowed for minor offenses or first-time offenses, and it helps to
In essence, it means:
- Settling a case out of court
- Paying a fine to avoid prosecution
- Compromising on the punishment
- Avoiding a criminal trial
Benefits of compounding offenses
- Reduce the burden on the courts.
- Save time and resources.
- Provide an opportunity for the accused to avoid a criminal record.
- Offer a chance for rehabilitation.
First time in the Indian Labour Legislature, the Compounding of offenses has been inducted in these latest reforms.
In all four Labour Codes, if an offense is punishable with only a fine, or with a fine and another penalty (like compensation or restitution), it may be eligible for compounding. However, if an offense is punishable with imprisonment only, or with imprisonment more than years and a fine more than 30000/- to 2000000/-. second offense within 3 or 5 years are not eligible for compounding.
Section 56 of the Code on Wages, Section 138 of the Code on Social Security, Sections 114 & 167 of the Occupational Safety and Health Code, and Section 89 of the Industrial Relations Code deal with the provisions relating to compounding of offenses.
|
Under
the new Labour Codes |
|
|
Compoundable
Offences |
First Instance: Offences punishable with –
Fine of INR 50,000/- to INR 10,00,000/- |
|
Non-Compoundable Offences |
Second
or Subsequent Offence: Offences punishable with – Fine of INR 3,00,000/- to
INR 20,00,000/- or imprisonment of up to 3 years. |
|
|
Wage Code |
SS Code |
OSH Code |
IR Code |
|
Compounding
Fees/Charges |
A sum
of 50% of the maximum fine provided for such offence, in the prescribed
manner. |
A sum
of 50% of the maximum fine in case offence punishable only with fine and 75%
of the maximum fine in case offence punishable with fine and imprisonment
less than 1 year. |
A sum
of 50% of the maximum fine in case offence punishable only with fine and 75%
of the maximum fine in case offence punishable with fine and imprisonment
less than 1 year. |
A sum
of 50% of the maximum fine in case offence punishable only with fine and 75%
of the maximum fine in case offence punishable with fine and imprisonment
less than 1 year |
Compounding of an offence gives an employer one unique opportunity to rectify non-compliance in the first instance without having to pay hefty penalties as prescribed and the specified offences can be compounded by a notified Gazetted Officer. It is only in the second or subsequent offence the penalty and penal provisions will be applicable. The amount of fines for contraventions has been significantly increased under the different Codes and to rebut this introduction of a high quantum of fines or penulties, the provision of compounding has been introduced. with this hopes employers may treat this contravention as mistakes to rectify not lead to offences.
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