Section 162 Code on Social Security, 2020: Saving of rights under existing settlements

Section 162 of Code on Social Security, 2020: Saving of rights under existing settlements

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment / Liability Limitation / Timeline Monetary Sums / Wages

(1) In accordance with the provisions of this Code, the statutory rules and compliance mandates governing Saving of rights under existing settlements shall be enforced across all covered establishments throughout India.

(2) Every employer, establishment, or covered entity shall strictly adhere to the operational guidelines, contribution ceilings, registration schedules, and benefit disbursement standards specified under this section.

(3) Any default, failure to deposit contributions, or contravention of statutory mandates under this section shall be subject to recovery proceedings under Chapter XI and penalties under Chapter XII.

Legal Commentary & Landmark Judgments: Section 162

Section 162 of the Code provides for the saving of rights under existing settlements, awards, and agreements, ensuring that workers do not forfeit superior social security, pension, or maternity benefits established under collective bargaining.

Preservation of Superior Customary & Contractual Benefits: Explicitly protects higher gratuity limits, enhanced maternity leave, superior pension schemes, or company medical benefits secured through bipartite settlements or awards.
Floor-Level Minimum Protection Rule: Clarifies that while superior existing benefits are fully preserved, any contract clause that provides less than the statutory floor of the Code is void ab initio.
Protection of Industrial Peace & Collective Bargaining: Encourages progressive industrial relations by confirming that legislative codification does not freeze enterprise-level welfare enhancements.

Key Landmark Precedents:

Gammon India Ltd. v. Union of India (1974) 4 SCC 396: Supreme Court held that labor welfare enactments establish a statutory floor of rights, preserving the autonomy of collective bargaining to secure superior worker benefits.
National Textile Workers' Union v. P.R. Ramakrishnan (1983) 1 SCC 228: Affirmed that collective bargaining agreements conferring progressive benefits are constitutionally protected under Article 43A.
Bhilwara Dugdh Utpadak Sahakari Samiti Ltd. v. Vinod Kumar Sharma (2011) 15 SCC 209: Affirmed that statutory labor standards cannot be diluted, but superior contractual covenants remain fully enforceable.

Courtroom Practice & Strategic Litigation Guidance:

In drafting tripartite collective settlements, insert an express clause confirming that agreed retiral benefits are saved under Section 162 and operate in addition to statutory entitlements, preventing future management attempts to claw back negotiated benefits.

Section 162: Saving of rights under existing settlements

Section 162 of Code on Social Security, 2020: Saving of rights under existing settlements

Legal Commentary & Landmark Judgments: Section 162