Centre May Notify Labour Codes In 4 Months

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The labour ministry may notify the labour codes in the next three-four months, paving way for their implementation as it expects over 15 states to be ready with rules in their domain by that time.

The implementation, however, could be partial as some of the provisions like the national floor-level minimum wage and gratuity payout could kick-in later, giving a breather to the employers to tide over the financial stress on their balance sheets due to the pandemic.

“Five states have notified rules across four codes and at least a dozen more are expected to notify soon,” a government official said. “The Centre is ready with rules in their domain and could notify all the rules across four codes in the next three-four months.”

So far, Uttar Pradesh, Madhya Pradesh, Uttarakhand and Punjab as well as Jammu & Kashmir have published draft rules for the codes while others are in different stages of finalising them.

The Centre had last month formed a committee to determine the national floor-level minimum wage with a term of three years, raising apprehensions that the provision of statutory minimum wage may get delayed. However, it later clarified that the committee is expected to submit its recommendations at the earliest.

The provision of statutory floor-level minimum wage would add to labour cost and would be binding on the employers. Likewise, the provision of gratuity based on the new wage definition, which caps allowances at 50% of the wages, could result in a higher payout by employers at the time of gratuity settlement.

The Centre wants to roll out the entire code in one go but there is a provision for notifying parts of the code, giving flexibility to the Centre to implement it in phases. The labour ministry has consolidated 29 central labour laws into four labour codes. These include the Code on Wages, the Code on Social Security, the Industrial Relations Code and the Occupational, Safety, Health and Working Condition Code.

The parliament had passed three out of four labour codes in 2020 and the Code on Wages in 2019, following which the labour ministry finalised the rules to implement the codes from April 2021. However, none of the states were prepared with rules in their domain, prompting the Centre to push the implementation of the codes to avoid a legal void.

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