As States Go Slow On Framing Rules, Roll-Out Of Labour Codes May Take A While


The roll-out of the new labour codes in India may get pushed back due to a delay by state governments in framing their own sets of rules.

The new labour codes will “definitely” not be implemented from April 1, a person familiar with the matter said on condition of anonymity. The person cited a delay in framing of rules by states under the labour codes as a key reason. For now, the government will target implementing the new labour laws from May, this person said. However, the new target also looks difficult to meet as states will have to follow due process before finalising their rules.

A query sent to a Ministry of Labour and Employment spokesperson on Sunday evening didn’t elicit any response.

Till date, the governments of Uttar Pradesh, Madhya Pradesh, Karnataka, Bihar and Jammu and Kashmir have published some of the draft rules for public consultation. While J&K started publishing its draft rules in January, other states did this towards the end of February and in March.

Last year, Parliament approved four labour codes, one each on wages, industrial relations, occupational safety health and working conditions, and social security to usher in changes to India’s labour laws, some of which were framed during British rule. As many as 29 central labour laws have been subsumed into four codes.

Labour, as a subject, falls under the concurrent list of the Constitution wherein both the central and state governments can legislate. Under the new codes, state governments have the powers to make rules.

The central government had made the draft labour rules public for consultation in October-November 2020 and followed it up with a series of consultations with industry and trade union representatives. The ministry is yet to make final rules public.

To press the states to issue their labour rules expeditiously, the labour and employment ministry held a review meeting with the state governments on Thursday.

“We’ll wait for the central government’s notification (for implementing the codes). It was expected that it will implement it from April 1, but most states couldn’t finalise the rules. So, the government is extending time for implementation,” Suresh Chandra, principal secretary (labour) for Uttar Pradesh, told BloombergQuint over telephone. He said the state has made public draft rules under all codes, except for the one on occupational safety health and working conditions. “We need at least two months to finalise all the rules.”

Rajasthan Labour Secretary Niraj Kumar Pawan said the state’s labour department had sent the draft rules for the approval of the law department last month and they will be taken up by the state cabinet before being made public for consultation. He, however, didn’t give any timeline for final rules being framed.

Gujarat Additional Chief Secretary (labour and employment) Vipul Mittra said the state may publish some of the draft rules under the codes by the end of this month. However, a senior Gujarat government official said on the condition of anonymity the draft rules for occupational safety health and working conditions, and social security codes will be finalised only by next month.

The central government had planned to implement the four labour codes at one go from April 1, 2021.

Even after the states make their draft rules public, they will have to wait for public comments over a period of 30-45 days before finalising the norms.

“While the central government has taken the initiative, the states never really took it upon themselves to make the simultaneous changes and that’s particularly disappointing,” TeamLease Co-Founder and Executive Vice-President Rituparna Chakraborty said. She said though delayed implementation may come as a “short-term breather” for companies, which had complained of a new definition of wages impacting their employee costs, there are a “lot of other gains” that will take a hit.

We need to also see if the government has put in place adequate technology needed for implementing the new laws as a lot of activities, including licensing and return filing, will happen digitally under the codes, Chakraborty said.

The Code on Wages Act had become a law in August 2019. The new law ensures all workers in India receive minimum wages, as against 60% of the workforce at present. However, the central government had taken a conscious call of not implementing the law on a standalone basis. It wanted to implement all the codes at one go for uniformity. Parliament had in September 2020 passed the remaining three codes. However, the date of implementation was to be decided by the central government, which wanted the states to simultaneously frame their rules under the new laws.

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