With the rollout of the labour codes getting delayed due to the pandemic, renewed deliberations are underway at the highest levels of government on a fresh implementation schedule, amid divergent views on whether to push through all four codes simultaneously or opt for the more practical option of staggering them.
With most of the states ready with draft rules, the view in the Labour Ministry is converging towards a “one-go” or simultaneous implementation of all four codes, said a senior government official, even as there are concerns about the timing of the rollout. While early-2023 is being considered a feasible option, the fact that it cuts too close to the 2024 general elections and the possible spillover impact of the farm laws’ debacle is a concern.
The streamlining of labour laws has been a work in progress, with the Centre notifying four broad labour codes to replace 29 sets of labour laws: The Code on Wages, 2019; The Industrial Relations Code, 2020; The Code on Social Security, 2020; and The Occupational Safety, Health and Working Conditions Code, 2020.
Some of the key features of the proposed labour codes include bringing in a national minimum wage, widening of coverage of social security to cover informal and gig/ platform workers, providing greater flexibility to employers in hiring decisions without government permission by raising the threshold for requirement of a standing order – rules of conduct for workmen employed in industrial establishments – from 100 workers to 300 workers.
With labour being a concurrent subject, both the Centre and states have to frame laws and rules. While Parliament cleared the four labour codes in 2020, and the Centre pre-published the draft rules for all four codes, some state governments are yet to complete the process.
In the states where the draft rules are pending, most are related to The Code on Social Security and The Occupational Safety, Health and Working Conditions Code. In West Bengal, draft rules are pending for all four labour codes; in Rajasthan, draft rules are pending for three labour codes. Andhra Pradesh, Meghalaya and Nagaland are among the other states where the draft rules are pending.
Since last year, however, states have made considerable progress in drafting rules. “That time, only 10-11 states had drafted rules for the labour codes; now 30 states have completed for Wage Code, 26 for Industrial Relations and 24 each for Occupational Safety, Health and Working Conditions and Social Security Code. Since it’s a concurrent subject, states have to do their share, one cannot force it. Then it won’t get implemented properly. Industry and union representatives have also been asked to convey their feedback on the draft rules in states, so that proper consultations happen at this stage,” said the official.
“It was deliberated whether it should be implemented phase-wise. A part of the discussion was that the Wage Code and the Social Security Code could be brought first, but then it was felt that if the remaining two are not brought in simultaneously, their turn may not come. The sense within the government was whether it should be staggered, but the main concern was that this may pave the way for only two codes, and not result in the rollout of the other two. It has to be wholesome, for both workers and the industry,” said the official.
The government is learnt to have held discussions with trade unions and industry representatives to ascertain the difficulties expected from the proposed rollout of the labour codes. During the discussions, it was pointed out that the Centre may have missed the “ideal time” for rollout – in 2019, the first year of the second term of the BJP-led government. “The first year of the rollout is better. We missed out on that opportunity in 2019. Then Covid happened unfortunately. So it got delayed, although work had begun much earlier in 2017,” said the official.
Some trade unions are also learnt to have approached the government for further consultations on some issues, which are likely to be considered by the government. “Due process has been followed. The Standing Labour Committee had cleared it. But still, if there are some issues which they wish to highlight, they are being heard on those,” said the official.
The government had earlier considered implementing the labour codes early last year with an expected deadline of April 1, although this was not formally announced. But the implementation took a backseat as states were still drafting rules, and there was also the fallout of the pushback on the farm laws. After the government announced repeal of the proposed amendments in farm laws in November last year, trade unions also appealed for a rollback of the labour codes.