Over five years after the Centre first undertook to alter the labour laws in the country, streamlining all labour related laws under four Codes, the government is yet to notify them.
A senior government official told Moneycontrol that there is no immediate need to notify the four Labour Codes introduced in 2019-2020 as most states and union territories (UTs) have already made the necessary changes in their respective state laws.
“Around 30 states/UTs have published the draft rules in line with the four Codes, and most (about 20) have implemented those changes,” the official said. “The Central government doesn’t need to notify the codes for the changes (in laws) to be implemented.”
Labour laws fall under the Concurrent List of the Constitution, which means both the Centre and the states have the right to frame rules. However, in case of conflict between central and state laws, the central legislation typically prevails—unless the state law has received presidential assent, in which case it can take precedence.
In 2019–20, the Narendra Modi-led government undertook a significant legislative reform to streamline the country’s labour laws. A total of 29 labour-related Acts were consolidated into four comprehensive Labour Codes. The aim was to promote trade and investment, enhance ease of doing business, reduce compliance burdens, support decriminalisation, address skill development needs, and improve mechanisms for dispute resolution.
The four codes are: Code on Social Security 2020; Occupational Safety, Health and Working Conditions Code 2020; Industrial Relations Code 2020; and Code on Wages 2019.
Other sources say the Centre is unwilling to notify the Codes as labour unions are asking for a thorough review of the laws, with some demanding a total repeal. The unions feel that the four Codes are employer-friendly and would snatch away their rights and those of the workers.
In March, a convention of various Central Trade Unions (CTUs) had observed a one-day strike against the Labour Codes. In a press-note they had said: “The CTUs take it (labour Codes) as a serious challenge to the basic rights of workers relating to defined working conditions, including working hours, minimum wages, social security, etc., and also their collective rights to unionisation, recognition, collective bargaining, agitation, and any form of collective expression of protest, including the right to strike, together with atrocious and vindictive punitive measures against any collective dissent by workers.”
“We want the labour unions to be on-board with the Codes, we are holding consultations. Once we feel the CTUs have understood the spirit of the Codes, the Centre will notify,” another official said.
Meanwhile, around 20 states/UTs have executed the changes in relation to fixed term employment, compounding of offences, increased overtime hours up to 125 hours in one quarter, allowing women to work night shifts, increased threshold for number of workers for coverage under the Factories Act, increased threshold for layoff/closure and so on.
While many have made progress, a few—including West Bengal, Meghalaya, Nagaland, Sikkim, and the Andaman & Nicobar Islands—remain behind schedule in finalising their draft rules, said a source.
As per the legislative framework, the role of the Central Government is to frame the Labour Codes, draft and notify model rules or Central rules under each Code. The role of the State Governments is to frame their own rules under these Labour Codes, either based on the model rules or adapted to state-specific requirements and to notify these rules to operationalise the Codes within their respective jurisdictions, Amit Kumar Nag, partner, AQUILAW, said. “Both Central and State rules are essential for the effective and full implementation of the Labour Codes,” he said.
Experts say the labour reforms are designed to simplify compliance, improve working conditions, and extend key benefits such as EPF, EPS, and medical coverage to workers in both the organised and unorganised sectors.
Adil Ladha, Partner, Saraf and Partners said that while a comprehensive, state-by-state list showing full implementation of all reforms under the four Labour Codes is not readily available, several states have shown measurable progress either by integrating with the Shram-Suvidha Portal or by pre-publishing draft rules for specific codes.
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