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All states, UTs except four are ready with draft rules to roll out labour codes

The labour codes are expected to introduce far-reaching changes with implications for employers and workers. They will offer greater flexibility in rolling out short-term work contracts, make hiring and firing flexible, and make industrial strikes harder.

New Delhi / April 27, 2022 / 07:27 PM IST
Representative image.

Representative image.

Moving a step closer to rolling out the four crucial labour codes, the Union government on April 27 said that all states and union territories except four have come on board and pre-published draft rules.

A few of the northeastern states are yet to come on board, and West Bengal too is yet to pre-publish rules of some of the codes that will have a major impact in a gamut of segments – from wage definition to take-home pay, from national minimum wage floor to fixed-term employment, ease in hiring and firing, and social security for gig workers.

“We believe that everyone should be on board. We are talking to take the last four on board. The work at the national level is done, and once every state is on the same page, we shall be able to roll out the four codes,” said a top government official, requesting anonymity.

“These are structural reforms and we wish to balance labour welfare on one hand and ease of doing business on the other. The labour ministry is talking to states almost every month on this and convincing them to fast-track the process. Things have progressed well in the past four months,” said a second senior government official with direct knowledge of the development.

By end of 2021, while 24 states and UTs had framed draft rules for the wage code, only 13 had framed draft rules for the occupational safety code. For the industrial relations code, 20 states/UTs had drawn up the draft rules and for the code on social security, 18 states and UTs had prepared the draft rules, as per information with the labour ministry.

Close

India has consolidated 29 central labour laws into four codes on wages, social security, occupational health, and industrial relations. While the parliament approved the Code on Wages in August 2019, the rest three were passed in September 2020. But none of them has been rolled out as yet.

The labour codes are expected to introduce far-reaching changes with implications for employers and workers. They will offer greater flexibility in rolling out short-term work contracts, make hiring and firing flexible, and make industrial strikes harder.

There will be a new national wage floor that will benefit workers, while informal and gig workers will get a social security net. A change in the definition of wages may impact the take-home amount but will increase retirement savings – something that some entrepreneurs and employers oppose because it could increase their employee cost in the short term.

The first official said the Union labour ministry is for a simultaneous rollout across India and underlined that gig and platform workers are going to come under the social security net, and in this effort states, Centre and platform economy firms will be equal partners.

India has registered at least 7,17,686 gig workers, and almost 58 percent of them have come from West Bengal, Uttar Pradesh and Bihar alone, according to official data.



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Prashant K Nanda is an Associate Editor at Moneycontrol .
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