Government considering options to roll out labour codes

The government is considering various strategies to ensure a nationwide roll out of the four labour codes even though some states and union territories are yet to pre-publish draft rules under one or more of these codes, according to a detailed report on The Economic Times news website.
The ministry of labour and employment is considering several options including a gradual repeal of the old labour laws to ensure there is no legal void in states that are yet to draft rules. Besides, the ministry is holding talks with states that are behind in publishing rules, urging them to expedite their compliance.
As per the labour ministry’s monthly progress report, eight states and union territories—Meghalaya, Nagaland, Tamil Nadu, West Bengal, Lakshadweep, Sikkim, Andaman & Nicobar Islands and NCT of Delhi—are yet to pre-publish draft rules under one or more labour codes.
In order to improve the ease of doing business and move towards universal social security, the government had consolidated 29 central labour laws into four labour codes. These include the Code on Wages, 2019, the Industrial Relations (IR) Code, 2020, the Code on Social Security (SS Code), 2020 and the Occupational Safety, Health and Working Conditions (OSH&WC) Code, 2020.
Saraswathi Kasturirangan, partner at Deloitte India, agrees that the reluctance of a few states will not impact the roll out and the accruing benefits of the codes.
“States not issuing rules under the new labour codes may not be a show-stopper since many provisions, even today, are governed by the central Acts like the provident fund, gratuity, etc,” she said, adding even under the current laws many states have not issued rules despite labour being a concurrent subject.
According to Kasturirangan, the central government has the authority to implement the codes in a phased manner by calling out the relevant provisions.
Impact on implementation
Vaibhav Bhardwaj, partner at law firm IndusLaw, said it is technically possible and permissible for the Centre to roll out the codes pan-India even in the absence of state-specific rules in the relevant states. “However, on-ground implementation would certainly be undermined and difficult to be carried out in these states.”
Bhardwaj said the failure of some states to cooperate in the implementation of the codes may jeopardise the Centre’s efforts to ensure uniformity in the country’s labour laws and the Centre may initiate legal proceedings against these states to ensure compliance with the codes.
Impact on investments
Dorothy Thomas, partner at law firm Shardul Amarchand Mangaldas, is of the view that the roll out of the codes may result in continued agitation of labour unions in heavily industrialised states such as Tamil Nadu and West Bengal with a high degree of collective bargaining culture.
“However, investments into such states would not be impacted going forward as it is largely attributed to the pre-existing infrastructure and the trained labour available in these states,” Thomas said, citing the example of Tamil Nadu, which is one of the most industrialised states in India with several labour-oriented policies.