Roll-out of labour codes unlikely before 2024 polls

Updated: April 3, 2023

Plan to notify reformist laws from April 1 dropped’

The Centre has decided to delay nationwide roll-out of the labour law reforms till after the 2024 general elections.

Though indications were there of further delay in the implementation of the four labour codes passed by Parliament as early as in September 2020, a section of the industry was hopeful that the government would try and notify the Codes, effective April 1 this year.

The ministry of labour and employment late last fiscal year held a series of discussions with stakeholders including industry representatives and trade union leaders to build consensus on the implementation date, but these efforts did not fructify. “The talks have now come to a halt,” a source said.

While the delay in notifying the rules by the state governments are holding back the implementation of the codes, labour market rigidities have already come down to an extent, with many states going ahead with steps to ease the norms. Also, firms in labour-intensive industries like textiles and clothing are now resorting to fixed-term employment, as a legitimate option.

“There has not been any major movement or discussion towards the implementation of the four codes. A number of states were yet to notify these codes while some continued to have some reservations. Trade unions are completely opposed to them and a consensus with them had not been reached,” noted a person familiar with the development.

Trade unions have been opposed to the implementation of the codes calling them “anti-worker” and have threatened to go on strike if they are brought into effect.

Previously, sources had indicated that the government had been concerned that the labour codes if implemented in a haste may see the same fate as that of the farm laws which had to be eventually repealed. A decision on implementing the Codes may now be taken only next year after the General Elections, sources indicated.

As part of its reform agenda, the government had codified 29 Central labour laws into four codes – the Code on Wages 2019, the Code on Social Security 2020, Occupational Safety, Health and Working Conditions Code 2020, and the Industrial Relations Code 2020.

Since labour is a subject on the concurrent list of the Constitution, both the Centre and the states can frame laws and rules. The government has been keen on an all-India implementation of the codes and has been hoping that all states will come on board.

A few states are understood to have given their final nod to the rules for the labour code. The Maharashtra Cabinet is understood to have approved the rules relating to the Industrial Relations Code in March. Earlier in January this year, the government had through a notification directed the administrator or Lieutenant Governor of union territories including National Capital Territory of Delhi, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Chandigarh, Puducherry and Lakshadweep to formulate rules under the Industrial Relations Code, 2020.

As of 13 December 2022, 31 States also have pre-published the draft rules under the Code on Wages, 28 States under Industrial Relations Code, 28 States under Code on Social Security, and 26 States under Occupational Safety Health and Working Conditions Code. A final notification would be required to implement them.