The four labour codes, all notified by the Centre by September 2020 and marked for a combination of reformist and social-security steps for boosting labour productivity, are still hanging fire due to slow-moving – if not dithering – state governments.
No state has so far notified the requisite rules under these codes; only 12 among 28 states have published even the draft rules thus far.
This is despite the fact that the Central government has been constantly urging the other states to frame the rules, which are necessary for the roll-out of the codes.
The Union labour secretary has had more than half a dozen meetings over the last few months with the principal secretaries concerned of states, prodding them to expedite the process.
As a step towards implementation of the labour codes, the Centre has already published the draft rules and invited comments of all stakeholders including general public on the provisions.
The states that have come up with the draft rules under all four labour codes are Madhya Pradesh, Bihar, Uttarakhand, Uttar Pradesh, Odisha, Punjab, Chhattisgarh, Jharkhand, Arunachal Pradesh, Himachal Pradesh, Haryana and Manipur. Jammu & Kashmir, a union territory, also released the rules under all the codes.
In all, 24 states/UTs have, till December 16, published draft rules under code on wages, 20 states on code on industrial relations, 18 on code on social security and 13 on the code occupational safety, health and working conditions.
The age code was notified on August 8, 2019 and the three other code on September 29, 2020. Since labour is in the concurrent list of the constitution, rules are required to be framed by the central government as well as by the state governments.
At the very beginning of the Modi government’s tenure, it embarked on the reform path by proposing to amalgamate 29 labour laws into four distinct Codes.
The Centre wants to implement all the four codes at one go across the country and hence, any delay on the part of the states to prepare and finalise the rules would mean a prolonged wait for the businesses and industry to enjoy the ease of doing business that the codes are expected to bring in. The increase in the threshold from 100 workers to 300 workers (in a unit) for seeking prior permission for retrenchment, lay-off and closure, is prescribed in the Industrial Relations code. The Centre has been maintaining that there has been no empirical evidence to suggest that higher threshold promotes hire and fire.
The IR Code also proposes to tighten trade unionism in the industry. Under a new feature on “recognition of negotiating union”, it has been proposed that a trade union will be recognised as sole “negotiating union” if it has support of 51% or more of the workers on the muster roll in an establishment. If no such trade union has support of 51% or more of workers on the muster roll of that industrial establishment, then a negotiating council will be constituted for negotiation. The provision for workers resorting to strike has also been tightened.
The labour codes also envisage better social security cover for the over 50 crore workers from organised, unorganised and self-employed. The social security net of ESIC and EPFO will be widened to bring in all workers and self-employed persons under it. Of over 50 crore workers in the country, 90% are in the unorganised sector. The government has already started the process of creating a database for the unorganised sector workers.