The Indian Staffing Federation (ISF), which represents the private employment services units, has urged the Centre to implement the four labour codes in phases, since it is difficult to roll them out in one go.
All the four codes – on wages, industrial relations, social security and occupational safety & health (OSH) – were passed by Parliament in September 2020 but these are yet to come into effect, mainly due to dithering by some major states to frame the rules under their domain.
The codes provide for a combination of reformist and social-security steps for boosting labour productivity. Delays in their implementation might hit India’s prospects of attracting fresh investments, at a time when fixed asset creation in the economy needs to gather pace for the much-awaited economic revival.
ISF president Lohit Bhatia said, “Carrying out such a huge exercise is not an easy task, particularly as labour is on the concurrent list of the Constitution. Every state is required to come on board. Considering this, the Centre may implement the codes one by one or even section-wise.”
Rather than delaying things, the phase-wise implementation will at least make the stone rolling, he said, adding that implementation of the reformist laws would ease labour market rigidities and increase the ease of doing business.
Apart from various industry-friendly proposals like allowing a business with up to 300 workers (from 100 now) to retrench workers or close units without prior government permission, regulating trade unionism and introduction of fixed-term employment for all sectors, the new laws also seek to ensure minimum wages along with timely payment of wages to all workers and propose to bring them all under the social security net.
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. By doing so, the Centre wanted to bring in a sea change in the way business and industry functions today.
The Centre has time and again said that it intends to implement the codes at one go and across the country. On its part, the Centre is ready with the rules for implementation of the codes.
Bhatia said taking cue from the exercise the Centre carried out before implementation of the GST, the Centre should also take the initiative of holding a week-long, continuous consultative meeting with the states to reach to a consensus.
However, he said that the Centre should give sufficient time to the business and industry to do their homework and adopt to the new era of doing business.