The Centre is set to make a renewed bid to roll out the long-delayed labour codes. The labour ministry is going to hold consultations with state governments and urge them to align their labour rules with the four codes passed by Parliament in 2019-2020, as it aims to notify the codes in the coming months, according to an official source.
“There is a need to sensitise the state governments about the intention and aim of the Centre,” the official said. “At present, some rules of some state governments are not aligned with the four codes, we wish to address it,” the person added. The meeting of the Union labour ministry officials and labour secretaries of states is expected to take place next week.
The Narendra Modi government in 2019-20 had undertaken a “plethora of facilitative reforms” to reduce the multiplicity of labour laws. As many as 44 labour related acts were consolidated into four codes with the objective of reinforcing trade and investment, facilitating ease of doing business and reducing compliances, addressing the issue of decriminalisation, addressing skill development needs, and dispute resolution.
The four codes are: Code on Social Security 2020; Occupational Safety, Health and Working Conditions Code 2020; Industrial Relations Code 2020; and Code on Wages 2019. These four codes, although framed, are not yet notified, as the Centre is waiting for the states to pass their respective legislation to enforce these Codes.
To be sure, labour laws fall under the concurrent list of the Constitution of India. Hence, both the centre and states are empowered to make rules. The four codes enacted by the Centre also provide the liberty to the state government to make their rules for specific matters. Hence, experts say that it’s only natural that there would be some variance in the rules due to local requirements and dynamics.
Consider for instance, the Central rules mandate 8 hours of work per day, including a maximum limit of 5 hours of continuous work, and one or more intervals of rest period (maximum limit – one hour). But some states such as Haryana, Karnataka, and Maharshtra have slightly different rules in this regard. Rules in Maharashtra say that no employee should work more than 48 hours per week, and intervals during work hours shouldn’t exceed 30 minutes, every day.
Also, with respect to revision of dearness allowance, while both the Central and the state rules of most of the states provide for revision of DA twice in a year, Andhra Pradesh says that it will be revised only once and Uttar Pradesh has no corresponding rule.
For recognition of the sole negotiating trade union of workers, the draft central rules prescribe membership of 30% of workers employed in industrial establishments as the minimum threshold for the trade union. However, some states have taken a departure and suggested liberal approach by lowering the threshold in the range of 10-20%, and in the layoff aspect, the rules in Chhattisgarh, Karnataka, Madhya Pradesh and Tamil Nadu differ.
Amit Kumar Nag, partner, AQUILAW pointed out that the divergence between central-state rules as well as inter-state rules exists in terms of “procedural differences” in some cases while in few cases, we note that the state has refrained from making rules on particular sub-topic for which centre has laid down the rules.
Akhil Chandna, partner, Grant Thornton Bharat, said that from an industry perspective, if an organisation has multi-state presence, varied rules can pose a challenge as the organisation needs to align its policies differently with state rules to meet the statutory requirements. “If the state rules are aligned with central rules, this helps in ease of compliance and administrative convenience to such organisations,” he said.
As per the latest labour ministry data, 32 states and union territories have published draft rules under The Code on Wages, 2019; 30 states and UTs on The Industrial Relations Code, 2020; 31 states and UTs on The Code on Social Security, 2020; and 31 States and UTs on the Occupational Safety, Health and Working Conditions Code, 2020.
Zeeshan Farooqui, partner, King Stubb & Kasiva said that in the event where there are significant variations and contradictions between the central and state labour laws, then the workforce would ultimately have to bear the brunt of the same and suffer. “Without collaborative and collective efforts between the two, a host of challenges would arise for all stakeholders involved and the same would give rise to a plethora of disputes,” he said.
PV Murthy, head-labour & employment practice, Economic Laws Practice said: “State rules have to be aligned with central labour codes. Since the subject of labour falls under the concurrent list, states are given rule-making authority to adopt tailored legislative approach that address each state’s unique demographics, socio-economic conditions, customs, and local specific work rules.”
