Implementation of employment policies is a crucial aspect of ensuring fair labour practices and protecting the rights of both employers and employees. The new Labour codes aim to balance the welfare of employees and ease of doing business in India. However, the transition to the new regime requires a thorough understanding of the laws applicable and their implications.

The new labour codes are a consolidation of 29 statutes on labour that have required a critical reformation since decades. With all the speculation for the implementation of the labour codes, which is again on a halt, understanding the implications of the new codes is of paramount importance, regardless of whether one falls on the employer or employee side of the field.

As ease of doing business is one of the top priorities in a rapidly growing economy with one of the largest workforces in the world, these new codes may form an essential tool in facilitating the pursuit of this priority.

While a few inconsistencies remain, one can be prepared to witness the new labour codes come into force next year. Various states and union territories have come up with draft rules under each labour code and pre-published them for public consultations.

The Four Codes are:

  1. The Code on Wages, 2019 (the “Wage Code”);
  2. The Occupational Safety, Health and Working Conditions Code, 2020 (the “OSH Code”);
  3. The Code on Social Security, 2020 (the “SS Code”); and
  4. The Industrial Relations Code, 2020 (the “IR Code”).

The policies at the employer level are typically established by governments at various levels (national, regional, or local) and can also be developed by individual organizations. Here are some key steps and considerations for implementing employment policies at the organisational level:

1. Policy Development

Employer should ensure that the policies comply with all relevant or existing labor laws and regulations in the jurisdiction. Seek legal counsel if necessary to make sure they are up to date and in accordance with current legislation. Customization of the policy is the second major criteria, tailoring the policies to the specific needs and circumstances of every organization.

Different industries and companies may have unique requirements. The involvement of employees is also relevant while drafting policy, so consider employees, unions (if applicable), and relevant stakeholders in the development or revision of employment policies to ensure inclusivity and fairness.

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2. Communication and Training

After the policy has been drafted, clearly communicate the policies and applicable codes to all employees, making them easily accessible through employee handbooks, the company intranet, or other means. Provide training sessions or workshops to ensure that employees understand their rights and responsibilities under these policies and codes.

3. Implementation:

The management should apply the policies and codes consistently across all levels of the organization. This helps prevent discrimination and favouritism. They should establish procedures for reporting violations and ensure that complaints are thoroughly investigated and addressed in a timely manner. Clearly outline the consequences of policy violations, which may include disciplinary actions, warnings, or termination, in accordance with your policies and applicable laws. Maintain detailed records of policy violations, investigations, and actions taken, as this can be crucial in case of legal disputes.

4. Monitoring and Compliance

Periodically review and update your policies and codes to reflect changes in laws, regulations, or the needs of your organization. Conduct internal audits to ensure compliance with policies and codes. Consider third-party audits for independent verification. Establish feedback channels for employees to voice concerns or suggest improvements to existing policies and codes. Provide mechanisms for employees to appeal decisions and seek remedies if they believe they have been treated unfairly or unjustly. Familiarize yourself with relevant government agencies, labor unions, or industry associations that can provide guidance and support for implementing labor codes and employment policies.

5. Employee Awareness and flexibility:

Continuously educate employees about their rights and responsibilities under the policies and labor codes. Foster a culture of mutual respect and inclusion to encourage employees to adhere to the policies voluntarily. Be prepared to adapt policies and codes in response to changing social, economic, or legal conditions.

6. Legal Counsel:

Consult with legal experts, when necessary, especially for complex legal matters or when facing legal challenges related to employment policies.

Remember that effective implementation of employment policies according to the new labor codes is an ongoing process that requires commitment and vigilance to ensure fair and ethical labor practices within your organization.

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The new codes aim to balance the welfare of employees. However, the transition to the new regime requires a thorough understanding of the laws applicable and their implications. Considering the implications of implementing the new labour codes, the government must consider implementing them in a phased manner.

After notification of implementation, the impact that the new labour codes shall have on implementation shall vary from one industry to another, or from one employer to another, as the variation will depend on the present salary and organisational structure of the concerned industry/establishment. This is for consideration that labor laws and regulations can change over time, and it’s crucial to stay updated with the latest developments in Indian labor law to ensure ongoing compliance.

Additionally, specific implementation details may vary based on your industry and location within India, so consulting with legal experts familiar with your particular circumstances is advisable.

This article has been written by Dr. Komal, Professor, Dean PG, IILM Law School. Views are personal