With the start of the new fiscal year, industry is awaiting more clarity on implementation of the new labour codes the implementation of which now lies in the States’ domain.

“It is not possible for the Centre to give a definite date for their implementation as it will depend on States,” said a top government source.

“Labour is a concurrent subject and State governments are working on their own rules under the Codes at present. A lot is dependent on the States as they have to finalise the rules,” he added.

It is expected that the Codes will come into force by the middle of this year.

In response to a query in the Rajya Sabha, Rameswar Teli, Minister of State, Ministry of Labour and Employment on March 21 informed the upper house that the Centre has published the draft rules under four labour codes, inviting suggestions and objections from all stakeholders as a step towards their implementation.

“Till date, the provisions of Section 142 of the Code on Social Security, 2020 and the provisions related to the Central Advisory Board as specified under Section 42 and 67 of the Code on Wages, 2019 have come into effect,” Teli had said.

As many as 27 States have pre-published draft rules under the Code on Wages, 2019, while 23 States have pre-published draft rules under the Industrial Relations Code, 2020.

Teli had said that 21 States and UTs have pre-published draft rules under the Code on Social Security, 2020 and 18 States have done so under the Occupational Safety, Health and Working Conditions Code, 2020.

Due to their far reaching impact, industry is hopeful that it will be given sufficient time to implement the new rules.

“It appears clear that April 1, 2022 will no longer be the date of implementation and that it has been deferred. The industry hopes that sufficient advance notice will be given by the government on the implementation date,” said a recent report by Nishith Desai Associates.

Experts’ take

The report authored by Vivek Ilawat, Sayantani Saha and Vikram Shroff said employers should continue to assess the changes to the current legal framework and brace themselves for what will be the largest and most impactful shift in the Indian labour law paradigm.

Rituparna Chakraborty, cofounder, TeamLease Services, said the codes must be implemented soon as it would unlock huge formal job creation within States leading to higher financial gains for them.

“It has to be done; it is essential. There has to be some amount of consensus across States as it will not benefit the industry if different States have different rules. Now that the economy is beginning to revive, these Codes will become more important as there is potential for job creation,” she said.

The government had codified a plethora of national level labour laws into the four labour codes that would, amongst many measures, rework the wages and provident fund calculations through restructuring of salaries. It would also improve ease of doing business by permitting firms with up to 300 workers to decide on lay-offs, retrenchment and closure without government permission.

The Parliament had passed the Code on Wages in 2019 and the other three Codes in 2020. They were initially expected to be implemented from April 1, 2021.

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