The government may announce its intent to roll out the four Labour Codes from the start of the next financial year in the coming Budget, sources said. It is likely to spell out certain changes in the codes to allay the concerns of trade unions and a few state governments that continue to remain wary of the reformist laws.
All the four codes were notified by September 2020, but are still hanging fire, as the final rules thereunder are yet to be published.
The Centre’s move comes amidst worries that a further delay may push their implementation beyond the 2024 Lok Sabha elections.
The roll out of the much-delayed Codes has also been a key expectation of the industry and the government has been working to build consensus on its rollout with state governments and trade unions.
Sources said that as a last-ditch attempt, the ministry of labour and employment is exploring ways on how to take the process forward. There has also been stiff resistance from the trade unions to the Codes, which they have termed as anti-worker. They have opposed provisions such as allowing companies with up to 300 workers to decide on lay-offs, retrenchment and closure without prior government permission and have threatened demonstrations and agitations if the Codes are implemented.
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The labour ministry is also understood to be open to reviewing various provisions in the Codes including the proposal to cap allowances at 50% of the salary. While this would increase the contribution to provident fund, the take-home salary would reduce. This provision has been a significant concern for both employers and workers.
Sources indicated that the rules under the Codes can take care of these concerns and give States and the Centre flexibility to make any changes, without the need to amend the Codes. The labour ministry has held a series of meetings with employer associations and trade unions over the roll out of the Codes earlier this year.
To be sure, the codes include a mix of reformist and social-security steps for boosting labour productivity.
“If the Codes don’t go through now, then they will be put on the backburner until the Elections are done and dusted with. There are a series of state elections in 2023, followed by the General Elections in 2024. There has been a lot of expectation from industry that they will be implemented but the way things are going, it may be difficult,” said two sources familiar with the development, adding that signs are that these may be put on the backburner. There have also been concerns within the government that a hasty implementation of the Codes could lead to a situation like the farm laws, which eventually had to be repealed.
As part of its reform agenda, the government had codified over two dozen labour laws into four codes – the Code on Wages, the Code on Social Security, Occupational Safety, Health and Working Conditions Code, and the Industrial Relations Code.
Since labour is a subject on the concurrent list of the Constitution, both the Centre and the states can frame laws and rules. At last count, 31 states and union territories had pre-published the draft rules under the Code on Wages.
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