Labour codes may be priority reform area in first 100 days of new govt

If the new government at the Centre is led by the Bharatiya Janata Party and it again takes up reins of the country as is being widely expected, implementing the labour codes would be one of its priority areas and the these might kick in from the beginning of the next financial year, The Economic Times has reported quoting officials who preferred to be anonymous.

The reason for choosing April 1, 2025 as the effective date is that it would coincide with the business cycle in the country.

The report said that bringing the four codes into the implementation stage might be one of the top 100-day agenda of the new government.

The codes are a few years old. In 2019, the Parliament passed the Code on Wages. The Social Security Code, Industrial Relations Code and the Code on Occupational Safety, Health and Working Conditions were passed in the following year.

It has already been reported that the Centre is working towards making a transition from ‘minimum wages’ to ‘living wages’ that would ostensibly try to ensure a decent lifestyle of workers leaving behind the minimum wages which barely ensures subsistence living. Apart from this, social security for unorganised workers and steps to increase women’s participation in the workforce could also feature on the short and medium-term agenda of the government.

A bureaucrat told the newspaper that a lot of work for the rollout has to be done so that businesses get enough time to prepare for the new changes that will accompany the codes.

The four labour codes is an outcome of the government combining as many as 29 labour laws with the eventual objective of making life easier for those who invest, own and manage businesses.

Labour ministry officials mention simpler rules, single registration and licence, common definitions and fewer committees and simpler compliance needs as the larger outcome following implementation of the codes.

“Work is going on to make social security organisations under the labour ministry, including the Employees’ Provident Fund Organisation and the Employees’ State Insurance Corporation, receptive to the changes under the codes,” the official told the newspaper.

Though the codes were passed in 2020, two factors held up its implementation – the pandemic and the tardy progress by the states on drawing up rules. While labour is on the concurrent list, necessitating cooperation from the states, several labour unions are also resistant to the switch on the ground that some provisions would harm the interest of the workers.

The government has maintained that the codes would result in strengthening of “the protection available to workers, including unorganised workers in terms of statutory minimum wage, social security and healthcare of workers.”

Earlier in 2024, the Union labour ministry issued an advisory for employers to employ more women. Keen to engineer this change the government is holding discussions with stakeholders to identify steps that could boost it.

The labour ministry is in talks with the International Labour Organisation to help it make the transition to living wage. The government is also actively trying to ensure some form of social security to to all unorganised workers through the e-Shram portal.

The big picture driving the government towards labour reforms is that it will make India attractive to investors – both foreign and domestic – and raise India’s competitiveness in the global markets.