States and UTs to Align with New Labour Code

Context

The Union Government has entreated states and Union Territories (UTs) to align their current labour legal guidelines with the spirit and provisions of new labour codes.

Background

• Between 2019 and 2020, Parliament passed 4 consolidated labour codes to update 29 outdated central labour legal guidelines:
• Code on Wages, 2019: Regulates wages, bonus payments, and same remuneration.
• Industrial Relations Code, 2020: Deals with trade unions, employment conditions, layoffs, and dispute decisions.
• Code on Social Security, 2020: Merges legal guidelines on provident fund, pensions, insurance, maternity advantages, and gratuity.
• Occupational Safety, Health and Working Conditions Code, 2020: Consolidated guidelines on safety, working hours, health, and welfare.

Progress at the State Level

• Labour being on the Concurrent List, states should frame their own policies under the new codes.
• Many states have proactively all started amending their respective labour laws to mirror the cause and provisions of the new codes.

Key Amendments Undertaken by using States and UTs

• At least 20 states and UTs have amended legal guidelines to increase the brink for prior government acclaim for retrenchment, layoff, or closure from 100 to 300 employees.
• 19 states and UTs have doubled the worker threshold for the application of the Factories Act:
  • From 10 to 20 employees (where power is utilized in manufacturing).
  • From 20 to 40 employees (wherein power isn’t always used).
• Contract Labour Act Applicability: 19 states and UTs have raised the threshold for application from 20 to 50 people.
• Night Shifts for Women: 31 states and UTs have allowed women to work night time shifts (subject to particular safety situations including delivery, lighting, and safety).

Challenges in Implementation

• Delayed Notification by the Centre: Although the codes have been exceeded between 2019 and 2020, they are to be formally notified for implementation.
• Need for Synchronised and Uniform Rollout: While many states have moved in advance with individual reforms, the dearth of coordination between Centre and states can cause:
  • Legal ambiguities and overlaps in enforcement,
  • Compliance problems for corporations working throughout multiple states,
  • Uneven labour requirements, undermining the concept of a national labour market.
• Opposition from Trade Unions: Multiple national trade unions have adversarial the codes, alleging that;
  • They dilute activity safety, in particular with relaxed norms for retrenchment and fixed-term employment.
  • The emphasis is extra on business enterprise flexibility than on worker welfare.
• Infrastructural Gaps: Many state labour departments lack the potential—each in manpower and digital structures—to put in force new compliance and inspection frameworks.

Way Forward

• The Centre needs to provide readability on notification timelines to facilitate coordinated implementation.
• Capacity-building and focus at the nation level are vital for effective enforcement.
• A balanced method is needed to ensure both employee welfare and industrial competitiveness.
• There have to be inclusive consultations with trade unions, industries, and civil society companies to cope with issues.

Conclusion

• The proactive position of states in aligning with labour reforms underscores a shared objective of enhancing commercial investment and employment generation. 
• However, the Centre has to now circulate decisively to ensure nationwide implementation, in particular in regions like social security for gig workers, to recognise the full capacity of these landmark reforms.

Source: The BS

UPSC Mains Practice Question

Q. “Success of ‘Make in India’ programme depends on the success of ‘Skill India’ programme and radical labour reforms.” Discuss with logical arguments. (2015)

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