Centre Forms Committee to Fast-Track Labour Code Implementation in States

Labour ministry has formed an internal committee to push state governments to align their existing laws with the ‘spirit and provisions’ four new labour codes. The committee formed last month is tasked to consult with various stakeholders. The move by the ministry aims to improve the ease of doing business, attract investment, and facilitate job creation, the Business Standard reported. 

“The government remains committed to undertake labour reforms in all forms so as to improve the ease of doing business, attract investment and facilitate job creation,” BS reported, citing a source. “This committee, having representation from various stakeholders, will deliberate and come up with suggestions and amendments in the existing laws such as Factories Act, Shops & Establishment Act so that their provisions are in line with the new labour codes and both the workers and industry are benefitted,” the source added.

The Narendra Modi-led government reformed the labour laws in 2020 and decreased the number of legislations from 29 to four codes, including Code on Wages, Code on Social Security, Occupational Safety, Health and Working Conditions Code, and Industrial Relations Code. Due to resistance from several workers’ groups, the four codes haven’t been fully implemented yet. 

“This move is part of the government’s efforts to advance labour reforms without getting entangled with the labour unions, who have adopted an obstinate and adamant stance while dealing with the question of labour reforms. The government is ready to talk on all provisions with the critics, if they provide some constructive feedback,” a labour ministry source told BS. 

Certain states have made changes in their laws to position themselves as an attractive destination for investment. Around 20 states and union territories (UT) have reportedly increased the retrenchment threshold from 100 to 300 without government approval, and nearly 19 states and UTs have doubled the threshold for workers for applicability of the Factories Act of 20 (for units with power) and 40 (for those without power).