Citing delays on the part of states to finalize the rules. The move is expected to give companies more time and bandwidth to roll back their pay structure and other HR (HR) policies; as employee costs for companies will increase due to certain provisions of the code.
A senior Labor Ministry official confirmed to ET that the implementation of the Labor Code has been postponed for some time. The official said, “The implementation of the labor code is unlikely to take place from April 1. The government wants at least some industrialized states to notify the rules in the four labor codes; with the center to avoid any legal void.”
The Ministry of Labor is ready with rules on four codes and will notify them after some states are ready with rules in their domain. So far; only Jammu and Kashmir has notified the rules for the code while Uttar Pradesh, Bihar; Uttarakhand and Madhya Pradesh have drafted rules for the two codes while Karnataka has kept it for one code.
The delay in implementing the Labor Code is a relief for India Inc as; the resurgence of Kovid-19 cases in major industrialized states has raised fears that the economic reforms seen so far may stall or even reverse if the cases escalate. are.
Suchita Dutta, executive director of the Indian Staffing Federation, said that while the preparations are going on, people are living in a little ambiguity. “Companies started preparing for changes based on the provisions of codes and draft rules,” Dutta said.
“Preparation for the implementation of all labor codes has been as substandard as the work codes themselves. XLRI’s labor expert and professor KR Shyam Sundar said that the central government should take abundant measures to guide the state governments and should; also indicate to employers and trade unions that they are serious about implementing the four codes.
“Unintentional delay in the implementation of the code is contrary; to the haste shown in implementing the code during the epidemic. Uncertainty will also affect foreign direct investment.
The Parliament approved the Code on Wages in 2019, while in September 2020 it pushed forward the Social Security Code; the Code on Industrial Relations and the Code on Occupational Safety; Health and Working Conditions.
The Ministry of Labor had amended 29 labor laws into four codes to reduce the burden of compliance; increasing ease of doing business, greater ease of hiring and firing workers; and increased flexibility for employers in terms of working hours .