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Rolling out of labour Codes may be delayed

New Delhi,March 12,2021: States’ reluctance to frame rules under the four labour codes could delay, if not derail, the Centre’s ambitious labour reforms. The plan to roll out the codes from April 1, 2021, has been put on hold, official sources said, citing the lethargy displayed by several states according to a report published in the Financial express.

The development might hit India’s prospects of attracting fresh investments, at a time fixed asset creation in the economy needs to gather pace for the much-awaited

The states’ dithering would prolong the wait for increased labour flexibility by the existing establishments. Among the reform proposals are freedom for businesses to retrench workers or close units without prior government permission and fixed-term employment scheme, which are in sync with the nature of business of several establishments, especially the export-oriented ones.

On its part, the Centre is ready with the rules for implementation under all the four codes – codes on wages, industrial relations, social security and operational safety & health — but while central rules are applicable for the central sphere such as ports and railways, the codes empower the states to make rules, modelling on central rules, for establishments under their jurisdiction. Only three-four states have prepared the draft rules so far, the sources said.

The Centre, however, may not wait for long to implement the rules; it will wait till some major industrialised states come out with the rules.

 “Gradually, states will frame the rules, then the consultation process will begin. I think it will take at least a couple of months or more,” he added.

 Till now only Bihar, MP and Karnataka Govt. have come out with their draft rules only on Code on wages 2019.

Amalgamating 29 central labour laws into four codes, the Centre wanted to bring in a sea change in the way business and industry functions today. While the code on wages was passed in August 2019, the Parliament approved three other codes on September 23 last year.