Labour Reform Implementation Poses Challenges for New Coalition Government
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New Coalition Government will face a tough job in implementing labour reforms !
Despite the shift from a decade of strong single-party dominance to a coalition government at the Centre, labour experts predict that the implementation of the new labour code will largely remain unaffected.
However, they say that there might be some modifications in specific laws that impact certain states like Bihar and Andhra Pradesh.
In 2020, the Centre introduced four new labour codes in a bid to simplify and modernise labour laws. These codes aim to consolidate a vast amount of existing legislation into a more manageable framework.
The current labour law system in India is a labyrinth of multiple central and state laws. The new codes – the Code on Wages, Industrial Relations Code, Occupational Safety, Health and Working Conditions Code, and the Code on Social Security – merge these laws into four, more concise sets of regulations
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By streamlining compliance procedures, the codes aim to make it less burdensome for businesses to operate. The standardised framework is expected to reduce administrative costs and improve ease-of-doing business. Additionally, the codes introduce flexibility in certain areas, potentially giving companies more room to adapt to the changing work environments.
Before the 2024 general elections, the central government’s labour ministry was considering a phased implementation of the labour codes. However, this plan did not materialise, due to a lack of consensus, law experts say
In the last two terms, he said a single party with a full mandate was unable to bring the requisite consensus due to the lack of support from certain states/regional parties and other opposition parties. “That said, being a coalition government, the other allies/partners and regional parties may have leverage now,” Singh added.
Concerns of trade unions
Trade unions have concerns about potential weakening of worker protections, while businesses might have reservations about specific aspects of the codes. Without a common ground being reached, the nationwide rollout has been delayed.
