Labour Law Reforms: After a Tearing Hurry, Ad-hocism, Lethargy and Complexities Dominate Processes of Making Regulations – Part I

Analysing the stuttering, impeded the implementation of the much-vaunted Labour Codes over the last two years, PROF. K.R. SHYAM SUNDAR explains the five major flaws in the Union Government’s follow-up to the enactment of the Codes by the union government. In this first of a two-part series, he goes over three of these flaws: a social dialogue deficit with stakeholders, inordinate delay in implementation, and ad-hoc implementation.


WHILE the Code on Wages (CW) was passed by the Parliament in August 2019, the other three labour codes, viz. the Industrial Relations Code (IRC), the Occupational Safety, Health And Working Conditions Code (OSHWCC), and the Code on Social Security (CSS) were cleared by Parliament on September 23, 2020, even as the opposition parties boycotted the proceedings in Parliament, agitating over procedural matters relating to the controversial farmers’ bills.  On the very day, the Parliament adjourned sine die even though it was to function till October 1, 2020.

Even though the union government showed a tremendous and even missionary sense of hurry to enact the Codes, it did not show the same sense of enthusiasm in getting them implemented, save for some pronouncements that were not backed by any concrete institutional or federal actions. For instance, the Union Labour Minister proclaimed that the CW would benefit 500 million workers immediately after its passage and the Labour Codes would have a huge coverage. Similar tall claims were made about the massive increase in coverage of workers through the three Labour Codes when they were passed last year. These proved to be merely chest-thumping exercises of vain boasts, with the actual on-ground results have proven to be questionable till now.

Also read: New Labour Codes dilute workers rights and collective bargaining

Frosty reception to labour codes by trade unions, industry, analysts

It may serve as useful context to recapitulate the major responses from trade unions, employers and commentators on the Labour Codes before we get to discussing their implementation process.

Trade unions, irrespective of their affiliations, have almost unanimously slammed them and rejected them. Ten central trade unions (CTU) have jointly demanded that they be put on hold for the time being.

Citing economic slowdown and the pandemic-induced lockdowns, employers’ associations have lobbied for a suspension of labour laws in general.  In fact, the Confederation of Indian Industry has sought clarifications from the union labour minister on some of the draft rules promulgated under the four Codes.

Several commentators have made four studied submissions on the Codes.

One; the Codes suffer from numerous procedural and substantive shortcomings, apart from poor drafting and inconsistencies.

Two; they have hurt the historically won labour rights, and in some senses, failed to perform the function of redistributing legal power between individual workers and employers.

Three; they have possibly violated the Parliamentary scrutiny procedure by substantially differing in the final Bills presented for passage in the Parliament from the Bills that had been referred to the Parliamentary Standing Committee on Labour in 2018 and 2019.

Four; the Codes fail to address the issues faced by millions of workers.

Five; though this criticism is beyond the law-making process, it is worth mentioning that neither the history of implementation of labour laws nor the institutional infrastructure to implement them have been adequate to the task.

Thus, we see that the Codes are on a shaky foundation. This will bear remembrance as we discuss the Rules framed under them.

Also read: Why are the MPs criticising the new Labour Codes? Are labourers going to lose out?

After the complete and unpardonable breach of democratic norms and passing the Labour Codes in a tearing hurry, the legal processes following the enactment of the Codes suffer from five major deficits, which are an absence of social dialogue, inordinate delay in implementation, implementation in a piecemeal fashion (ad-hocism), the slow pace of formulating regulations (lethargy), and chaotic regulations (lack of coordination). The first three deficits shall be discussed below, and the remaining two, along with takeaways and recommendations for course correction, shall be discussed in the second part of this article series.

Social Dialogue Deficit

It is quite evident that the three Labour Codes were passed in a tearing and unholy hurry by the ruling party alliance since there was little to no social or political dialogue concerning them. Besides being hurriedly passed without meaningful debate in the Parliament, the Labour Codes have been panned for not holding proper consultations with trade unions before drafting them. This was even flagged by the International Labour Organization for being violative of the international labour standards of ILO that India had committed to. 

Aggrieved, ten CTUs boycotted a one-day virtual conference for consultations on the rules pertaining to the four labour codes called by the union government in December 2020.

The CTUs, in fact, wrote to the government that the one-day video conference is “meant only for the record and would serve no fruitful purpose.” According to their letter, the Codes govern the rights of millions of workers and of establishments, and effective consultation on each would require a considerable amount of time,  which is why “holding consultations just for namesake through video conferencing” was “a farce.” 

They boycotted another virtual consultation process scheduled on January 12, 2021, on the same grounds, and reiterated their demand for the government to hold physical meetings with adequate time given to all stakeholders to engage in meaningful discourse.

This indicates the level of trust deficit that exists within trade unions about these codes.

Unpardonable Delay in Implementation 

The union government notified the draft Rules under CW on July 7, 2020 (after coming out with preliminary draft rules on November 1, 2019). Still, the Wage Code, which promised universal coverage of minimum wages, is yet to see the light of the day. This is because the union government has so far only notified a few provisions of the CW relating to the Advisory Board for minimum wages, and has not even formed it yet even though nearly two years have passed by since the passage of the CW.

Also read: Code on Wages Creates Maze for Workers

The Rules under the CIR, the CSS and the OSHWCC were notified on October 29November 13 and November 19, 2020, respectively. Recently, the union labour ministry notified draft rules on trade union recognition on May 4, 2021. As I have argued earlier in this publication, these rules are still incomplete as the labour ministry is yet to frame rules relating to the recognition of CTUs by the union government.

Also read: Draft Rules on Trade Union Recognition and Activities are arbitrary and unreasonably restrictive

The union government is yet to make a final notification of all the draft rules under the four Labour Codes.  It had initially announced that the Labour Codes would come into effect from April 1, 2021. Their implementation was then deferred, primarily due to the fact that most state governments have not finalised the rules.

No fresh deadline has yet been announced for bringing the Codes into effect. Press reports have indicated that the Codes may not be implemented even by the end of 2021.


Even though the union government has not notified the final rules under the Codes, it has, in the exercise of powers vested with it, has taken piecemeal actions like notifying the Central Advisory Board Rules under the COW on March 1, 2021, and invoking Section 142 of the CSS to enable the application of Aadhar for the construction of a national database of unorganised workers, including migrant workers, which the government claims is at an advanced stage of development.

Last week, it also constituted an Expert Committee with a tenure of three years to provide “technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wages”. This has been criticised by trade unions and academics.

(Dr K. R. Shyam Sundar is Professor, HRM Area, XLRI, Xavier School of Management, Jamshedpur. The views expressed are personal.)

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