For decades, the Indian textile and apparel industry has been demanding to change archaic laws and the Central Government’s initiative regarding the four codes – the Code on Wages 2019; the Code on Social Security 2020; Occupational Safety, Health and Working Conditions Code 2020 and the Industrial Relations Code 2020 are said to be the biggest reforms of independent India. It was expected that these codes will take effect in the beginning of the financial year 2024, but for many months, there was limbo in this regard, no final notification came and recently it has been said that the implementation of these codes has been stalled. Looking at the overall scenario, they are unlikely to take effect before the general election slated for 2024. So it is obvious that the future of these four codes is very much uncertain.
Presented as part of the reform agenda and one of the most significant economic reforms, the four codes consolidated a complex web of 29 central labour laws. The changes were supposed to increase the number and type of companies that can fire workers without government approval, discard rules that bar women from working in night shifts, enforce new norms on how unions can call strikes and introduce a new social-security regime.
It is worth mentioning here that the rules for the Code on Wages was finalised long back just after it was passed in the Parliament in 2019 while the other three codes were passed by the Parliament in 2020. But it has been said that the Government is holding back its notification because it wants to implement all four codes in one go. Experts believe that this step of the labour code is the single most important thing that can happen in the country but it has been dragged a lot.
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Though the Government has said that these codes will boost growth and employment and end outdated laws no longer in sync with a rapidly transforming economy. This will help in catalysing the creation of employment opportunities in the country, while ensuring basic aspects of safety, social security and health of workers. While various unions came strongly against these codes and termed these as ‘anti-worker’ as the proposed changes are with regard to laying off workers and enforcing a new social security regime. Few of the leading unions have strong objections especially on the Industrial Relations Code (which lays down new conditions on the right of workers to go on strike) and The Occupational Safety, Health and Working Conditions Code, 2020.
Various meetings, discussions between the stakeholders on the execution of these codes have taken place actively but no final consent has yet been arrived at.
State’s own initiatives and decisions
Since labour is a subject on the concurrent list of the Constitution, both the Centre and the states can frame laws and rules for the same. The Central Government has been keen on an all-India implementation of the codes and is hoping that all states will come on board. But some states are yet to publish rules to set the codes in motion, as required.
As far as states with a good size of textile and apparel industry are concerned, Maharashtra notified rules for the codes on 20th March while Uttar Pradesh, Haryana, Punjab have only framed required regulations under the new labour laws.
Few states have eased the norms like Karnataka amended the Factories Act, to allow women to work in night shifts at factories and allows employees who put in 12 hours a day for four working consecutive days ( but not exceeding 48 hours a week) to take off for three days in a week. The women can work between 7 pm and 6 am, but it is subject to a list of safety measures that are required to be put in place by employers. The bill also allows the government to fix work hours for overtime duty during which workers have to be paid wages at the rate of twice the ordinary rate of wages.
The majority of the apparel factory owners in Bengaluru so far have not executed any such change in their working as they have not felt any such requirement till date.
Similarly, Tamil Nadu state assembly passed the Factories (Tamil Nadu Amendment) Act, 2023 which allows workers to opt for 12-hour shifts for four days per week, and get three days off, but later the state has put it on hold as the amendment sparked protests from workers who feared that it would compromise proper working hours and expose them to exploitation.
| “The labour code were in the favour of industry as well as workforce and it could remove the complexities of old labour laws, make overall compliance easy. India should must implement this but now as things are uncertain there may be again a new brain storming as and when work again starts on these labour codes.” Rakesh Parmar Founder HR Ignite (HR and labour laws expert) |
Though various trade bodies even appealed to Chief Minister M.K. Stalin to permit flexible work timings for exporting industries, changes could not take place on the ground level.
In fact, a recent report published by the International Labour Organization (ILO) stated that flexible work timings will bring benefits to economies, businesses and workers, improve productivity and work-life balance. Though the textile and apparel industry is not very vocal on these issues, a major segment of the industry feels that putting the reforms on hold will hamper its growth.
With regard to the textile and apparel industry, certain key labour reforms were undertaken by the Government almost eight years ago like Employee Provident Fund (EPF) being made optional for employees earning less than Rs. 15,000 per month, increase in overtime limit for workers in the apparel industry from 50 hours to 100 hours per quarter, introduction of Fixed-term Employment and so on.
