The subject of Labour, as per the Indian Constitution falls under the Concurrent list, which means both, Union as well as the States have the power to make laws in relation to the same.

The Central Government in the years 2019 and 2020, made the decision to consolidate 29 central labour legislations into 4 broad labour codes i.e., Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Health, Safety and Working Conditions Code, 2020 (Labour Codes) which are currently awaiting the date of implementation. The Labour Codes, inter alia, aim to rationalize wages, systemize matters relating to trade unions and improve compliance. Many states across the country have framed rules in accordance with these Labour Codes.

It was recently reported that the Uttar Pradesh (UP) Government is looking at consolidating all the state labour laws and regulations into one or two labour codes to simplify complex legislations and do away with multiplicity of provisions. The UP Government is of the view that consolidating all the state labour legislations, will bring about an improvement in the working conditions and will improve the ease of doing business in the state. This is following in the footsteps of the Central Government which has consolidated and simplified various central labour legislations into four labour codes.

Currently, in UP, following are the key state labour legislations:

  • The Uttar Pradesh Industrial Undertakings (Special Provisions For Prevention Of Unemployment) Act, 1966
  • Uttar Pradesh Industrial Establishments (National And Festival Holidays) Act, 1961
  • The Uttar Pradesh Shops And Commercial Establishment Act, 1962
  • The Uttar Pradesh Labour Welfare Fund Act, 1965
  • The Uttar Pradesh Industrial Undertakings (Special Provisions For Prevention Of Unemployment) Act, 1966
  • The Uttar Pradesh Industrial Area Development Act, 1976
  • The Uttar Pradesh Industrial Peace (Timely Payment Of Wages) Act, 1978
  • The Uttar Pradesh Employment Of Substitute Workmen Act, 1978

All of these will be subsumed into one or two labour codes.

ELP Comments

The key objective of consolidating the state labour laws is to simplify, amalgamate and rationalize the relevant provisions of the present labour laws. Additionally, the surge of foreign investment into UP (between June 2021 and December 2021, foreign investment in the state surged from USD 712.35 million to USD 788.55 million – (https://bit.ly/3AM6sDt) no doubt will have a positive impact on job opportunities in the state. The UP government has already achieved 108% of the target set under Prime Minister's Employment Generation Programme (PMEGP) for the second quarter of financial year 2022-23, in the first quarter itself (https://bit.ly/3PU32Tr) and the codification of state labour legislations will complement this job growth. This welcome move can be followed by the other leading states as well, such as Haryana, Gujarat, Karnataka, Rajasthan, and Tamil Nadu which create majority of the job opportunities in the market. Further, the codification will harmonize the implementation process of state labour codes vis a vis the central labour codes and will hopefully result in reducing the current complex compliance procedures, levy of penalties, improve working conditions of employees as well as the ease of doing business in the states, which is also the broad intent of the new labour codes. Post implementation, companies operating in UP will have to ensure that they are compliant with the central as well as the state labour codes.

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