Welcome to the second edition of the e-Bulletin (Volume VII) brought to you by the Employment, Labour and Benefits practice group of Khaitan & Co. This e-Bulletin covers regulatory developments (including those relating to the upcoming labour codes), case law updates and insights into industry practices that impact businesses from a sector agnostic standpoint.
Labour Codes: Story So Far
In this section, we help you in understanding the developments that have taken thus far on the implementation of the 4 labour codes on wages, social security, industrial relations, and occupational safety, health, and working conditions, which received the Presidential assent between the years 2019 and 2020.
Broadly speaking, the labour codes, which aim to consolidate and consequently replace 29 Central labour laws, are yet to be brought into force, barring provisions relating to:
- Employees' pension fund
- Central Advisory Board on minimum wages
- Identification of workers and beneficiaries through Aadhaar number for social security benefits
Moreover, even if the codes are fully brought into effect, the same would require the issuance of rules, schemes, and notifications of the relevant governments so as to have a comprehensive revised compliance regime.
Under the labour codes, the 'appropriate government' for an establishment can be the Central Government or the state government, depending on the nature of its operations or the existence of multi-state operations. Such appropriate government has the power to inter alia issue rules detailing some of the substantive aspects broadly set out under the codes and also prescribing procedural compliances such as filings, maintenance of registers, etc. In the past year, several key industrialised states such as Haryana, Delhi, Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka released draft rules under some or all of the labour codes for public consultation. As of now, 4 out of a total of 36 states and union territories are yet to publish draft rules on the code on wages, while 5 states have not released draft rules on code on industrial relations, social security and occupational safety, health and working conditions.
Further, the Ministry of Labour and Employment convened a virtual meeting on 30 December 2024, to deliberate on social security schemes for gig and platform workers. In pursuit of establishing comprehensive social security coverage for such workforce, a special session was organized with a committee of experts to assess the available options. During the meeting, existing social security schemes for unorganized workers were evaluated alongside welfare benefits extended to the organized sector. The discussion emphasized on aligning the efforts with the mandate of the Code on Social Security, 2020, focusing on areas such as life and disability coverage, health and maternity benefits, old age protection, and childcare facilities. The committee was tasked with analysing flagship schemes of the Central Government as well as those catering to the organized sector to propose a robust and inclusive framework for social security for the gig and platform workers.
Additionally, the Union Budget 2025 highlighted that gig workers associated with online platforms play a crucial role in driving dynamism within the modern services economy. Recognizing their contributions, the Central Government will facilitate issuance of their identity cards and registration on the e-Shram portal along with entitlement to healthcare benefits under the Pradhan Mantri Jan Arogya Yojana (health insurance scheme providing financial protection for secondary and tertiary healthcare).
The Union Labour Minister recently convened a two-day conference with representatives from all states and union territories to discuss the final steps in drafting the rules for the implementation of the four labour codes, along with reforms aimed at boosting employment. During the conference, the Ministry of Labour and Employment (through the Union Labour Minister) directed all states to finalize their draft rules by 31 March 2025. Additionally, West Bengal committed to framing its draft rules while also engaging in discussions on broader reforms to enhance employment opportunities and address the needs of the ever-expanding working age population.
In the case of Indian Federation of Application-Based Transport Workers (IFAT) v Union of India and Others Writ Petition (Civil) Number 1068 of 2021, the Supreme Court while addressing concerns regarding the delay in implementing the Code on Social Security, 2020, has directed the Central Government to file an affidavit specifying the timeline for the implementation of the Code on Social Security, 2020.
Regulatory Updates
In this section, we bring to your attention, important regulatory developments in the form of notifications, orders, bills, amendments, etc. witnessed in the past one month in the context of employment and labour laws.
To foster investment, generate employment, and enhance workforce development, the Government of Karnataka introduced the Karnataka Industrial Policy 2025-2030
The Government of Karnataka, on 11 February 2025, introduced the Karnataka Industrial Policy 2025-2030 to attract investments and generate approximately twenty lakh jobs during the policy period. The policy aims to position Karnataka as a leader in the sunrise and new-age sectors by focusing on innovation-driven industries such as advanced manufacturing, aerospace and defence, future mobility, and virtual reality.
A key focus of the policy is fostering workforce inclusion, particularly increasing women's participation, to leverage human capital for economic growth and innovation. Additionally, it emphasizes the development of future-ready talent through comprehensive skilling and training initiatives. This includes increasing the adoption of Industrial Training Institutes in collaboration with the industry by developing curated curriculum with industry leaders and conducting skill-gap studies within key manufacturing clusters. The policy sets thresholds for minimum employment for establishments to avail benefits or subsidies, with additional incentives for industries providing extra employment, and offers higher benefits for micro, small, and medium enterprises that employ individuals from special categories such as SC / ST, women, minorities, physically challenged individuals, and ex-servicemen. Further, the policy also prioritizes refresher training for trainers to streamline skilled labour sourcing, ultimately enhancing Karnataka's industrial growth and global competitiveness, among other initiatives.
Meghalaya introduces 'Online Single Window System' (OSWS) to streamline business regulations and labour law compliances
Through a notification dated 5 February 2025, the Government of Meghalaya to simplify business regulations, to enhance ease of compliance with labour laws, and to ensure transparency and accountability in information dissemination and implementation, has introduced the OSWS. This system facilitates the issuance of registrations and licenses under various labour laws, including the Contract Labour (Regulation and Abolition) Act, 1970, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 and Meghalaya Shops and Establishments Act, 2003 etc.
The OSWS portal enables users to submit online applications, make payments, track application status, download certificates, licenses, and other documents, thereby eliminating the need for physical submission. Applicants will receive SMS / email notifications at every critical stage of processing. Additionally, the government has implemented a 'Single Integrated Return' system for all relevant labour laws. Under this system, contractors, principal employers, and establishments in Meghalaya must submit annual returns through the online platform. To further enhance transparency, an online dashboard will be introduced, displaying real-time data on applications received, approvals granted, processing time, and associated fees. This initiative aims to improve efficiency, reduce bureaucratic delays, and boost compliance with labour regulations.
Draft of Haryana Transgender Persons (Protection of Rights) Rules, 2024 (Transgender Persons Rules) published by Government of Haryana
By way of a notification dated 31 January 2024, the Haryana Government published the draft Transgender Persons Rules in the Official Gazette under Section 22 of the Transgender Persons (Protection of Rights) Act, 2019. The draft rules are to be considered final after 30 days from their publication in the Official Gazette, along with any objections or suggestions received from the public. The proposed rules outline provisions for obtaining identity certificates for transgender persons, procedures for communication in case of application rejection, the right to appeal, and the cancellation of issued certificates. Additionally, the proposed rules include welfare measures, anti-discrimination provisions, guidelines for establishments to ensure equal opportunities, and a grievance redressal mechanism for transgender individuals.
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