Welcome to the third 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.
Karnataka Government introduces the draft Karnataka Factories (Safety Audit) Rules, 2024 (Factory Audit Rules)
By way of a notification dated 1 February 2025, the Karnataka Government has published the draft Factory Audit Rules in the Official Gazette which is applicable inter alia to factories engaging more than 50 workers and factories undertaking hazardous activities. The proposed rules outline (i) standards for conducting safety audits; (ii) the qualifications required for safety auditors; (iii) requirement of the occupiers to notify authorities before commencing a safety audit; and (iv) requirement of the safety auditors to submit audit reports. Additionally, the draft Factory Audit Rules provide for re-audits in cases where authorities find the reports unsatisfactory and also provide exemptions for certain establishments from the applicability of the draft Factory Audit Rules.
Haryana Government revises the quantum of labour welfare fund contributions
Through a notification dated 7 March 2025, the Haryana Government has revised the rates for employees and employers concerning the deposit of labour welfare fund contributions, effective from 1 January 2025.
As per the amendment, the maximum limit for the employees' contribution has been increased to INR 34, calculated at the rate of 0.2% of their monthly salary, wages, or remuneration, from the previous limit of INR 31. Consequently, the employers' contribution for each employee will be calculated at twice the employee's contribution, will be maximum of INR 68.
Tamil Nadu declares export-oriented industrial units and special economic zones (SEZ) based industrial units as public utility services (PUS)
Through a notification dated 12 March 2025, published by the Government of Tamil Nadu in Official Gazette has declared all industrial units whose entire production is exported and the units located in the SEZ, to be considered as PUS for the purposes of applicability of the Industrial Disputes Act, 1947 (IDA). This classification will remain in effect for a period of 6 months from the date of publication of notification in the Official Gazette. This notification assumes relevance because Section 22 of the IDA provides special protection to organisations notified as PUS, vis-à-vis strikes by workmen employed with such PUS. As per the same, no employee working in a PUS is permitted to go on a strike without providing the employer with prior notice in the prescribed manner as set out in the IDA.
Andhra Pradesh exempts information technology enabled services (ITES) and information technology establishments (ITE) from certain provisions of the Andhra Pradesh Shops and Establishments Act, 1988 (Andhra Pradesh S&E Act)
As per the notification dated 25 March 2025, published in the Official Gazette, the Government of Andhra Pradesh has introduced exemptions under the Andhra Pradesh S&E Act, effective for 5 years commencing from 25 March 2025, applicable to ITES and ITE operating in Andhra Pradesh.
Through this notification, the applicability of Sections 15 (opening and closing hours of establishment), 16 (spread over hours of work), 21 (employment of young persons), 23 (employment of women), 31 (other holidays) and 47 (1), (2), (3) and (4) (conditions pertaining to termination of employment of an employee and payment of service compensation) on all ITES and ITE has been done away with i.e., employers engaged in these sectors are no longer required to ensure compliance with these provisions vis-à-vis their employees based in the state of Andhra Pradesh. However, this exemption is subject to the employer ensuring compliance with the stipulated working hours, ensuring adequate safety measures for women working in the night shifts, adopting adequate welfare measures for employees, providing employees with weekly and compensatory offs, etc.
Additionally, the government reserves the right to revoke these exemptions if any conditions are violated or found to be detrimental to the welfare of the employees
Maharashtra Government has introduced Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) (Amendment) Act, 2025 (Amendment Act)
By way of a notification published in the Official Gazette dated 19 March 2025, the Government of Maharashtra has introduced the Amendment Act. The Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969 (Mathadi Act) regulates the provisions concerning employment of unprotected manual workers, including mathadi workers and hamals engaged in loading, unloading, and related tasks in Maharashtra.
The Amendment Act introduces several key changes, notably defining 'manual work,' which was previously undefined in the Mathadi Act. Manual work is defined as any physical labour performed without machine assistance, including tasks such as loading, unloading, stacking, carrying, weighing, and measuring in scheduled employments. Furthermore, the definition of an 'unprotected worker' has been expanded to expressly include mathadi workers and hamals while excluding those engaged in manufacturing processes within factories, establishments, or industries where tasks are performed using mechanical, automated, or machine-assisted procedures. Another significant change is the increase in the minimum working age from 14 to 18 years, ensuring child labour protections.
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