India’s effort to transform its labour regulatory landscape with four new labour codes, starting from the Occupational Safety, Health and Working Conditions Code, Code on Wages, Industrial Relations Code, to the Code on Social Security, was aimed at streamlining compliance, increasing investments, and consolidating dispersed laws, such as the Factories Act 1948. However, some states are lagging in implementing the necessary regulations under these codes.
Why are States Delaying Draft Rules Under the New Labour Codes?
Indian Factory Act reforms require the Centre and states to pre-notify and elaborate on rules before codes become enforceable. But according to the Union Labour Ministry, some states, such as West Bengal, Tamil Nadu, Delhi, Meghalaya, and Nagaland, have not pre-published rules for all four codes. Without states publishing rules for major elements such as the Factories Act labour law provisions, the new system is incomplete.
Reasons include:
- Simultaneous duties: Labour laws are placed on the concurrent list, thus, central as well as state governments have to take action, and procrastinations on either side slow down progress.
- Harmonisation issues: The Centre is keen on harmonised rules among states, while state-written rules might be anti-code in nature.
- Stakeholder coordination gaps: States can’t have finalized rules because of a lack of adequate stakeholder consultation, especially impacting industries that depend on the Factories Act 1948 for operational clarity.
What This Delay Means for Manufacturing Units
1. Uncertainty in Compliance
Production HR and operations departments rely on explicit guidelines, particularly for the Factories Act 1948 and its safety, working hours, and facilities provisions. In the absence of adequate rules under the indian Factory Act or overtime rules in Maharashtra, it’s difficult to determine whether previous or current norms, respectively, are applicable, leading to higher legal risks for employers.
2. Delayed Ease of Doing Business Benefits
The reform merges old provisions into comprehensive frameworks. Nonetheless, until rules are live, employers won’t be able to take advantage of streamlined compliance, single registration, or single return gains enshrined in new labour codes.
3. Opacity on Overtime Management
In Maharashtra, for example, overtime regulation in Maharashtra is crucial to balancing production requirements and compliance, and without new legislation, uncertainty exists, whether employers remain under the Factories Act 1948 with its codified overtime system or wait for new levels under the new codes.
4. Strategic Planning Challenges
Production facilities need clarity to schedule shift patterns, overtime allowances, leave cycles, and workforce strategy. HR leaders and CEOs must go slow or face the risk of non-compliance since regulatory flux continues.
What Can Employers Do in the Interim?
- Adhere to current norms under the Factories Act 1948, particularly for working hours, rest breaks, and rates of overtime. Stay within the Factories Act labour law until new regulations are available.
- Track the state labour department notification updates when rules come out under the new codes. This allows timely adjustment and reduced disruption once rules are published.
- Implement strong internal policies that adhere to the highest standards, such as following overtime regulations in Maharashtra, even if not yet enforced, to foster a culture of proactive compliance.
- Hire legal advisors and consultants with expertise in industrial labour laws to decipher intersections among the Indian Factory Act, new codes, and current norms. Prioritise adaptable policy designs that are poised to integrate new rules as they emerge.
Conclusion
The lag in states issuing draft rules under the new labour codes, especially regarding the Factories Act 1948, generates a grey area for manufacturing employers. Lacking definition on working time, norms on overtime, and security rules, HR staff cannot even shift with confidence to the revised system. As managers, you need to continue adhering to legacy legislations such as the Factories Act labour law while gearing your organisation with flexible rules and legal counsel. Staying ahead of the rule changes helps you preserve compliance, defend operations, and be prepared when states complete the new labour code picture.
FAQs
Q1: Why does the state delay in publishing labour code rules matter for manufacturing units?
Until the rules become operative, employers have to abide by older legislation such as the Factories Act 1948. But clarity issues arise regarding overlaps with new codes, resulting in legal vulnerability and increased compliance complexity.
Q2: Which rules under the indian Factory Act should manufacturing HR follow until new codes are notified?
HR should continue on adhering to current mandates regarding working hours, overtime compensation, rest periods, safety standards, leave policies, and seating arrangements according to the Factories Act.
Q3: How can employers keep up-to-date and prepare for rule implementation?
Develop liaisons with state labour agencies, track developments for your state, and have flexible policies. Also, involve labour law consultants who recognise both the Factories Act labour law heritage and the direction of new labour codes.