West Bengal Set to Implement Labour Codes; Kerala Remains the Only Major Holdout

The Bharatiya Janata Party's recent electoral gains have led to a shift in West Bengal's stance on labour reforms. The state, which had previously resisted implementing the four labour codes, is now preparing to roll them out, according to a senior government official.

With West Bengal moving forward, Kerala is now the only major state that has not yet notified the rules for the codes. However, the official clarified that Kerala is not opposed to implementation but is moving slowly in formalising the process. The change in government from the CPI(M)-led Left Democratic Front to the Congress-led United Democratic Front could open the door for implementation, as the new government has not opposed the codes.

The four labour codes—Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; and Occupational Safety, Health and Working Conditions Code, 2020—were passed by Parliament in 2019 and 2020. The central government notified the codes in November 2020, but states are responsible for framing their own rules under the concurrent list of the Constitution. As of December, 34 of 36 states and union territories had finalised rules for the Code on Wages, Code on Social Security, and Industrial Relations Code.

The previous West Bengal government under Mamata Banerjee had refused to comply, arguing that the codes would deprive many workers of social security. Congress president Mallikarjun Kharge also opposed the codes, citing threats to job security as the threshold for requiring prior government approval for layoffs was raised from 100 to 300 workers, potentially encouraging short-term hiring.

The Centre has assured states that it will resolve all queries regarding implementation. The codes aim to redefine wage components to increase basic pay for better social security contributions, and expand social security provisions for gig workers.