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Regulatory and Statutory Updates
Draft Central Rules released; consultation initiated under all four Labour Codes
On December 30, 2025, the Ministry of Labour and Employment pre-published the draft Central rules under all four (4) Labour Codes, namely, the Code on Wages, 2019, the Code on Social Security, 2020, the Occupational Health, Safety and Working Conditions Code, 2020 and the Industrial Relations Code, 2020. These draft rules have been released for public consultation and are open to objections and suggestions for a period of forty-five (45) days from the date of publication. For the draft rules under the Industrial Relations Code, 2020, however, the consultation period is thirty (30) days.
The draft rules introduce several granular prescriptions that directly affect day-to-day workforce management. These include newly defined exclusions for gratuity calculations, formats of appointment letters and wage slips to be issued to employees, a separate grievance redressal mechanism for contract labour, detailed standards for crèche expanded arrangements, facilities recognition and across of timelines establishments, flexible and work related obligations for employer contributions to the worker re-skilling fund.
Ministry of Labour and Employment issues notification providing clarity on adjudication mechanisms under the Industrial Relations Code, 2020; Labour Courts and Tribunals under the Industrial Disputes Act, 1947 shall continue to operate until Tribunals under the Code are set up
The Ministry of Labour and Employment issued a notification dated December 08, 2025 (Industrial Relations Code (Removal of Difficulties) Order, 2025) confirming that the existing Labour Courts, Industrial Tribunals and National Industrial Tribunals constituted under the Industrial Disputes Act, 1947 ("ID Act, 1947") shall continue to adjudicate the existing as well as new cases, for the purpose of ensuring continuity of adjudication and avoiding any legal or administrative vacuum until the constitution of Industrial Tribunals and National Industrial Tribunals under the Industrial Relations Code, 2020 ("IR Code, 2020").
Upon being successfully constituted, the matters shall be transferred from the authorities under the ID Act, 1947 to those under the IR Code, 2020, and they shall decide whether the cases are to be dealt with de novo (afresh) or from the stage at which they were pending before such transfer, as it may deem fit.
Punjab published draft rules under the Labour Codes; draft rules relating to industrial relations, social security and wages released for public consultation
The Department of Labour, Government of Punjab on December 29, 2025, published draft rules under the three (3) Labour Codes, namely, the Code on Wages, 2019, the Code on Social Security, 2020 and the Industrial Relations Code, 2020. These draft rules have been released for public consultation and are open to objections and suggestions for a period of thirty (30) days from December 29, 2025. The draft rules provide much needed clarity on key aspects under the Labour Codes, including contributions to the worker re-skilling fund, manner of lay-offs, retrenchment and closure, manner of intimation of deductions from wages, appeal mechanisms, annual reporting obligations, and statutory forms, registers, and records to be maintained.
Maharashtra amends its shops and establishments act by way of ordinance; increases threshold for registration, increases daily working hours, spread-over and quarterly overtime limits
By way of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) (Amendment) Act, 2025 ("Amendment Act"), the Maharashtra Government has amended the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 ("S&E Act") with effect from October 01, 2025.
The following are the salient features of the Amendment Act:
- increase in threshold limit of ten (10) or more employees to twenty (20) or more employees in any establishment for registration and other regulatory provisions of the S&E Act in order to reduce compliance burden for smaller businesses, encourage job creation and eliminate the fear of non-compliance;
- increase in the daily hours of work from the existing nine (9) hours upto ten (10) hours, inclusive of rest intervals, subject to a maximum of forty eight (48) hours in any week;
- extended the spread-over of working hours from the erstwhile ten and a half hours (10 hours, 30 minutes) to twelve (12) hours in a day;
- increase in the maximum continuous working hours without a rest interval from five (5) to six (6) hours;
- increase in overtime period within a quarter from one hundred and twenty five (125) hours to one hundred and forty four (144) hours.
Karnataka Government issues Press Note to invite contributions to the labour welfare fund on the revised contribution rates; employer and employee contributions to be made as per the revised rates by January 15, 2026 and delays will invite a penalty and inspections
The By way of a Press Note issued on December 05, 2025, the Government of Karnataka directed all establishments in the State of Karnataka, including all commercial establishments, IT/BT establishments, factories, plantations, workshops, rental service establishments, and establishments covered under the Karnataka Shops and Commercial Establishments Act, 1961 to deposit employer and employee contributions under the Karnataka Labour Welfare Fund Act, 1965 by January 15, 2026.
Previously, the Government of Karnataka by way of the Karnataka Labour Welfare Fund (Amendment) Act, 2024, had amended the employer, employee, and state government's contributions to the labour welfare fund. The revised contributions are as follows: (i) from INR 20 (approx. USD 0.22) to INR 50 (approx. USD 0.56) by the employee, INR 40 (approx. USD 0.45) by the employer, to INR 100 (approx. USD 1), and INR 20 (approx. USD 0.22) to INR 50 (approx. USD 0.56) by the government.
Delay in payment of contributions will attract penal interest at the rate of twelve percent (12%) for the first three (3) months and afterwards, it shall be eighteen percent (18%) on the due amount. This may also be accompanied by inspections by the Welfare Commissioner/Labour Department Officers and the initiation of legal proceedings for non-payment of contributions.
A private member's bill titled the Right to Disconnect Bill, 2025 is tabled in the Lok Sabha; aims to confer employees across sectors with the right to disconnect from communications after office hours
A private member's bill titled the Right to Disconnect Bill, 2025 ("Bill") has been introduced in the Lok Sabha on December 5, 2025, conferring employees across the country with the right to disconnect from work-related telephone calls and e-mails beyond work hours and on holidays. The Bill also prohibits an employer from taking any disciplinary action against an employee who exercises the right to disconnect and refuses to answer calls or messages out of work hours. A key feature of the Bill is the introduction of an Employees' Welfare Authority that shall ensure and promote employee welfare by adopting a nationwide framework arrangements.
Every company or society with more than ten (10) employees shall charters/policies draft after their individual consultations and negotiations with employees, unions and their representatives, at regular intervals, to decide and specify detailed out-of-work hours, consider diverse work cultures and requirements of different entities and individual employees, their competitive needs and industry practices, when and how to contact them during out-of-work hours and holidays and other permissible exemptions.
Interestingly, if employees volunteer to respond and work beyond working hours, then he/she must be paid overtime at the normal wage rate and not be deprived of this entitlement in any case. Other interesting features of the Bill include the establishment of Employee Welfare Committees, Digital Detox Centres and other welfare measures, including that of providing counselling services, conducting sensitization and awareness sessions, and filing annual reports providing a summary of all the activities and measures undertaken by the organisation.
Readers may read our detailed analysis of the Bill here.
Karnataka amends its Labour Welfare Fund Act, 1965; reduces the applicability threshold and expands the scope of methods of payment
The Karnataka State Legislature introduced the Labour Welfare Fund (Amendment) Act, 2025 (Amendment) on December 10, 2025, to amend the Karnataka Labour Welfare Fund Act, 1965 ("LWF Act") by revising the applicability thresholds and payment mechanisms for better administration.
The Amendment revises the applicability threshold from fifty (50) or more to ten (10) or more, thereby bringing in more establishments within its coverage. The Amendment also expands the scope of payment methods by replacing cheques and demand drafts with digital options like net banking, RTGS, and UPI.
The Bill further enables the State Government to issue orders, within two (2) years of commencement, to resolve any implementation challenges, subject to such orders being consistent with the LWF Act. Each such order must be placed before the Houses of the State Legislature.
To view the full article, click here.
Originally published by Lexology.
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