Labour and Employment Quarterly Milestones (January-March 2026)

On 16 March 2026, the Ministry of Labour and Employment issued additional Frequently Asked Questions (FAQ), supplementing an earlier set released on 30 December 2025, to provide practical interpretative guidance on the implementation of the Labour Codes in India.

These FAQs attempt to clarify key concepts, such as the definition and computation of ‘wages,’ permissible exclusions, and thresholds relevant for social security contributions, although some points, such as the treatment of allowances, annual leave encashment, and clarification on exceptions to the core activity restriction, remain unclear. They also address operational aspects, including registration, maintenance of records, treatment of contract labour, and applicability of the Labour Codes to newer categories of workers such as gig and platform workers.

Notably, the FAQs recognise and address industry-specific concerns, including those relating to minimum wages, overtime computation, leave entitlements, and fixed-term employment. However, several interpretational aspects remain unclear and are likely to evolve through practice and regulatory enforcement. The FAQs clarify that where there is an inconsistency between any clarification contained in it and the statutory provisions of the Labour Codes, the statutory framework will prevail, underscoring the advisory nature of the FAQs.

The Kerala High Court upheld the validity of a central government notification allowing the existing labour courts, industrial tribunals, and national tribunals constituted under prior labour laws to continue adjudicating both pending and newly instituted matters until new tribunals are constituted under the Industrial Relations Code, 2020 (IR Code).¹

The petitioners challenged the notification on the basis of Section 51(1) of the IR Code, which provides for the transfer of pending proceedings to the newly established tribunals. They argued that permitting continued adjudication by existing forums was inconsistent with the legislative mandate. However, the High Court agreed with the government’s argument that since the new tribunals were not yet operational, discontinuing existing tribunals would create a regulatory vacuum and disrupt access to justice. It accordingly upheld the notification as a permissible exercise of the government’s power to remove difficulties under Section 103 of the IR Code. It also clarified that continuation of existing dispute resolution forums was not contrary to the legislative mandate but rather facilitated its effective implementation.

This ruling ensures certainty by confirming that existing labour adjudicatory forums will remain functional until the new tribunal framework is fully operationalised, thereby avoiding disruption for employers and employees alike.

The Government of Haryana implemented the Haryana Shops and Commercial Establishments (Amendment) Act, 2025 (Haryana Amendment Act) with retrospective effect from 12 November 2025, to ensure continuity, given that the ordinance previously issued by the Government of Haryana in November had taken effect from that date. The Haryana Amendment Act provides greater operational flexibility to employers in the state by relaxing compliance requirements for smaller establishments and increasing permissible working hours.

The key changes introduced by the Haryana Amendment Act include:

• The provisions of the Haryana Shops and Commercial Establishments Act, 1958, now apply only to establishments with 20 or more workers. Such establishments are required to register online mandatorily. This marks a departure from the earlier position in Haryana, where the law applied irrespective of workforce size and required all commercial establishments to register.
• Establishments with fewer than 20 workers are now required to comply only with a simplified intimation requirement under Section 13A.
• The limit on daily working hours has increased to 10 hours per day from nine hours, along with a requirement that employees must be provided a rest interval of at least half an hour after every six hours of work (as opposed to five hours under the earlier framework). Maximum permissible overtime hours per quarter have increased from 50 hours to 156 hours.

The Haryana Amendment Act also strengthens compliance by mandating the issuance of appointment letters and identity cards and imposing strict digital reporting obligations. Employers in Haryana will need to reassess their operational, documentation, and reporting practices to align with the new and revised provisions.

On 11 March 2026, the Government of Delhi notified the Delhi Shops and Establishments (Amendment) Act, 2026 (Delhi Amendment Act) to provide operational flexibility on working hours and clarify certain existing provisions.

Key changes introduced under the Delhi Amendment Act are:

• Maximum daily working hours have been increased to 10 hours per day (inclusive of rest intervals) from the earlier limit of nine hours per day.
• Weekly working hours have been increased to 60 hours.
• Overtime limits are revised to 144 hours per quarter (previously limited to 150 hours in a year).
• Permissible continuous working period has been increased from five to six hours, and a uniform spread-over limit of 12 hours has been prescribed across establishments.

The Delhi Amendment Act elaborates on provisions governing night shifts for women employees, including the requirement to obtain prior written consent and to implement stringent safeguards such as adequate security, CCTV surveillance, safe transport arrangements, and the presence of at least two women employees during such shifts. These clarifications also enhance compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Supreme Court analysed the constitutional validity of the provisions governing maternity benefits for adoptive mothers and expanded the scope of such benefits under the Code on Social Security, 2020 (SS Code).²

The case involved a constitutional challenge to Section 60(4) of the SS Code, which limited maternity benefits for adoptive mothers to cases where the adopted child was below three months of age. The petitioner contended that this restriction was impractical given the statutory framework under the Juvenile Justice (Care and Protection of Children) Act, 2015 and the applicable adoption regulations, which make it extremely difficult, if not impossible, to complete an adoption within the three-month timeframe.

The Court held that such a classification lacked a rational nexus with the objective of maternity benefits, which is to support motherhood and caregiving, rather than merely childbirth. It observed that adoption entails significant emotional, psychological, and caregiving responsibilities irrespective of the child’s age, and that the provision was impermissibly under-inclusive as it excluded adoptive mothers from availing maternity benefits, who were otherwise similarly situated.

Accordingly, the Court directed that Section 60(4) of the SS Code be read as granting 12 weeks’ maternity benefit to a woman who legally adopts a child or is a commissioning mother, from the date the child is handed over, irrespective of whether or not the age of the child is below or above the age of three months.

This ruling requires employers to revisit leave policies and ensure more inclusive workplaces that support diverse forms of parenthood.

The Supreme Court clarified that the Building and Other Construction Workers Cess cannot be levied and recovered until the Welfare Boards and the mechanism for the levy, collection, deposit, and utilisation of this cess, required under the enabling statutes,³ were set up.⁴ In fact, the effective implementation of the enabling statutes depended on the establishment of such boards.

The dispute in the present case and connected appeals arose from the practice of deducting approximately 1% of project costs as cess under the enabling statutes. The contractors contended that although the statutes were in force and the cess existed, it was not operational at the time of contract execution, as the State Welfare Boards responsible for administering the cess were constituted much later.

Accepting this contention, the Supreme Court held that contractors could not have factored cess into their bids prior to the constitution of State Welfare Boards and the establishment of an effective collection mechanism. The Court found the imposition of cess in such cases amounted to ‘subsequent legislation,’ entitling contractors to reimbursement. Accordingly, the Court upheld the arbitral awards which directed the reimbursement of cess deductions made prior to the establishment of the boards.