Prof Biju Varkkey and Dr Shailaja Tripathi
With the official announcement on November 21, 2025 the four Labour Codes heralded start of a new era, signalling a major structural overhaul for India’s labour law regime. As expected, it invited both bouquets and brickbats. The much-anticipated labour law reforms consolidated more than 29 central labour legislations into four comprehensive codes.
The demand for reforming Indian Labour Laws has a long past, and over time there has been announcements but limited, at best piecemeal implementation. All stakeholders agree that a productive, inclusive and empowered labour force and a suitable operative environment was necessary to take the country forward. While the desire for change was shared, understandably each stakeholder had expectations and concerns.
The objectives of the exercise include improving worker welfare, simplifying compliance, aligning the labour regulation framework with contemporary economic and social realities and providing a booster shot to the larger set of initiatives taken to improve ease of doing business. Apart from consolidating the 29 important legislations into four codes representing Wages, Social Security, Occupational Health and Safely and Industrial Relations, the reformed framework aims to formalize employment, extend social security to informal, gig, and platform workers, promote gender rights, and modernize employer–worker relations across sectors.
The new labour codes have certain distinct characteristics that align them with present and future requirements of the labour landscape.
Consolidation and Harmonisation: Historically, India’s labour laws were marked by fragmentation, multiple definitions, and rigid compliance mechanisms. Employers faced overlapping regulatory requirements, while many workers remained outside statutory protection. The new framework replaces this complexity with uniform definitions, digital processes, and broader coverage.
Embedding Decent Work Principles: The reforms incorporate the International Labour Organisation’s decent work principles, including quality employment, protection of workers’ rights and equality, social security, and social dialogue.
Compliance Simplification: The legacy system was burdened by excessive filing, over-reliance on inspections, and weak enforcement. The new codes introduce streamlined compliance mechanisms and stronger penalties to deter violations.
Alignment with Sustainable Development Goals: The codes advance SDG 8 and support SDGs 1, 3, 5, and 10 by strengthening labour rights, expanding social security, and encouraging inclusive growth.
Incorporating Future of Work Requirements: Recognising rapid economic and technological change, the codes address future-of-work concerns through expanded definitions, retraining provisions, wider social security coverage, and formalisation of alternative work arrangements.
Salient Features of the Codes and Their Impact:
The Code on Wages, 2019: This Code integrates four earlier laws and introduces a uniform definition of “wages” and the concept of a national floor wage. It ensures wider and more consistent wage protection, mandates timely payment, and reinforces equal remuneration, strengthening income security and reducing disputes.
The Industrial Relations Code, 2020: The Code consolidates laws on trade unions, industrial disputes, and standing orders. It streamlines dispute resolution, introduces defined timelines, and rationalises rules on strikes, layoffs, and retrenchment. While providing employers greater flexibility, it retains safeguards for collective bargaining and legal remedies.
The Code on Social Security, 2020: This Code marks a major shift by extending coverage beyond the organised sector. Gig workers, platform workers, and the self-employed are included within statutory welfare schemes relating to provident fund, insurance, maternity benefits, and old-age security.
The Occupational Safety, Health and Working Conditions Code, 2020: The OSH Code integrates multiple safety laws into a unified framework. It standardises workplace safety norms, strengthens regulatory oversight, and improves enforcement across sectors.
What lies ahead?
A recent perception study of employers and employees about the new labour codes, conducted by V V Giri National Labour Institute shows that the Codes have evoked positive response about a better future. While 64% of workers believed that income security will increase with Codes’ implementation, employers also recorded similar sentiments when it came to Fixed term Employment contracts (64%) and workplace safety (73%). Both stakeholders consider the codes as an instrument that improves experiences of both sides.
The four Labour Codes mark a historic transition in India’s labour governance. By consolidating outdated laws, expanding social security coverage, and balancing employer flexibility with worker protection, the reforms aim to create a more efficient, inclusive, and growth-oriented labour market. The Codes being at the early stages of implementation, it is necessary that all stakeholders approach them with an open mind, and a fail-fast and recover-early attitude. The ultimate success will depend on effective implementation, creating awareness among stakeholders, and consistent execution in line with constitutional values and international labour standards.
Prof Biju Varkkey is Faculty Member, IIM Ahmedabad
Dr Shailja Tripathi is Researcher, WageIndicator
