QUICK OVERVIEW
India has officially announced the nationwide implementation of the Four Labour Codes—Wages, Industrial Relations, Social Security, and Occupational Safety & Working Conditions—replacing 29 existing labour laws. These reforms aim to simplify compliance, improve worker protection, and modernise India’s labour ecosystem to support a dynamic economy and Aatmanirbhar Bharat.
Introduction
India has rolled out all four consolidated Labour Codes to streamline the country’s labour laws. These codes—based on the recommendations of the 2nd National Commission on Labour (2002)—aim to unify wage rules, enhance social security, improve industrial relations, and ensure safer working conditions.
Key Provisions of the Four Labour Codes
1. Code on Wages, 2019
Introduces a universal minimum wage.
Government to set a statutory floor wage.
Ensures gender neutrality including transgender workers.
Overtime mandatory at 2x wage.
Simplifies payment structures and ensures timely wage payment.
2. Industrial Relations Code, 2020
Introduces fixed-term employment with benefits equal to permanent staff.
Companies must provide 15 days’ wages to retrenched workers for re-skilling.
Union with 51% membership becomes the negotiating union.
Mandatory women’s representation in grievance bodies.
3. Code on Social Security, 2020
Uniform definition of wages (basic + DA + retaining allowance).
Extends ESI nationwide, including for hazardous occupations.
EPF inquiries time-bound (max 5 years initiation).
Recognises gig workers, platform workers and mandates aggregator contributions.
Creates a Social Security Fund.
Travel-related accidents included in employment injury.
4. Occupational Safety, Health & Working Conditions Code, 2020
Applies even to establishments with one worker if the job is hazardous.
Expands definition of inter-state migrant workers.
Allows women to work at night with safety measures and consent.
Working hours: 8 hours/day or 48 hours/week.
Establishes a National Worker Database.
Why Labour Law Reform Was Needed
29 overlapping laws created confusion and compliance burden.
Old laws unsuitable for gig economy, fixed-term roles, digital workplaces.
MSMEs faced licensing and paperwork hurdles.
Huge mismatch in worker coverage across sectors.
Needed for global competitiveness and foreign investment.
Aimed to boost formalisation, job creation, and welfare.
Concerns and Challenges
1. Higher Burden on MSMEs
Expanded ESI/PF and safety norms increase costs.
Need investment in HR systems and new compliance structures.
2. Centre–State Coordination Issues
Labour is in Concurrent List → potential for differing state rules.
Possible confusion, legal challenges, uneven protections.
3. Union Recognition & Strikes
51% single-union rule may marginalise smaller unions.
Concern that strike approval restrictions weaken collective bargaining.
4. Awareness Gap
Informal and migrant workers may not understand rights under new codes.
5. Fixed-Term Employment (FTE) Risks
Possible overuse → job insecurity.
Courts may receive more cases on disguised permanent employment.
6. Hiring Transition Delays
Businesses may pause hiring during implementation.
Constitutional Angle
Preamble
Guides labour laws towards justice, dignity, equality, and protection of vulnerable groups.
Fundamental Rights Relevant to Labour
Right | Articles | Link to Labour |
|---|---|---|
Equality | 14–18 | Equal pay, non-discrimination |
Freedom | 19–22 | Right to form unions |
Against Exploitation | 23–24 | Ban on forced & child labour |
Life & Liberty | 21 | Safe & dignified working conditions |
Remedies | 32–35 | PILs for labour rights |
Key Judgements:
Bandhua Mukti Morcha (1984) – dignity includes labour rights.
PUDR (1983) – below-minimum wage = forced labour.
Neerja Choudhary (1984) – rehabilitation of bonded labour.
Way Forward
1. Harmonise Centre–State Rules
Model rulebooks and inter-government coordination mechanisms needed.
2. Prevent Misuse of Fixed-Term Contracts
Audits, grievance mechanisms, and stricter guidelines.
3. Strengthen Gig Worker Security
National policy, aggregator contributions, portable benefits.
4. Support MSMEs
Digital filing systems
EPF support schemes
Training & facilitation centres
Conclusion
India’s Four Labour Codes represent a landmark shift in labour governance—modernising regulations, improving worker protection, and simplifying compliance. The challenge lies in balanced implementation, ensuring businesses stay competitive while workers receive strong and uniform safeguards across the country.
CLAT / UPSC EXAM RELEVANCE
UPSC Prelims
Codes: Wages, IR, Social Security, OSH
Concepts: floor wage, gig worker, platform worker
Articles 14, 19, 21, 23, 200, 201
Labour Bureau functions
Constitutional doctrines: Separation of Powers, Federalism
UPSC Mains
GS2:
Centre-State relations in labour laws
Constitutional principles shaping labour policy
GS3:
Employment generation
Labour reforms & formalisation
MSME sector compliance challenges
Gig economy regulation
CLAT Legal Aptitude
Employer–employee relations
Workers’ rights (wages, safety, social security)
Interpretation of statutory consolidation
Fixed-term employment legality