Prof Virender Koundal
virender_koundal@rediffmail.com
India stands at an inflection point in its economic and social development. On 21 November 2025 the Government of India brought into force four comprehensive Labour Codes – the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020 consolidating and replacing 29 central labour laws. This historic shift in labour governance is meant to simplify regulation, extend welfare and legal protections to millions of workers across formal and informal sectors, and create an enabling environment for enterprise, innovation and investment. The move forms a critical pillar of the nation’s drive towards Aatmanirbhar Bharat (self-reliant India) by seeking to make the workforce more protected, productive and future-ready.
For decades, India’s labour regulatory landscape has been characterised by fragmentation, antiquated provisions and overlapping statutes. Multiple laws administered by different authorities created compliance burdens, regulatory uncertainty and inconsistent implementation across states and sectors. This complexity often deterred businesses from formalising employment and constrained productive job creation. Meanwhile, large segments of the workforce especially in informal, gig and platform-based employment remained outside the ambit of social protection, wage parity and workplace safety.
The four Labour Codes address these structural challenges with a clear rationale: (1) to streamline and modernise labour regulation for clarity and ease of compliance; (2) to extend minimum standards of wages, safety, and social security to a far larger share of workers; (3) to adapt legal frameworks to contemporary forms of work (including contractual, fixed-term, gig and platform work); and (4) to balance the legitimate needs of employers to run competitive businesses with the rights of workers to decent work and dignity in employment. In short, the reforms are designed to foster a win-win where labour welfare and industrial growth reinforce each other.
The reforms are broad and structural, touching nearly every aspect of labour governance. They can be summarised under four heads corresponding to the four Codes:
The Code on Wages, 2019: This Code consolidates laws relating to minimum wages, payment of wages and bonus. It seeks to universalise minimum wage protection by covering all workers, abolish ambiguities in definitions, and introduce processes for fixing and revising minimum wages more systematically. It also simplifies the bonus regime and strengthens enforcement mechanisms to ensure timely payment.
The Industrial Relations Code, 2020: This Code consolidates laws governing trade unions, industrial disputes, standing orders and dispute resolution. It introduces clearer rules for formation and recognition of trade unions, prescribes a modern framework for collective bargaining and dispute resolution, and streamlines procedures for layoffs and retrenchments while preserving social safeguards. The Code also envisages improved mechanisms for grievance redressal and industrial harmony.
The Code on Social Security, 2020: Perhaps the most transformative, this Code aims to expand social security coverage pensions, health benefits, maternity and disability benefits, provident fund, gratuity and occupational injury benefits to workers in the unorganised and informal sectors, gig and platform workers, and unincorporated enterprises. It creates pathways for portability of benefits, unified delivery architecture and contributory frameworks adaptable to diverse employment forms.
The Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020: This Code consolidates statutes related to workplace safety, health standards and working conditions across factories, mines, plantations and establishments. It sets uniform standards for occupational safety measures, mandates medical tests and health surveillance, prescribes working hours and rest intervals, and importantly, extends safety norms to previously under-regulated domains and smaller establishments.
The notified Codes include multiple initiatives and specific provisions that have immediate bearing on workers and employers: (1) The Code on Wages extends minimum wage protection to all categories of workers, entrenching the principle of a wage floor that aligns living standards with basic needs; (2) The Code on Social Security provides legal recognition and pathways to enrol hundreds of millions of informal, contractual and gig workers into social protection schemes, including pensions, health coverage and maternity benefits; (3) The Codes strengthen gender parity by explicitly ensuring equal remuneration for men and women for similar work and expanding maternity protections, thereby enabling greater female labour force participation; (4) The OSHWC Code mandates risk assessments, safety audits, and free annual health check-ups for certain categories of workers; it also streamlines reporting mechanisms for workplace accidents and occupational diseases; (5) The Codes modernise compliance through digitised registers, statutory returns, and consolidated inspection regimes; they also propose single-window portals to simplify employer filings and insulate enterprises from multiplicity of inspections; (6) The Industrial Relations Code recalibrates thresholds around layoffs and retrenchment approvals, allowing firms operational flexibility to scale while mandating notice and compensation safeguards for affected workers; (7) The Codes encourage unified databases and portability of social security entitlements across jobs and geographies, a critical step for a mobile labour force.
For workers across the spectrum from factory operatives and construction labour to delivery personnel and shop-floor technicians, the Codes offer multiple advantages: (1) By bringing previously excluded categories within the legal ambit, the Codes expand entitlement to minimum wages, health coverage, maternity benefits and pension schemes, reducing vulnerabilities associated with irregular employment.; (2) Clearer occupational safety norms, mandatory health checks and stricter reporting of accidents will improve on-the-job safety, reduce fatalities and promote a culture of prevention; (3) Digitised registers and consolidated procedures aim to make it easier for workers to claim dues, bonuses and statutory benefits, and to obtain relief in case of disputes or employer lapses.; (4) Strengthened equal pay provisions and maternity benefits can make formal employment more attractive and sustainable for women, thereby helping bridge gender gaps in labour force participation.; (5) Portability of social security and the inclusion of gig and informal workers into contributory schemes provide a safety net against health shocks, old age poverty, and work-related injuries, improving resilience of households and communities.
The Codes are not only worker-centric; they are also designed to catalyse growth, investment and formal job creation key ingredients for a self-reliant economy: (1) Rationalised laws and simplified compliance reduce transaction costs for enterprises, especially for micro, small and medium enterprises (MSMEs) seeking to scale operations. Predictable labour laws lower regulatory risk and improve India’s attractiveness as an investment destination; (2) The legal clarity and incentives for registration and social security participation will encourage formal hiring, widening the tax base and facilitating access to credit for firms and workers alike; (3) With better safety, health and social protection, workers are likely to be healthier, more motivated and more productive, boosting firm-level competitiveness and national output; (4) Extending wages and social security to millions increases disposable incomes and consumption capacity, strengthening domestic demandan important driver of sustained growth under the Aatmanirbhar Bharat vision; (5) More modern industrial relations frameworks provide firms the operational flexibility to adopt new technologies, enter new markets and restructure responsibly, supporting innovation and job creation in sunrise sectors.
Major reforms inevitably raise questions. Critics may worry about the speed of implementation, the capacity of enforcement agencies, state-level adoption, and whether small employers can absorb compliance costs. Three pragmatic steps can mitigate transition challenges: (1) States and central agencies should prioritise capacity building, training inspectors, deploying digital platforms, and rolling out worker enrolment drives in phases aligned with administrative readiness; (2) Targeted compliance assistance, simplified return formats and transitional subsidies for social security contributions can help micro and small firms adapt without loss of competitiveness; (3) Continuous engagement with employers, trade unions and civil society will be essential to fine-tune operational rules, grievance redressal mechanisms and sector-specific norms.
To ensure that the promise of the Codes translates into measurable welfare and growth, policymakers should consider a national enrolment drive for social security with simplified e-KYC and portable identifiers to bring informal workers into beneficiary databases. Clear guidelines and capacity support for states to harmonise implementation while preserving necessary local flexibility.A public awareness campaign to educate workers and employers about rights, obligations and digital portals for claims and filings.A phased inspection and compliance regimen that rewards voluntary compliance and focuses regulatory attention on high-risk sectors.Incentives for firms that formalise employmentaccess to subsidised credit, preferential procurement or tax incentives linked to documented social security coverage.
The notification of the four Labour Codes marks a significant milestone in India’s policy journey. By bringing legal coherence, widening protection, and modernising enforcement, the Codes have the potential to reconcile worker welfare with industrial dynamisman essential combination for Aatmanirbhar Bharat. Implementation will be the acid test: success will depend on administrative capacity, state-centred cooperation, meaningful social dialogue and careful calibration to preserve the interests of vulnerable workers while enabling firms to grow.Ultimately, these reforms offer India an opportunity to create a more inclusive, resilient and productive workforce, one that can power the nation’s ambition for self-reliance, competitiveness and shared prosperity. If implemented thoughtfully and equitably, this new labour architecture could usher in a new era for the nation’s workforce: safer, better-paid, better-protected, and more productive, a workforce truly ready to make India self-reliant.
(The author is from University of Jammu)
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