Upcoming Labour Codes

India is on the path to significant labour reforms aimed at promoting Ease of Doing Business. These reforms represent a major step toward reducing bureaucratic hurdles, simplifying compliance, and curbing the outdated ‘Inspector Raj’. The objective of the new Labour Codes is to align labour laws with the evolving needs of both employers and workers, ensuring flexibility, fairness, and transparency in the labour ecosystem.

These reforms are designed to ensure that workers receive timely payment of minimum wages and that their health and safety at the workplace are adequately protected. By improving workplace conditions and ensuring legal clarity, these codes are expected to contribute positively to overall economic development.

Since labour is a subject in the Concurrent List of the Constitution, both the Central and State Governments are required to formulate rules under these Codes. The Central Government has undertaken the task of rationalizing and consolidating the numerous existing labour laws into four comprehensive Labour Codes. Though passed by Parliament, these Codes are yet to be fully notified and implemented.

The four major Labour Codes are:

1. Code on Wages, 2019 – Consolidates laws related to wages and ensures uniformity in minimum wage payment across sectors.

2. Industrial Relations Code, 2020 – Focuses on simplifying dispute resolution, improving industrial harmony, and streamlining trade union regulations.

3. Occupational Safety, Health and Working Conditions Code, 2020 – Aims to ensure safe and healthy working conditions for all workers across sectors.

4. Code on Social Security, 2020 – Integrates various social security schemes to extend protection to more workers, including those in the unorganized and gig economy.

Once implemented, these Codes are expected to modernize India’s labour framework, balancing the rights of workers with the needs of businesses.