On Friday, the Centre issued four gazette notifications for the four respective labour code laws passed in 2019 and 2020, these being: Code on Wages, Industrial Relations Code, Code on Social Security and Code on Occupational Safety and Health. These laws will finally come into effect after all these years. But rules regarding administrative and procedural issues remain to be finalised for these codes to be implemented in right earnest; it is hoped that these are readied sooner than later.
The Centre can justifiably claim the unification of 29 labour laws to be a landmark ease of doing business move. Over 1,400 rules have been scrunched into 365, with the compliance formalities in terms of registration, and filling up forms and registers too coming down sharply. Significantly, the codes make an attempt to expand the social security net -- bridging the gap between a 'labour aristocracy' and the rest. To this end, this government can rightly claim credit for the net increase in numbers under the Employees' Provident Fund Scheme. A notable reform move is the creation of a category of 'fixed term employees', apart from regular and contract workers. The FTEs will receive benefits equal to permanent workers after a year of being in the job, except for retrenchment compensation -- bridging the gap between permanent workers and the rest.
All forms of work will be covered under minimum wage laws, and all workers shall receive mandatory employment letters. Women can work at night with the requisite safety measures in place, and without wage discrimination. Significantly, the estimated 10 million gig and platform workers will get social security coverage, from contributions by aggregators. The coverage of Employees' State Insurance Corporation has been expanded to cover all establishments with over 10 employees and not just some notified areas and hazardous industries. So, the codes do not view 'labour reforms' as a race to the bottom. Employers have much to cheer, as self-certification for compliance becomes the norm, and the labour inspector cum facilitator', as the term suggests, exercises powers with due restraint.
But the codes have erred as well. As the Parliamentary Standing Committee on the IR code (April 2020) has observed, the code uses 'workers' and 'employees' interchangeably, creating confusion when they mean the same. This could impact rights' enforcement. Despite efforts at extending social security cover, units employing less than 10 workers on paper will be exempt. The status quo of fragmented production may continue undisturbed, as a maze of contractors evade accountability. Finally, labour flexibility cannot be pushed in the absence of a social safety net in the form of medical cover and provident fund benefits. The codes have sought to strike a balance. But as the House Panel has said, the governance machinery should step up its act. It is for the rules, if not enabling legal provisions, to improve implementation.
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Published on November 23, 2025
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