Labour Codes: A Step Backwards for Workers’ Rights
Bruhaspati Samal
India’s labour landscape is undergoing a major transformation with the government’s decision to implement four consolidated labour codes from April 1, 2025. This move aims to streamline the country’s existing labour laws by subsuming 29 of the 44 existing legislations into four broad codes while abolishing 15 other laws entirely. The legislative process of passing these codes took place in multiple stages. The first step occurred in August 2019, when the Code on Wages was introduced and passed. This was followed in September 2020 by the passage of the remaining three codes: the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health, and Working Conditions Code. These laws were passed in Parliament even as opposition parties boycotted the proceedings due to unrelated issues, raising concerns about inadequate parliamentary scrutiny. The President granted assent to all four codes in the same month, officially enacting them into law.
Despite being enacted in 2020, the implementation of these labour codes was repeatedly delayed due to resistance from workers and trade unions. Now, with the announcement of their enforcement from April 2025, opposition has reignited, with workers arguing that these codes reduce their rights and make them more vulnerable to exploitation. The government claims this will modernize India’s labour framework and improve the ease of doing business. However, this transition has been met with strong opposition from various trade unions and independent federations, who argue that these new codes dilute crucial worker protections, reduce job security, weaken collective bargaining, limit the right to strike and instead favor employers. This concern has sparked widespread protests, with trade unions demanding a rollback of the new laws and the restoration of previous safeguards.
One of the major criticisms against the government’s handling of the labour codes is the lack of proper consultation with trade unions before their enactment. The All India Central Council of Trade Unions (AICCTU) has pointed out that the government abandoned the traditional practice of holding inclusive discussions with all trade unions. Instead, selective consultations were held, excluding key stakeholders from the decision-making process. Furthermore, the Indian Labour Conference, which is the highest tripartite forum involving the government, employers, and workers, has not been convened for over a decade. This has further sidelined workers’ voices in shaping policies that directly affect their livelihoods. Labour unions argue that such an exclusionary approach has led to the creation of laws that overwhelmingly favor employers at the expense of workers.
Under the previous system, labour laws provided specific and detailed protections tailored to different sectors and industries. For example, the Factories Act ensured strict safety regulations for factory workers, while the Plantation Labour Act provided specific benefits for tea plantation workers. Similarly, the Industrial Disputes Act laid down clear mechanisms for resolving workplace conflicts, giving workers legal avenues to challenge unfair dismissals and demand better working conditions. By contrast, the new labour codes attempt to generalize these provisions, which has resulted in a dilution of worker protections. One of the biggest points of contention is that the Industrial Relations Code makes it easier for companies to hire and fire employees, which could lead to increased job insecurity, especially in the manufacturing sector. This provision is seen as an attempt to weaken trade union movements and curtail workers' ability to demand better wages and working conditions.
The older laws also provided strong safeguards against arbitrary dismissals. The Industrial Disputes Act mandated that companies with more than 100 employees obtain government approval before laying off workers. However, under the new Industrial Relations Code, this threshold has been increased to 300 employees. This means that thousands of workers in medium-sized enterprises will no longer have legal protection against sudden terminations, making them vulnerable to exploitation. Additionally, the new labour codes reduce the bargaining power of trade unions. Previously, the Trade Unions Act allowed multiple unions within an organization to engage in collective bargaining. The new Industrial Relations Code, however, restricts collective bargaining rights by requiring that only unions with a 51% majority representation can negotiate with employers. This change significantly weakens the ability of smaller unions to advocate for workers’ rights.
Another major concern is the impact of the Social Security Code. While it claims to expand social security benefits to informal sector workers, many trade unions argue that its implementation lacks clarity. Unlike the previous system, where Employees' State Insurance (ESI) and Provident Fund (EPF) contributions were mandatory for eligible workers, the new system makes social security schemes more discretionary. This could lead to reduced employer contributions and increased financial insecurity for workers.
Workplace safety is another area of concern. The previous framework, through laws like the Factories Act and Mines Act, had stringent safety standards to protect workers in hazardous industries. The new Occupational Safety, Health, and Working Conditions Code consolidates these laws but also introduces more flexible provisions that allow state governments to exempt certain establishments from compliance. This relaxation of safety regulations increases the risk of workplace accidents and undermines worker welfare.
The transition from 44 labour laws to 4 consolidated codes represents a significant shift in India’s labour policy. While the government argues that the new laws simplify compliance and promote economic growth, trade unions contend that these changes weaken essential worker protections and tip the balance of power in favor of employers.
By making it easier for companies to hire and fire employees, restricting the right to strike, weakening trade union representation, and making social security benefits less accessible, the new labour codes mark a step backward in safeguarding workers' rights. The widespread protests and opposition from labour organizations indicate that the new laws have failed to gain the confidence of the very workers they are supposed to protect.
As the implementation date of April 1, 2025, approaches, the government faces increasing pressure to address these concerns. If left unaddressed, these labour codes could lead to growing unrest among India’s workforce, with trade unions continuing to demand a rollback of the reforms in favor of stronger legal protections for workers.
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(The author is a Service Union Representative and a columnist. eMail: samalbruhaspati@gmail.
