IMPLEMENTATIONS OF THE NEW LABOUR CODES IN INDIA: WHETHER IT COULD REFORM THE CODES OR REPACKAGING THE CODES

Abstract

The existing set of labour laws in India has been amalgamated into four broad groups: industrial relations, wages, social security, and occupational safety, health, and working conditions. The Government of India notified and implemented four labour codes, namely the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Code on Occupational Safety, Health and Working Conditions. As of April 11, 2026, there have been 146 layoff events in 2026, impacting 99,283 workers, averaging approximately 983 job losses per day. The Directive Principles of State Policy (DPSP), including Article 38 (duty of the State to secure a social order for the promotion of welfare of the people) and Article 43 (living wage for workers), affirm the State’s obligation to promote social welfare and ensure a living wage for workers. This article examines whether the consolidation of 29 labour laws into four codes represents genuine reform or merely a repackaging of the existing framework.

Keywords: Labour Laws, Code on Wages, Industrial Disputes, Reforms, Repackaging.

I. Introduction

India’s labour law regime has historically consisted of multiple central and state legislations, resulting in a complex and often overlapping legal framework. The Second National Commission on Labour recommended the formulation of labour codes similar to those in developed countries. It suggested that the existing set of labour laws be consolidated into groups covering industrial relations, wages, social security, and occupational safety, health, and working conditions. On November 21, 2025, the Government of India notified and implemented four labour codes, repackaging the existing 29 labour laws into a unified regulatory structure. Whether these codes constitute a truly transformative reform or merely a restructuring of existing laws remains an important question for legal scholars and practitioners alike.

II. Objectives of the Labour Codes

The four labour codes were enacted with the following primary objectives:

1. To provide safety measures for employees working with hazardous machinery.
2. To create a fair and equitable relationship between employees and employers.
3. To protect workers by regulating working hours and conditions, and by preventing exploitation.
4. To improve the welfare of workers through benefits such as health insurance, retirement pensions, and disability compensation.

III. The 29 Labour Laws Before Codification

The four codes were formed by consolidating the following pre-existing legislations:

1. Code on Wages (4 Laws)
Payment of Wages Act, 1936; Equal Remuneration Act, 1976; Minimum Wages Act, 1948; Payment of Bonus Act, 1965.

2. Code on Industrial Relations (3 Laws)
Industrial Disputes Act, 1947; Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946.

3. Code on Social Security (9 Laws)
Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Employees’ Provident Fund and Miscellaneous Provisions Act, 1952; Employees’ State Insurance Act, 1948; Employees’ Compensation Act, 1923; Building and Other Construction Workers Welfare Cess Act, 1996; Cine Workers Welfare Fund Act, 1981; Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959; Unorganised Workers’ Social Security Act, 2008.

4. Code on Occupational Safety, Health and Working Conditions (13 Laws)
Mines Act, 1952; Factories Act, 1948; Dock Workers (Safety, Health and Welfare) Act, 1986; Building and Other Construction Workers Act, 1996; Plantations Labour Act, 1951; Contract Labour (Regulation and Abolition) Act, 1970; Inter-State Migrant Workmen Act, 1979; Working Journalists Act, 1955; Working Journalists (Fixation of Rates of Wages) Act, 1958; Motor Transport Workers Act, 1961; Beedi and Cigar Workers Act, 1966; Sales Promotion Employees Act, 1976; Cine Workers and Cinema Theatre Workers Act, 1981.

IV. Features of the New Labour Codes

1. Code on Wages

The Code on Wages applies to all employees across sectors. The central government makes wage-related decisions for specific categories of employment such as railways, mines, and oil fields, while state governments retain authority over all other employments.

Section 2(h) of the Minimum Wages Act, 1948[1] defines “wages” as all remuneration capable of being expressed in terms of money, which would be payable to a person employed in respect of his employment or work done, if the terms of the contract of employment were fulfilled. The definition includes house rent allowance but excludes the following:

(i) the value of any house accommodation, supply of light, water, or medical attendance, or any other amenity or service excluded by general or special order of the appropriate Government;
(ii) any contribution paid by the employer to any Pension Fund, Provident Fund, or any scheme of social insurance;
(iii) any travelling allowance or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge.

The Code also incorporates provisions for gender equality in remuneration for both men and women, thereby reinforcing the principle of equal pay for equal work under Article 39(d) of the Constitution of India. In Randhir Singh v. Union of India,[2] the Supreme Court elevated the principle of equal pay for equal work to a constitutional norm derived from Articles 14, 16, and 39(d). In Air India v. Nargesh Meerza,[3] the Court addressed discriminatory service conditions imposed on female air hostesses, including provisions for termination upon pregnancy or marriage. The Court struck down certain discriminatory conditions while upholding others, making an important, if imperfect, step towards gender equality in employment.

2. Code on Industrial Relations

The Code on Industrial Relations governs the relationship between employees and employers, addressing issues such as trade union recognition under the Trade Unions Act, 1926, dispute resolution mechanisms under the Industrial Disputes Act, 1947, and conditions governing layoffs and retrenchment. As of April 11, 2026, there have been 146 layoff events in 2026, impacting 99,283 workers, averaging approximately 983 job losses per day.[4]

3. Code on Social Security

The Code on Social Security introduces a broader conception of social security that extends protection to employees, gig workers, unorganised workers, and platform workers, ensuring access to healthcare and income security in cases of unemployment, old age, sickness, and work-related injury.[5] In Regional Director, ESI Corporation v. Francis De Costa,[6] the Supreme Court held that the Employees’ State Insurance Act, being a social welfare legislation, must be interpreted broadly to extend benefits to as many workers as possible. While the Supreme Court has not yet delivered a definitive judgment on the status of gig workers in India, the issue is gaining prominence in legal discourse, particularly in light of international developments such as the UK Supreme Court’s judgment in Uber BV v. Aslam.[7]

4. Code on Occupational Safety, Health, and Working Conditions

This Code focuses on ensuring safe and humane working conditions across various sectors, including factories, mines, and construction sites. It consolidates thirteen pre-existing legislations into a single framework, thereby rationalising the compliance burden on employers while strengthening protections for workers in hazardous industries.

V. Labour Codes as a Reform

Many scholars and industry stakeholders argue that the new labour codes represent much-needed reform in India’s labour law regime. The consolidation of 29 laws into four codes significantly simplifies the legal landscape, reducing the compliance burden on employers and enhancing administrative efficiency. By grouping related laws under unified codes covering wages, industrial relations, social security, and occupational safety, health, and working conditions, the legislative framework promotes greater clarity and consistency in application.

VI. Labour Codes as Repackaging

Critics, however, argue that the existing labour laws have been repackaged into four codes with limited substantive improvement. The primary concern raised by labour rights advocates is the dilution of worker protections, particularly in relation to job security and collective bargaining rights. The raising of the threshold for seeking government permission before layoffs, and the curtailment of trade union recognition rights, are cited as evidence that the reforms favour employer interests over worker welfare.

VII. Constitutional and Legal Framework

The constitutional basis for labour welfare in India rests on the Directive Principles of State Policy. Article 38 directs the State to secure a social order for the promotion of the welfare of the people, while Article 43 mandates the provision of a living wage and decent working conditions for workers. Judicial pronouncements have consistently reinforced these principles.

In People’s Union for Democratic Rights v. Union of India,[8] famously known as the Asiad Workers’ Case, the Supreme Court expanded the scope of public interest litigation and strengthened labour law protections. The Court held that paying wages below the minimum wage constitutes forced labour under Article 23 of the Constitution, amounting to a violation of fundamental rights. In Olga Tellis v. Bombay Municipal Corporation,[9] the Court recognised the right to livelihood as an integral component of the right to life guaranteed under Article 21. In M.C. Mehta v. State of Tamil Nadu,[10] the Supreme Court issued guidelines for eliminating child labour and directed the establishment of a Child Labour Rehabilitation-cum-Welfare Fund, ordering employers found using child labour to pay compensation into the said fund.[11]

VIII. Implementation Challenges

The success of the labour codes ultimately depends on their effective implementation. One of the most significant obstacles is the lack of uniformity in state-level rules. Since labour is a concurrent subject under the Seventh Schedule of the Constitution, both the central and state governments have the authority to legislate on the matter. This has resulted in significant variation in the adoption and implementation of the codes across different states, creating uncertainty for employers and workers operating across state boundaries.

IX. Conclusion

The introduction of the new labour codes marks a significant milestone in the evolution of labour law in India. By consolidating 29 laws into four codes, the reforms aim to create a more streamlined and efficient regulatory framework. However, the question of whether these codes are truly transformative reforms or merely a restructuring of existing laws remains open. For the labour codes to achieve their intended objectives, it is essential to address implementation challenges, strengthen enforcement mechanisms, and incorporate a more worker-centric approach. Only then can these reforms fulfil their promise of fostering both economic growth and social justice.

References

[1] Minimum Wages Act, No. 11 of 1948, INDIA CODE (1948), § 2(h).
[2] Randhir Singh v. Union of India, (1982) 1 SCC 618.
[3] Air India v. Nargesh Meerza, (1981) 4 SCC 335.
[4] Layoffs Tracker, SkillSyncer, https://skillsyncer.com/layoffstracker (last visited Apr. 11, 2026).
[5] Code on Social Security, No. 36 of 2020, INDIA CODE (2020), Overview of Coverage, Institute of Company Secretaries of India, https://www.icsi.edu/media/webmodules/CCJ/January_2026/23.pdf.
[6] Regional Director, ESI Corporation v. Francis De Costa, (1993) Supp (4) SCC 100.
[7] Uber BV v. Aslam, [2021] UKSC 5.
[8] People’s Union for Democratic Rights v. Union of India, AIR 1982 SC 1473.
[9] Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180.
[10] M.C. Mehta v. State of Tamil Nadu, AIR 1997 SC 699.
[11] Landmark Judgments on Labour Laws, NCLegal, https://nclegal.co/blog-details/landmark-judgments-by-the-honble-supreme-court-of-india-on-labour-laws.