Govt enforces four labour codes; rationalises 29 existing labour laws

The Centre has brought all four Labour Codes into force from November 21, rationalising 29 old laws to improve worker welfare, and simplify rules for businesses

The government announced on Friday that all four Labour Codes, the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020) and the Occupational Safety, Health and Working Conditions Code (2020), will come into force from November 21.

 

The move consolidates 29 existing labour laws, bringing India’s labour system in line with the changing nature of work.

 

According to the government, this reform aims to modernise outdated laws, strengthen worker welfare and create a labour environment that supports a “future-ready workforce” and resilient industries.  Prime Minister Narendra Modi said the move will empower workers and promote ease of doing business. 

 

In a post on X, PM Modi said, "Shramev Jayate! Today, our government has given effect to the Four Labour Codes. It is one of the most comprehensive and progressive labour-oriented reforms since Independence. It greatly empowers our workers. It also significantly simplifies compliance and promotes ‘Ease of Doing Business'." 

 

Why these reforms were needed

 

Most of India’s labour laws were created between the 1930s and 1950s, when economic structures and work patterns were very different. Over the years, these fragmented laws led to confusion, complex compliance requirements and outdated protections, a PIB press release said.

 

While many major economies updated their labour systems, India continued to rely on older legislations. Implementing the four Labour Codes addresses this long-pending gap by replacing colonial-era frameworks with a unified and modern labour structure.

 

The government said the new codes will give workers better protection, simplify rules for employers and help create a competitive, self-reliant economy.

CII welcomes move to implement labour codes

 

Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII), called the implementation of the four Labour Codes a landmark moment for India. "Its a historic milestone for India’s labour landscape. The Government’s implementation of the four Labour Codes marks a transformative leap toward a modern, simplified and future-ready labour ecosystem. By consolidating 29 diverse laws, these Codes ensure better wages, stronger social security, enhanced workplace safety and a more predictable regulatory environment for both workers and industry," he said.

 

Banerjee said the overhaul was long overdue and would help India match global best practices. He further said that a strong labour framework is essential for India’s economic progress. "A resilient workforce and a progressive labour framework remain vital to India’s growth story, and this landmark decision will decisively advance the nation’s journey toward a more inclusive, innovative and Aatmanirbhar Bharat," he added.

Benefits of labour reforms across key sectors

 

Fixed-term employees (FTE):

• FTEs will receive the same benefits as permanent staff, including leave, medical and social-security coverage

• Gratuity eligibility after one year of service instead of five

• Ensures equal wages and reduces excessive use of contract labour

 

Gig and platform workers

• Definitions for ‘gig work’, ‘platform work’ and ‘aggregators’ introduced for the first time

• Aggregators will contribute 1-2 per cent of annual turnover, capped at 5 per cent of payments made to gig and platform workers

• Aadhaar-linked universal account number will enable full portability of benefits across states  Contract workers

• FTE norms will improve employability and social security

• Gratuity available after one year of continuous service

• Principal employers must provide social security and health benefits

• Workers will receive a free annual health checkup

 

Women workers

• Gender discrimination prohibited under law

• Equal pay for equal work ensured

• Women allowed to work night shifts and in all sectors, including underground mining, with consent and safety measures

• Mandatory women’s representation in grievance committees

• Family definition expanded to include parents-in-law  Youth and entry-level workers

• Minimum wage guaranteed

• Workers must receive appointment letters

• Employers must pay wages during leave

• Central government will set the floor wage

 

MSME workers

• All eligible MSME workers covered under the Social Security Code

• Minimum wages, basic facilities, standard working hours and double overtime

• Timely payment of wages mandated

 

Beedi and cigar workers

• Minimum wages ensured

• Work hours capped at 8-12 hours per day and 48 hours per week

• Overtime must be voluntary and paid at double the normal rate

• Bonus eligibility after 30 days of work in a year

Additional reforms under the Labour Codes

• National floor wage to ensure a minimum living wage

• Gender-neutral opportunities; protection against discrimination including for transgender persons

• Single licence, single registration and single return for simplified compliance

• National OSH Board to create harmonised safety and health standards

• Mandatory safety committees in establishments with over 500 workers

• Higher applicability limits for factories to reduce small-unit compliance burden