Centre pushes labour reforms, notifies codes; draft rules out soon

Govt to soon put draft rules in public domain for consultation

Five years after the four labour codes were passed by the Parliament, reforming and consolidating the 29 existing labour laws, the Union government on Friday notified their implementation. 

The four Labour Codes— the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020) and Occupational Safety, Health and Working Conditions Code (2020) — are intended to modernise labour regulations, enhancing workers’ welfare and aligning the labour ecosystem with the evolving world of work. 

The new codes require employers to issue appointment letters to all workers, extend social security coverage to the entire workforce including gig and platform workers, ensure payment of statutory minimum wages, and provide free annual health checkups for workers above 40. They also allow women to work at night across all establishments and expand employees’ state insurance benefits nationwide. Fixed-term employees will receive benefits equal to permanent workers, and will be eligible for gratuity after just one year, instead of five. The codes define gig work, platform work and aggregators for the first time. 

The new codes mandate aggregators to contribute 1-2 per cent of the annual turnover, capped at 5 per cent of the amount paid/payable to gig and platform workers.

 

“While the four codes were notified earlier in the gazette, the date of implementation was deferred to a later date. With today’s notification, the codes officially come into effect for standalone provisions where further rule-making is not necessary. Since the draft rules by the Centre were published a couple of years ago, they need certain changes to reflect the new realities. Government will soon put the draft rules in the public domain for at least 45 days for consultation. Major provisions of the four codes will come into effect once the rules are notified by the Centre. The states can now go ahead and notify rules under their domain,” a government official said, requesting anonymity. 

Prime Minister Narendra Modi described it as one of the most comprehensive and progressive labour-oriented reforms since Independence. “These Codes will serve as a strong foundation for universal social security, minimum and timely payment of wages, safe workplaces and remunerative opportunities for our people, especially Nari Shakti and Yuva Shakti. It will build a future-ready ecosystem that protects the rights of workers and strengthens India’s economic growth,” Modi added. 

Labour minister Mansukh Mandaviya said all the states, except West Bengal, have pre-published the rules. “There is no specific point that labour unions have reservations about. It is a political reservation,” he added. 

Bharatiya Mazdoor Sangh (BMS) appreciated the decision for implementing the long-awaited four labour codes. “We will continue to engage with the government and all stakeholders to ensure that workers’ welfare remains the central focus of labour governance,” it said in a statement. 

The Joint Platform of Central Trade Unions (CTUs) comprising 10 Central Trade Unions, including Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC) and Centre of Indian Trade Unions (CITU) condemned the “blatantly unilateral implementation” of the labour codes, calling for protests from November 26. “The Joint Platform of CTUs while denouncing the move of the Govt as most undemocratic, most regressive, anti-worker, and pro employer reiterate in strongest terms that the lethal assault on the working people will be confronted with the fiercest and most united resistance in history,” it said in a joint statement. 

Puneet Gupta, Partner, People Advisory Services, EY India, said with the implementation of four Labour Codes, formal employees gain stronger protections and uniform benefits, while gig and platform workers are included in social security schemes for the first time. “This transformation will reshape compensation structures, H R policies, and employment models, creating a more inclusive and future-ready labour ecosystem,” he added. 

Chandrajit Banerjee, Director General, Confederation of Indian Industry said it is a historic milestone for India’s labour landscape. “This long-awaited reform brings India in line with global standards, eases compliance, empowers enterprises, and strengthens the foundations for higher productivity, greater competitiveness and accelerated job creation,” he added.