Dialogue among employers, workers key as labour codes take effect: ILO DG

International Labour Organization Director-General Gilbert F Houngbo has said social dialogue among government employers and workers will remain essential as the labour codes are implemented to ensure they are positive for workers and business.

In a post on X, he said: "Following with interest developments of India's new Labour Codes announced today, including on social protection & minimum wages."  In a landmark overhaul of labour laws, the government on Friday notified all four labour codes, ushering in major reforms, including universal social security coverage for gig workers, mandatory appointment letters for all employees, and statutory minimum wages and timely payment across sectors.

Meanwhile, reacting to the labour codes, Sajja Praveen Chowdary, Director, Policybazaar for Business said making annual health checks mandatory for employees above 40 years marks an important shift in how organisations view workforce wellbeing.

In the long run, this alignment of policy and proactive health management will benefit both employers and employees alike. It not only reduces the risk of any employee missing a mandated check, but also strengthens the culture of preventive care within the company.

Harpreet Singh Saluja, President Nascent Information Technology Employees Senate (NITES) said one of the most impactful changes through labour codes is the push towards portability and digital tracking of benefits. In IT and ITES, where employees switch jobs frequently and work across states, standardisation of wage components and digitisation of compliance can help prevent wage deductions, arbitrary recoveries and denial of benefits during job transitions.

"The requirement of transparent employment terms and timely wage payments will also help reduce disputes, especially in cases where companies delay salaries or force employees to resign without notice," Saluja said.

Rahul Ahluwalia, Founder and Director at Foundation for Economic Development said the new labour codes reduce compliance burden for manufacturers and give substantial flexibility to states on many aspects like retrenchment thresholds and quarterly caps on working hours.

However, there are some new concerns. Services sector will now be affected by a lot of the rigid laws that used to cover only factories earlier. The government will need to stay flexible while ironing out wrinkles of implementation to ensure that we don't disrupt sectors that are working well, and simultaneously encourage new investment, he stated.

Akhil Chandna, Partner, Global People Solutions Leader, Grant Thornton Bharat said although industry had anticipated a transition period, the notification makes the implementation immediate.

Employers across sectors should therefore promptly assess and align their internal policies, HR practices, and operational processes with the applicable provisions of the codes, he added.

A review of compensation and benefits structures will also be essential, particularly in light of the revised and uniform definition of wages under the new framework, he said.