New Labour Laws Come into Operation
On 21 November 2025, five years after the Industrial Relations Code and the Code on Social Security received presidential assent, India finally made its four Labour Codes effective. The wait was long, the path protracted, but the destination—a consolidated framework replacing 29 fragmented central labour laws—represents a genuinely transformational moment for Indian workers. As the prime minister noted in his X (formerly Twitter)
message marking the occasion, the move constitutes one of the most comprehensive and progressive labour-oriented reforms since Independence, empowering workers while simplifying compliance and promoting ease of doing business. The government
deserves recognition for this historic consolidation. Yet the very delay that preceded this day, and certain strategic gaps now visible in the codes themselves, warrant scrutiny as implementation begins.
The Presidential Journey: From Assent to Notification
The Code on Wages, 2019, received presidential assent on 8 August 2019. The other three codes—Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions—secured assent on 28 September 2020. Yet between that September afternoon and this November morning, nearly five years elapsed. The codes were not dormant during this period; they existed on the statute books, acknowledged, praised in policy papers, yet conspicuously absent from the lived reality of India’s workforce. That interval—spanning two general elections, a global pandemic, multiple political cycles in the states—represents a substantial loss to millions of workers who might have accessed protections that existed only on parchment.
Framing the Problem: Why the Delay?
The Central government’s explanation is constitutionally defensible. Labour occupies India’s concurrent list, meaning both Centre and states must notify rules for the codes to take effect. The Centre published its draft rules well in advance, yet several states—as recently as December 2024, just three weeks before notification—had not finalised their own regulatory frameworks. Federalism, the government would argue, is a feature, not a bug.
This is both true and insufficient. Democratic architecture explains delay; it does not justify five years of it. The earlier labour laws, themselves colonial-era relics, had persisted under the same constitutional structure. A more assertive Central government—one convinced of the urgency of reform—could have expedited state coordination through intensive stakeholder engagement, financial incentives, or enhanced technical support. The labour ministry’s approach appears to have been patient, consultative, but perhaps too accommodating of foot-dragging. India’s workers did not benefit from either federal courtesy or bureaucratic due process.
The Shortcomings Being Addressed
The pre-reform labour regime was indeed dysfunctional. A worker in 1936 might have found the Payment of Wages Act relevant; a worker in 2019 found it quaint. Twenty-nine overlapping statutes created compliance nightmares for employers and legal chaos for workers seeking to understand their rights. A female plantation worker might have been governed by one set of provisions; a female IT worker in Bangalore by another. Minimum wage thresholds differed arbitrarily; social security coverage was sectoral and spotty; contract labour faced systematic exclusion from basic protections; gig workers barely existed in the legal imagination.
The codes address these comprehensively. All workers now receive statutory minimum wage protection, not just scheduled industries. Women gain the explicit right to night-shift work across all establishments, subject to safety measures. Fixed-term employees receive gratuity eligibility after one year, not five. Gig and platform workers, defined and recognised for the first time in Indian labour law, qualify for social security benefits financed by platform aggregators at 1%-2% of annual turnover, capped at 5% of payouts to workers. ESIC coverage expands pan-India, now extending to establishments with even a single employee in hazardous processes. The unified wage definition curtails employer manipulation; the single registration and return system cuts bureaucratic redundancy; the inspector-as-facilitator model signals a philosophical shift from punishment to compliance-support.
These changes are substantial, welcome, and long overdue.
What Genuinely Changes: A Balanced Assessment
The codes standardise and expand, but their transformational potential depends on enforcement. A mandatory appointment letter means little if ignored with impunity. Free annual health check-ups for workers above 40 become tokenistic if perfunctory. The guarantee of timely wages is only valuable if inspectorates possess capacity and will to audit, investigate, and penalise violations. The social security schemes for gig workers remain sketches awaiting detailed design; benefit levels, eligibility thresholds, and claims procedures remain to be notified.
For organised-sector workers—those already covered under prior regimes—improvements are real but often incremental. The code consolidation delivers administrative simplification and certain benefit enhancements, particularly for women and fixed-term employees. For unorganised-sector workers, small-enterprise employees, and gig workers, the codes represent something closer to a revolution: first recognition, first statutory entitlement, first explicit pathway to social security. However, this potential depends entirely on state-level implementation, digital infrastructure, and workforce awareness.
The Safety Nets That Exist—and Those That Don’t
The codes introduce several protective mechanisms. The Aadhaar-linked universal account number for gig workers promises portability of benefits across states. The national floor wage ensures no worker receives below a nationally determined minimum living standard. The gender-neutral pay mandate, explicit prohibition of discrimination, and mandatory grievance redressal committees protect women and marginalised workers formally. The Occupational Safety Code mandates safety committees, health standards, and protective equipment.
Yet, significant gaps remain. The Social Security Code extends eligibility to gig and platform workers but does not guarantee specific benefit levels or timelines. It leaves crucial details—how much insurance? What maternity support? Whose eligibility thresholds?—to future government notification. The code does not address algorithmic accountability or transparency in how platforms make deactivation or assignment decisions; Karnataka has acted on its own, but the national codes remain silent. Minimum wage protections exclude agricultural workers and domestic help, despite these sectors employing millions and facing systematic underpayment. Small and micro-enterprises receive exemptions for certain provisions, potentially leaving their workers—disproportionately vulnerable—without full protection.
The codes do not mandate collective bargaining rights with real teeth. While the Industrial Relations Code eases union registration in some respects, it simultaneously introduces restrictive provisions: the ban on flash strikes, the mandatory 60-day notice requirement, the narrow definition of unfair labour practice. Workers retain the formal right to unionise, but the practical space to exercise it has narrowed. Trade unions, across ideological divides, have objected strenuously to these provisions, arguing that the codes dilute rather than strengthen worker voice.
Perhaps most concerning: enforcement capacity remains uncertain. State labour departments report chronic understaffing, inadequate digital infrastructure, and poor coordination with central authorities. An inspector-cum-facilitator model is enlightened in theory; without sufficient inspectors, it becomes aspirational fiction.
Why the Government Deserves Credit
Against these reservations, the Central government’s achievement must be acknowledged. Consolidating 29 laws into four is genuinely difficult. Building consensus across states, industry, and unions—even partial consensus—required political will. The explicit inclusion of gig and platform workers, the extension of social security to previously excluded categories, the introduction of fixed-term employment as a legitimate form with full benefits, the mandatory safety committees, the free preventive health checks—these represent a state that is taking worker welfare seriously.
The delay, while frustrating, may also have allowed for more deliberate drafting. The codes reflect consultations, learning from implementation elsewhere, and refinement. India has learned from failures of earlier reforms to build in portability, digital architecture, and intersectional protections (particularly for women and migrant workers).
The Road Ahead
Implementation will define the codes’ true worth. The Centre must now move quickly to finalise all subsidiary rules, schemes, and notification procedures. States must establish uniform standards while respecting constitutional autonomy. Labour inspectorates require recruitment, training, and technology. Workers and employers need sustained awareness campaigns. Dispute resolution systems must become genuinely accessible, not bureaucratic mazes.
The codes are neither perfect nor complete, but they represent a genuine break from the past—a recognition that India’s workforce deserves a legal architecture built for the 21st century, not the 1930s. The five-year delay was regrettable; that this landmark finally arrives is cause for qualified celebration, tempered by the hard work of making it real.
Shramev Jayate!
(Karan Bir Singh (KBS) Sidhu is a retired IAS officer and former special chief secretary, government of Punjab. He holds a Master’s degree in Economics from the University of Manchester, UK. He writes at the intersection of global trade negotiations, Trump-era tariff shocks, and contemporary geopolitics.)
