Labour & Service

New Labour Codes: India's Historic Labour Reforms

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July 31, 2025

New Labour Codes: India’s Historic Labour Reforms

📌 Background

India had 29 complex labour laws from the British era.
These were overlapping, outdated, and caused compliance burdens.
In 2020, these were codified into 4 simplified Labour Codes:
1. Code on Wages, 2019
2. Code on Social Security, 2020
3. Industrial Relations Code, 2020
4. Occupational Safety, Health & Working Conditions (OSH) Code, 2020

🧩 Chapter-wise Summary

🔹 Chapter 1: Introduction

90% of India’s 50 crore workforce is in the unorganized sector.
Labour Codes aim to empower both organized and unorganized workers.

🔹 Chapter 2: 18 Years of Delay

Second National Labour Commission (2002) suggested codification.
No significant action between 2004–2014.
PM Modi’s government expedited the reforms post-2014.

🔹 Chapter 3: Shramev Jayate

Workers treated as “Nation Builders”.
Key reforms since 2014:
- Universal Account Number (UAN)
- Shram Suvidha Portal
- Maternity Benefit Act (26 weeks leave)
- Gratuity ceiling raised to ₹20 lakh

🔹 Chapter 4: The Four Labour Codes

Codification benefits:
- Reduced red tape and compliance
- Minimum wages and EPF/ESI extended to all sectors
- 1 registration, 1 license, 1 return model

🧾 Code-wise Highlights

🟦 Code on Wages, 2019

Universal Right to Minimum Wages.
Floor wages introduced to reduce regional disparities.
Timely wage payments.
Equal pay for equal work (gender parity).

🟨 Code on Social Security, 2020

Merges 9 laws (including EPF, ESI, Maternity, Gratuity).
Social Security Fund for 40 crore unorganized workers.
Gig & platform workers brought under social security net.
Fixed-term employees eligible for gratuity.
National database for unorganized workers.

🟥 OSH Code, 2020

Covers 13 laws, ensuring occupational health and safety.
Benefits to:
- Inter-state migrant workers (travel allowance, registration)
- Women workers (night shifts with consent)
- Annual free health check-ups
Mandates appointment letters and One Nation One Ration Card benefit.

🟩 Industrial Relations Code, 2020

Merges 3 laws.
Benefits:
- 15 days’ wages for re-skilling post retrenchment.
- Streamlined dispute resolution within 1 year.
- Statutory recognition to unions (51% votes for sole negotiation).
- Atal Bimit Vyakti Kalyan Yojana: Unemployment allowance via ESIC.

⚙️ Systemic Reforms

Single Registration / License / Return
Aadhaar-based UAN for all workers
Randomized web-based inspections
Employer-friendly while ensuring worker protection

📊 Visual Highlights (Poster-Friendly Data)

50+ crore workers covered
44 central laws merged into 4 codes
Floor wages + equal pay + minimum wage coverage
Universal coverage of ESI, EPF, Maternity, Gratuity
Social Security Fund for unorganized, gig, platform workers
Dispute resolution within 1 year via tribunals

🧵 Quote Highlights

“Shramev Jayate is equal to Satyamev Jayate” – PM Modi
“Employer-employee relation made more symmetrical.”
“The journey of development cannot be stopped when family sentiments exist.”

Would you like me to now prepare:

📌 A YouTube video script (Hindi-English mix)?
🎯 A compliance summary checklist per code?
📄 A poster or infographic summarizing all 4 codes?

Let me know what format you need next.

why Labour Codes still not implemented

The Four Labour Codes, though passed by Parliament in 2019 and 2020, are still not implemented across India as of mid-2025. The delay is due to a combination of administrative, legal, political, and practical reasons.

Here’s a detailed explanation:

🚫 Why the Labour Codes Are Still Not Implemented

1. 🏛️ Labour is a Concurrent Subject

Under the Indian Constitution, both Centre and States can make labour laws.
While Parliament passed the Codes, States must draft and notify their own rules.
Until most states notify rules, implementation cannot begin.

✅ Central Govt: Has framed rules for all 4 codes.
❌ State Govts: Only a few states (e.g., UP, MP, Gujarat, Karnataka) have drafted or finalized rules.
🚫 Uniform pan-India implementation is not yet possible.

2. ⚖️ Coordination Between Centre and States is Incomplete

The Centre wants a simultaneous rollout across all 4 Codes and all states to avoid confusion.
But states are at different stages of readiness:
- Some have not even published draft rules.
- Others face bureaucratic delays in finalization.

3. 💼 Industry Resistance & Trade Union Opposition

Industry groups fear:
- Increased wage costs (due to universal minimum wage, social security).
- Compliance burdens.
Trade Unions oppose:
- Restrictions on strikes.
- Ease of hire-and-fire policies under the Industrial Relations Code.
Result: Intense lobbying and protests have slowed implementation.

4. 🧾 Pending IT Systems & Infrastructure

Labour Codes require:
- National databases (for unorganized workers, migrant workers).
- Unified portals for UAN, PF, ESI, Social Security contributions.
Many of these IT systems are still being built or tested.

5. 📉 Elections & Political Sensitivity

Implementation would impact workers, MSMEs, gig economy, and employers.
General Elections (2024) and several state elections made governments cautious about enforcing major reforms that may trigger unrest.
Fear of political backlash from trade unions and informal sector workers.

6. 📌 Covid-19 & Economic Priorities

The pandemic delayed administrative work in 2020–2022.
Governments shifted focus to relief measures, not structural reforms.
Post-Covid recovery pushed the codes down the priority list.

🕰️ Status as of July 2025

Code	Central Rules	State Rules	Implementation
Wage Code	✅ Finalized	Partially done	❌ Not yet
Social Security Code	✅ Finalized	Draft by some states	❌ Not yet
OSH Code	✅ Finalized	Few states ready	❌ Not yet
IR Code	✅ Finalized	Opposition from unions	❌ Not yet

📌 Conclusion: It’s a Matter of “When”, Not “If”

The Labour Codes are expected to eventually be implemented, but only when:

A majority of states notify rules.
Digital systems and portals are ready.
Centre achieves consensus with key stakeholders.
Political conditions are stable.

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