ABSTRACT
The development and prosperity of any nation indeed depends upon the labour force. For the protection of rights, security and dignity of the labor force, the nation owes a primary responsibility in enacting legislation that upholds their rights and aids in the maintenance of stability and order. The 2025 Labour Codes have been hurled by the Government as a step further to an easier access for workers to gain security, dignity, health, and welfare measures
KEYWORDS
Labour Codes, Industrial Relations Code, 2020, Occupational Safety, Health and Working Conditions Code, 2020, Social Security Code, 2020, Code on Wages, 2019
INTRODUCTION
With respect to a democratic country like ours, the system of government is entirely devoted for the achievement of rights and freedom including freedom of association for its citizens. Thereby it is not surprising to find out that India hosts more than 44 labour legislations that comprehensively deals with the diverse aspects of employment, working conditions, wages, other remuneration, social security benefits, formation of trade unions, settlement and resolution of trade disputes, lay-offs and closure of industries etc. Another reason that is accountable for the immense number of labour laws is the socio-political economic conditions of the country. Though the primary purpose of such a comprehensive legal structure is oriented to the labor force however, it also consists of certain lacunae, ambiguities and complexities which persists even to this day.
Necessity demanded simplification and modifications in the existing labour laws that added an element of flexibility and aided the growth of job opportunities, thereby adapting and adjusting to the growth and crucial needs of the society. In this socio-legal background, the Indian Parliament enacted and passed three labour codes which includes the Industrial Relations Code, 2020, the Occupational Safety, Health and Working Conditions Code, 2020 and the Social Security Code, 2020 along with the Code on Wages, 2019 with the sole objective of simplifying and consolidating the multifarious labor laws prevalent in the country. By taking an exemplary step, the Parliament has amalgamated 29 labour laws resulting in the formation and enactment of the well-known 4 Labor Codes.
OVERVIEW OF THE FOUR LABOUR CODES
The Ministry of Labour and Employment brought into force several key provisions of the four labour codes on 21 November 2025 and this marked a significant step in consolidating and simplifying India’s labour laws. This enforcement repeals multiple earlier legislations, streamlining compliance and ensuring uniformity across social security, wages, occupational safety, and industrial relations.
The Wages Code, 2019 consolidates laws on minimum wages, payment of wages, bonus rules, and, more importantly, defines the term ‘wages’. This definition is very important as it is the basis for PF, gratuity and social security contributions.
The Industrial Relations Code, 2020 deals with hiring, firing, layoffs, strikes, and dispute resolution. The aim of this code is to improve labour flexibility while retaining safeguards for any disputes. It simplifies laws related to trade unions, conditions of employment in industrial establishment or undertaking, investigation and settlement of industrial disputes
The Social Security Code, 2020 consolidates several acts including Employees Compensations Act, 1923, Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972, Unorganized Workers Social Security Act, 2008 etc. This Code extends social security to all workers with a specific inclusion of gig and platform workers. For greater efficiency, the Code also brings about the introduction of digital systems and facilitator-based compliance
The OSH Code, 2020 consolidates laws on safety, working conditions, contract labour, holidays, and health standards into a single code that is applicable across industries. The Code balances the dual objectives of safeguarding worker rights and safe working conditions along with creating a business-friendly regulatory environment. This will spur economic growth and employment thereby, making India’s labour market more efficient, fair, and future-ready.
SIGNIFICANT CHANGES BROUGHT BY THE 4 LABOUR CODES OF 2025
- A key change under the new regime is the universalisation of minimum wages and timely wage payment. Mandatory appointment letters for all workers, expanded ESIC coverage across India (including for establishments with even one hazardous-process worker), and enhanced social-security benefits such as provident fund, insurance and gratuity, now available to fixed-term employees after just one year, form part of the overhaul.
- The Codes also mandate free annual health check-ups for workers above 40, gender-neutral wages, the removal of restrictions on women working night shifts subject to safety measures, and stronger protections against discrimination
- Compliance processes have been streamlined through single registration, a single licence and a single return, replacing multiple filings under earlier laws. A new inspector-cum-facilitator system prioritises guidance and awareness over punitive enforcement, while industrial tribunals with faster timelines aim to ensure predictable dispute resolution.
- Sector-specific changes include overtime at double wages, stricter safety norms for mines and hazardous industries, mandatory safety committees in larger establishments, and expanded protections for workers in IT/ITES, plantations, export units, ports, beedi and cigar manufacturing, textiles and audio-visual media.
- Under Social Security Code all workers have specifically included gig and platform workers to get social security coverage which was not the case previously. Gig and platform workers will, for the first time, be entitled to social-security coverage funded partly by contributions from aggregators. All workers will get PF, ESIC, insurance, and other social security benefits.
- Women are permitted to work at night and in all types of work across all establishments, subject to their consent and required safety measures. Further women will get equal opportunities to earn higher incomes in high paying job roles.
- ESIC coverage and benefits are extended Pan-India however it is voluntary for establishments with fewer than 10 employees, and mandatory for establishments with even one employee engaged in hazardous processes. Social protection coverage will be expanded to all workers.
CRITICAL APPRAISAL OF THE FOUR LABOUR CODES OF 2025
According to the Centre the Codes place India’s labour ecosystem on par with international standards and support “Aatmanirbhar Bharat” by enhancing both worker welfare and industrial resilience. During the transition period, provisions under existing labour laws and rules will continue to operate until corresponding rules under the new Codes are finalised after stakeholder consultations.
As per the Industrial Relations Code, firms with up to 300 workers (up from 100 previously) can now lay off, retrench, or close operations without seeking prior government approval. This is meant to boost manufacturing appetite, help firms scale faster, and reduce the fear of adding permanent headcount. However unions see the exact change as a weakening of job security and a shift of bargaining power away from workers, and toward companies.
As per the Wages Code, the employee’s basic salary must constitute at least 50% of their total CTC. This adjustment will lead to higher contributions as both PF and gratuity calculations are based on an individual’s basic pay. Whilst this change ensures enhanced retirement benefits for workers, it also means reduced take-home pay, as the increased contributions will come from the existing CTC.
Further Fixed-Term Employees FTEs are to receive all benefits equal to permanent workers, including leave, medical, and social security. Eligibility for gratuity is made after just one year, instead of the previous five years. Further it ensures equal wages as permanent staff, increasing income and protection. This undeniably promotes direct hiring and reduces excessive contractualisation.
The fundamental justification for the changes was that by eliminating the numerous labour restrictions that made it difficult for individuals to find employment, they would aid in the expansion of the economy and industry. The Codes will undeniably bring about simplification, harmonization, and rationalization of the regulatory framework by consolidating multiple labour laws into four comprehensive Codes, ensuring consistency and reducing administrative burden.
CONCLUSION
It could be concluded that the new Labour Codes are an undeniably transformative step in India’s labour framework since it balances the welfare of workers with the efficiency of enterprises. These provisions simplify compliance, promote safety and ensure fairness in wages. The implementation of the Labour Codes represents the next major leap in widening protection, ensuring portability of benefits and building a “protected, productive and future-ready workforce.”
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WRITTEN BY : AMYUKTA RAJAGOPAL
