India’s long-awaited shift toward a modern and unified labour governance system has taken a meaningful step forward with the notification of the four labour codes, bringing together 29 separate laws into a single, simplified framework. This reform, pending since 2020, reflects the government’s intention to build a labour ecosystem that is fairer, more predictable, and better aligned with the needs of a fast-changing economy. While public debate on the codes continues, the government’s approach highlights a clear effort to balance worker welfare with economic growth and to prepare India’s labour market for the future.
One of the most significant strengths of the new codes is the emphasis on universal social security. The government has deliberately brought gig workers, platform workers, contract employees, and migrant labourers into the social protection fold, ensuring they are no longer excluded from benefits such as provident fund, insurance, ESIC facilities, and maternity support. For the first time, employers in the gig economy will contribute to worker welfare funds, creating a sense of responsibility toward those who drive the digital services sector. The introduction of a national floor wage offers an important safeguard, helping ensure that workers across low-wage states receive fairer compensation. Measures such as mandatory appointment letters, Aadhaar-based portability of benefits, and a structured wage payment schedule strengthen formalization and create clearer employer–employee relationships. The codes also reflect the government’s commitment to improving workplace safety and dignity for women. Provisions that allow women to work night shifts with adequate protection, stronger mechanisms to address discrimination, and improved grievance redressal avenues are designed to support women’s participation in the workforce. Fixed-term workers also stand to gain, with full access to statutory benefits, including gratuity eligibility after just one year. Mandatory annual health check-ups for workers above 40 and improved safety protocols in hazardous sectors underline the government’s focus on long-term worker well-being. While some trade unions have expressed concerns about layoff thresholds and extended work hours, the government has emphasized that the reforms aim to create a more flexible and growth-oriented industrial environment without diluting core worker protections. The increase in the threshold for prior approval of layoffs from 100 to 300 workers is intended to give industries the room needed to expand and remain competitive globally, especially when India is positioning itself as a strong manufacturing hub. Overtime safeguards, rest period requirements, and compliance monitoring remain in place to ensure that worker rights are not compromised. A major challenge that slowed the rollout of the codes has been India’s federal structure, where both the Centre and states must frame corresponding rules. Despite this, the government has continued to work closely with states, offering guidance and pushing for smooth adoption. Many industrially advanced states have already aligned their rules, reflecting confidence in the long-term benefits of the reforms. The disruptions caused by the pandemic also contributed to delays, but the renewed momentum now signals a shared readiness to move forward. Beyond the legislative and administrative layers, the labour codes are intended to enhance India’s appeal as a global investment destination. In a competitive world where countries like Vietnam and Indonesia offer streamlined compliance and flexible labour regimes, India’s updated framework aims to provide clarity, reduce litigation, and make compliance simpler for businesses. At the same time, expanded social security and clear worker protections ensure that growth does not come at the cost of dignity, safety, or welfare.
The road ahead will require continued cooperation between the Centre and states/UTs and a commitment to transparent implementation. If this harmony is achieved, the Labour Codes hold the potential to create a more stable labour market, energize manufacturing, expand formal employment, and elevate the quality of life for millions of workers. The government’s effort reflects a belief that economic progress and worker welfare are not competing priorities but complementary pillars of a stronger and more confident India.