Critical Examining the New Labour Codes of India in Respect to the Existing Provisions

Abstract

The ongoing discussion regarding Indian labor laws impeding the flexibility of the labor market has become a prominent issue over the past two decades, following the economic liberalization period. In an effort to streamline and simplify labor laws to promote a more business-friendly environment, the Indian government has introduced new labor codes, marking a significant milestone in labor law reform over the last thirty years. Conversely, labor unions strongly argue that the Indian labor market remains \'flexible\' to the benefit of employers, despite the existence of what they perceive as \'restrictive\' labor laws, and any further weakening of the current labor law framework will negatively impact the working class. This article delves into the consequences of the recent shift in India\'s labor law landscape brought about by the new labor codes. It also underscores the importance of addressing the latest labor market insecurities in light of the COVID-19 pandemic, while transitioning towards a new labor governance framework as outlined in the labor codes. India\'s labor laws were previously governed by a multitude of legislations, primarily aimed at promoting social welfare and security. The year 2020 witnessed a significant transformation in India\'s labor laws, with the consolidation of existing laws into four new Labor Codes. This piece specifically examines the impact of these Codes on India\'s unorganized sector and its Information Technology (\"IT\") Sector, where the trend of layoffs is prevalent. Additionally, it explores how the exclusion of the Codes from the unorganized sector detrimentally affects its stakeholders. This analysis is critical, especially in light of recent socioeconomic developments affecting workers in India, particularly in emerging industries such as information technology, namely the pink-slip tendency in the IT industry, which was shown to be widespread during the COVID pandemic era. The research of the unorganised sector is especially essential because it shows gaps in current regulations and emphasises the inadequate improvements brought about by the Labour Codes. The essay collects and analyses data using the doctrinal approach of legal research. It also presents an overview of the employment legal framework in India and its culminating into the four employment Codes, finally establishing the inadequacies of the Codes in its current form and suggesting prospective reforms.

Introduction

India’s labour law reforms, centered around four new labour codes passed in 2020, aim to simplify and consolidate 44 existing laws to improve the ease of doing business. These include the:

1. Industrial Relations Code (IRC)

2. Occupational Safety and Health Working Conditions Code (OSHWCC)

3. Social Security Code (SSC)

4. Code on Wages (WC)

While employers welcome the reforms for flexibility and simplification, labour unions and rights groups raise serious concerns about erosion of workers' rights, job security, and weakening of labour protections.

Key Concerns and Criticisms:

1. Erosion of Protective Rights

• Existing rights won through decades of struggle are diluted or made redundant.

• Laws tailored to specific vulnerable sectors (e.g., contract labour, migrant workers) have been merged or removed, weakening targeted protections.

2. Industrial Relations Code (IRC), 2020

• Restricts the right to strike by imposing a mandatory 60-day notice and other limitations.

• Raises threshold for standing orders from 100 to 300 workers, making many workers ineligible for protections.

• May increase contractual and casual employment, eroding long-term job security.

3. Social Security Code (SSC), 2020

• Splits responsibilities between Centre and State, causing ambiguity and potential inefficiencies.

• While it includes gig and platform workers, it fails to integrate their rights comprehensively across all codes.

• E-registration and Aadhar-linking raise accessibility concerns due to digital illiteracy and poor infrastructure.

• Offers limited coverage for informal and home-based workers, especially women and unpaid family workers.

• Lack of universal social security framework and absence of measures for unregistered establishments leave many workers uncovered.

4. Wage Code (WC), 2019

• Sets a national floor wage of ?178/day, considered insufficient and lacking a defined methodology.

• Limits judicial access by requiring wage disputes to be addressed through quasi-judicial bodies instead of courts.

Gendered Impacts and Informality

• Provisions like mandatory employment breaks post-pregnancy may reduce employability of women, especially in unorganized sectors.

• SSC provides conditional maternity benefits, which many informal workers may not access.

• Agricultural and micro-enterprises, key employers of women and informal workers, are left out of legal coverage.

Implementation Challenges

• Despite fast passage in Parliament, the codes have not yet been implemented, creating legal uncertainty.

• Delay attributed partly to political calculations, especially before elections, fearing backlash from workers.

• In the interim, many states have already relaxed labour laws, increased working hours (e.g., UP’s 12-hour shifts), and raised thresholds for hiring/firing, often bypassing worker protections.

Undermining Social Dialogue

• Trade unions criticize the lack of tripartite consultation, violating ILO Convention 144.

• Rapid passage without debate or consensus undermines democratic processes and collective bargaining.

Quality of Employment and Structural Shifts

• Codes promote fixed-term employment and apprenticeship models, reducing job stability.

• Schemes like NEEM are criticized for replacing permanent jobs with temporary training roles.

• Failures to address remote work, platform employment disputes, and post-COVID challenges show the codes are out of step with modern labour realities.

Conclusion

It is evident that with the advent of labour codes, there is a likelihood of dilution of existing labour protective framework, ensured through various labour welfare-oriented laws. Although.the codes have had an intention of simplification and bringing the labour reforms for ease of business as well as covering the unorganized sector, the above analysis shows that while the codes seem like an amalgamation of the laws, in any case, there are many aspects of protection of workers which have been overlooked in the new codes. It has also ignored the opportunity to expand into the aspects of employment which needs attention and could have been achieved if proper consultation with the stakeholders had been followed. As India has an excess pool of labour force and a vast reserve army of labour, even with the new labour codes and reduced protective cover, a large number of workers will be readily accepting the subhuman working conditions without fair labour standards. However, this will be a situation where more and more workers will be forced to work with dismal labour standards, with lower levels of job and income security. Further to this, as the labour code allows considerable freedom for employers to engage workers on short term contracts, eventually this situation can lead to an unprecedented bulging of the workforce who work as casual, temporary and contractual workers or as self-employed workers, who are essentially become `unprotected labour’ and who add to the process of informalization of the erstwhile formalized sector.

References

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Copyright

Copyright © 2025 Dr. Souvik Chatterji, Samrat Samaddar, Rajeev MIshra, Seherul Islam, Ankita Roy, Prapti Sarkar. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.