Introduction and Objective

India’s labour laws have long been a cornerstone of its social and economic fabric, safeguarding workers’ rights while fostering industrial harmony. The “latest” developments refer to the transformative four Labour Codes enacted between 2019 and 2020: the Code on Wages (CoW), 2019; Industrial Relations Code (IRC), 2020; Code on Social Security (CoSS), 2020; and Occupational Safety, Health and Working Conditions Code (OSH), 2020. These consolidate 29 central laws into a unified framework, aiming to simplify compliance, enhance worker welfare, and boost ease of doing business.

The objective is multifaceted: promote universal social security, formalize employment (especially in the unorganized sector, which employs 90% of the workforce), facilitate gig economy integration, ensure safe workplaces, and balance employer flexibility with employee protections. Influenced by the Second National Commission on Labour (2002) and ILO standards, these codes address post-liberalization rigidities while aligning with constitutional mandates under Articles 14 (equality), 19(1)(c) (union rights), and 43 (living wage). As of October 2025, implementation is progressing, with full nationwide enforcement targeted for FY 2025–26, following state-level rule finalization by March 2025. This reform seeks to reduce litigation, cut compliance costs by 40%, and drive FDI, but raises questions on equity in a diverse economy.

Historical Development

Labour legislation in India traces its roots to the colonial era, evolving from exploitative origins to a protective framework post-independence. The journey spans over 125 years, shaped by industrialization, global influences, and socio-political shifts.

Colonial Foundations (1850–1947)

Early laws emerged amid the Industrial Revolution’s excesses, prioritizing British interests. The Apprentice Act, 1850, marked the first, training orphanage children for employment. The Factories Act, 1881, limited child labour (under 7s banned, 7–12s to 9-hour days) and set rudimentary safety norms, driven by British textile lobbies to curb Indian competition. Subsequent enactments included the Workmen’s Compensation Act, 1923 (injury compensation) and Trade Unions Act, 1926 (union registration), spurred by ILO’s 1919 formation—India as a founding member ratified key conventions like forced labour bans.

Labour unrest, like the 1928 Bombay textile strikes, pressured reforms. The Royal Commission on Labour (1929–31) highlighted exploitation, leading to the Payment of Wages Act, 1936 (timely wage payment).

Post-Independence Consolidation (1947–1990)

The Constitution (1950) enshrined labour as a concurrent subject (List III, Entries 22–24), with Directive Principles (Articles 39–43A) mandating fair wages, safe conditions, and worker participation. The Industrial Disputes Act (ID Act), 1947, revolutionized resolution via tripartism (government-employer-worker), prohibiting unfair practices. Key laws followed: Minimum Wages Act, 1948; Factories Act, 1948 (expanded welfare); Employees’ State Insurance Act (ESI), 1948; and Employees’ Provident Funds Act, 1952.

The 1950s–70s saw socialist influences: Payment of Bonus Act, 1965; Contract Labour Act, 1970; and Equal Remuneration Act, 1976 (gender pay equity). ILO ratifications grew, including equal pay (1958). However, over 100 laws by 1980 created a fragmented, compliance-heavy regime, protecting organized sectors (10% workforce) while neglecting unorganized ones.

Liberalization and Reforms (1991–2020)

Economic liberalization (1991) exposed rigidities—low employment elasticity (0.1–0.2)—prompting flexibility calls. The Second National Commission on Labour (2002) recommended consolidation into five codes (later four). Amendments like the 2010 ID Act (harsher penalties) and 2017 Maternity Benefit Act (26-week leave) addressed gaps.

The 2019–2020 Codes marked the culmination: CoW subsumed four wage laws; IRC three dispute acts; CoSS nine security schemes; OSH 13 safety statutes. Draft rules (2021–24) faced delays due to COVID-19 and federal consultations, with protests over “anti-worker” clauses. By 2025, 34 states/UTs have drafted rules, signaling phased rollout.

This evolution reflects a shift from colonial exploitation to welfare-oriented, market-responsive laws, balancing social justice with growth.

Key Features

The Codes introduce uniformity, technology integration (e.g., e-shram portal for unorganized workers), and gig/platform worker inclusion, reducing 1,000+ compliances to ~100. Below are salient features:

Code on Wages, 2019

• Floor Wage: National minimum (Rs 178/day base, variable by skill/region), preventing state “race-to-bottom.”

• Timely Payments: Wages within 7–15 days (based on salary); 50% salary as wages cap (excluding HRA, bonuses).

• Bonus & Equality: Statutory bonus (8.33–20% of wages); equal pay for equal work (gender-neutral).

• Threshold: Applies to all workers earning <Rs 24,000/month; penalties up to Rs 50,000 for violations.

Industrial Relations Code, 2020

• Dispute Resolution: Retains tripartite mechanisms; 14-day strike notice (60 in utilities); flash strikes banned.

• Fixed-Term Employment: Parity in benefits with permanents; no retrenchment for term end.

• Layoff Threshold: Government nod for >300 workers (up from 100); easier for <300.

• Unions: Single negotiating union via secret ballot; standing orders for >100 workers.

Code on Social Security, 2020

• Universal Coverage: Extends ESI/EPF to gig workers; 1% aggregator contribution for platforms.

• Gratuity & Maternity: 8.33% gratuity from day one; 26-week maternity (adoptive too).

• Portability: E-shram IDs for migrant benefits; unemployment allowance for contract workers.

• Threshold: EPF/ESI for 10+ workers; unorganized schemes via national board.

Occupational Safety, Health and Working Conditions Code, 2020

• Hours & Safety: 8-hour day/48-week max; overtime up to 125 hours/quarter; 4-day week possible.

• Night Shifts: Women allowed (7pm–6am) with consent/safety; inclusive facilities (transgender).

• Contract Labour: Threshold 50 workers; core activities restricted; annual migrant travel reimbursement.

• Welfare: Creches for 50+ women; hazardous process licensing; inter-state worker registry.

Digital enablers like Aadhaar-linked registrations and AI-driven inspections enhance enforcement.

Critical Analysis

The Codes herald modernization but invite scrutiny for tilting toward capital over labour, exacerbating inequalities in a 90% unorganized workforce.

Pros

• Simplification & Efficiency: Consolidates fragmented laws, slashing compliances; digital tools (e.g., Shram Suvidha portal) cut pendency by 40%, aiding MSMEs (85% of firms).

• Inclusivity: First-time gig/platform coverage (e.g., 5% contribution cap) formalizes 8 million workers; migrant portability addresses 45 crore inter-state labourers.

• Flexibility & Growth: Fixed-term jobs spur hiring; IRC’s thresholds ease layoffs, potentially boosting employment elasticity to 0.4 (from 0.1). ILO-aligned safety norms reduce accidents (1.3 lakh annual deaths).

• Gender Equity: Night shifts/creches empower women (LFPR 37% in 2024).

Cons

• Worker Protections Diluted: IRC’s strike curbs (60-day notice) and layoff ease (no approval <300) undermine bargaining, per unions; fixed-term may casualize jobs, eroding security.

• Implementation Gaps: Delayed rollout (only Gujarat notified OSH rules by Aug 2025) breeds uncertainty; vague gig definitions risk misclassification. No methodology for floor wages ignores ILC/SC formulas, risking inadequacy.

• Inequity & Exclusion: Benefits skew organized sector; unorganized (90%) face awareness barriers; threshold hikes exempt small firms from scrutiny. 2025 strikes (July 9–10) protested “anti-worker” tilt.

• Federal Challenges: State variations (e.g., West Bengal delays) hinder uniformity; minimal tripartite consultation violates ILO C144.

Overall, while pro-business, the Codes risk widening disparities without robust enforcement, echoing colonial-era biases.

Suggestions

To maximize efficacy:

1. Expedite & Harmonize: Mandate full implementation by Q1 2026 with central oversight; standardize state rules via model templates.

2. Enhance Protections: Reinstate ILC wage formula; cap fixed-term at 50% workforce; clarify gig rights with mandatory insurance.

3. Capacity Building: Launch awareness campaigns (e.g., via e-shram) for unorganized workers; subsidize MSME compliance tech.

4. Monitoring Mechanisms: Establish independent tripartite boards; integrate AI audits with ILO-aligned grievance apps.

5. Inclusive Reforms: Amend for remote work (post-COVID); ratify more ILO conventions (e.g., C87 on union freedom); pilot 4-day weeks with impact studies.

Stakeholder dialogues, as in 2024 regional meets, must revive tripartism.

Conclusion

The 2020 Labour Codes represent a bold stride toward a resilient, equitable labour regime, consolidating colonial legacies into a future-ready framework. By streamlining 29 laws, they promise reduced litigation, inclusive security, and economic vitality—potentially elevating India’s Ease of Doing Business ranking (63rd in 2020) while protecting 50 crore workers. Yet, their success hinges on addressing critiques: dilution of rights, implementation lags, and unorganized sector neglect could perpetuate exploitation.

As India eyes Viksit Bharat by 2047, these Codes must evolve through consultation, ensuring labour isn’t a commodity but a partner in growth. Full enforcement in 2025–26, coupled with vigilant reforms, could forge a model blending social justice with global competitiveness—honoring Gandhi’s vision: a nation inseparable from its labour.