Despite strong opposition from all labor organizations, many rights were limited in the four codes implemented in place of labor laws, giving convenience to employers. How much will this lead to labor reforms?
In lieu of all the labor laws issued since independence, the Central Government has implemented four new labor codes – Wage Code 2019, Industrial Relations Code 2020, Social Security Code 2020 and Working Safety, Health and Working Conditions Code 2020 from November 21, 2025. When these bills were brought in Parliament five years ago, Minister of State for Labor and Employment (Independent Charge) Santosh Gangwar had said in the Rajya Sabha that these bills would be a “game changer” for labor force welfare, which would benefit more than 50 crore workers in the organized and unorganized sector. The government claims that these are labor reforms and through them the labor system in the country will be modernized, business processes will be simplified, and workers’ rights will be strengthened. These have been implemented in both organized and unorganized sectors and changes have been made in entitlements such as working hours, leave and social security.
However, ten big labor unions of the country have described the Labor Code as a “fraud” against the workers. Almost all labor unions demanded withdrawal of these laws. Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), All India United Trade Union Center (AIUTUC), Hind Mazdoor Sabha (HMS), Center of Indian Trade Unions (CITU), Trade Union Coordination Center (TUCC), Self Employed Women’s Association (SEWA), All India Central Council of Trade Unions (AICCTU), Labor Progressive Federation (LPF) and United Trade Union Congress. (UTUC) etc. have expressed strong opposition to the hiring and firing rules, retrenchment, fixed tenure and drastic reduction in the right to strike. But the RSS-affiliated Bharatiya Mazdoor Sangh (BMS) welcomed it. It described it as a “milestone” in creating a fair, inclusive and strong labor framework. The Center of Indian Trade Unions recently took out a protest march in Bhubaneswar, in which hundreds of workers participated and burned copies of the new laws. Trade unions have consistently opposed these alleged reforms and have organized protests and Bharat Bandhs across the country several times in the last five years.
However, many trade unions have protested against these new laws. The new rules give free rein to companies to hire and fire employees. Through these rules, the size limit of companies for approval of retrenchment has now been increased from 100 to 300. Earlier, even companies with 100 employees had to take approval for layoffs, now companies with 300 employees are also exempted from this. Due to this, laborers have been deprived of their rights that have existed for centuries. These rights of workers were created keeping in mind the long struggle and equality. It remains to be seen how these reforms unfold.
special changes
minimum wage
The scope of minimum wage has been extended to all sectors. The Center will now decide the national base salary and no state government can fix the salary or wages lower than that, so that a uniform minimum standard can be ensured for workers across the country.
gratuity
The period for receiving gratuity for fixed-term employees has been reduced from five years to one year of continuous service. Gratuity is a lump sum amount that employers give to employees for long service.
gig workers
For the first time, gig workers have been brought under social security provision. Aggregators will have to contribute one percent of their annual turnover into the fund to provide for their life, disability and health insurance.
changed definition of salary
In the new definition of “salary”, at least 50 percent of the total salary must be basic salary. This may reduce the monthly income of some employees, but a large part of the salary will now be provided as provident fund and gratuity.
Appointment letter required
Appointment letter is now mandatory in all sectors, including informal recruitment. This provides documentary evidence of entitlement to salary and social security.
accident while commuting
Accidents occurring while traveling between home and work have been included in the job category so that employees are entitled to compensation.
salary on time
It is necessary to pay the salary within the stipulated time, like the month’s salary has to be paid within seven days of the next month, and on termination or resignation, it is absolutely mandatory to pay the salary within two days.
women’s night shift
Women are now allowed to work in night shifts (before 6 am and after 7 pm) everywhere, provided that they agree and the employer ensures necessary safety measures.
media personnel
Journalists, OTT workers, digital creators, dubbing artists and crew members should now receive formal appointment letters detailing salary, working hours and entitlements.
holiday and overtime
The period of annual paid leave has been reduced from 240 days to 180 days. Employees who work longer than normal hours should be compensated for those hours at double the pay rate.
annual health checkup
All employees aged 40 years and above will have to be provided the facility of free annual health checkup or test.
