Labour Reforms or Rights Erosion?

 Labour Reforms or Rights Erosion?

Labour Reforms or Rights Erosion?

-Bruhaspati Samal-

In the political economy of contemporary India, few reforms have invited such sharp polarisation as the four Labour Codes notified for nationwide implementation through the Gazette Notification dated 21 November 2025. Even before the ink on the notification dried, the streets began to reverberate with protests from Central Trade Unions, independent federations, and workers’ collectives across the country. As alleged, the present Government’s approach beginning 2019–20 to club the laws into the Code on Wages, Industrial Relations Code, Code on Social Security, and the Occupational Safety, Health and Working Conditions Code are pro-corporate, dilute long-established labour rights, lengthen the working day, weaken workplace safety, restrict formation and functioning of trade unions, and endanger the social security framework that evolved through 44 specialised labour laws painstakingly enacted over nearly a century. Instead, the Government describes it as simplification, rationalisation, and a catalyst for “ease of doing business.” The divergence between the two narratives reflects a deeper conflict—between the objective of economic efficiency and the imperative of protecting labour rights. Though ostensibly a rationalisation exercise, the devil lies in the detail—where many protective provisions have been diluted or left open-ended, risking enormous consequences for India’s 50-crore-strong workforce.

 

The Code on Wages is the first example of this ambiguity. It unifies the Minimum Wages Act, Payment of Wages Act, Bonus Act, and Equal Remuneration Act under a single legislative umbrella. On paper, it seeks uniformity, but the core concern remains that the Code does not mandate a binding national floor wage. States may still legally fix wages below this benchmark, thereby defeating the purpose of creating minimum income security for workers. Moreover, the criteria for determining wages have subtly shifted away from established norms such as the Supreme Court’s historic Workmen vs. Reptakos Brett judgment of 1992, which linked minimum wage to nutrition, clothing, housing, fuel, education, and social obligations. By making wage fixation a matter of executive discretion, the Code risks legitimising artificially low wages under the guise of competitiveness, a fear repeatedly expressed by trade unions.

The Industrial Relations Code is arguably the most controversial of all. It raises the threshold for the applicability of Standing Orders from establishments with 100 workers to those with 300, effectively allowing a large proportion of workplaces to hire and fire workers without due process. This single change alters the bargaining power of nearly 70 per cent of workers in the organised sector. Additionally, the Code makes strikes harder by making prior notice mandatory even in sectors that have never been classified as public utilities. It further introduces the concept of a sole negotiating union, requiring at least 51 per cent membership. In a country where workplaces are often diverse and unions may represent different categories of workers, this rule restricts plurality and weakens smaller unions. As India’s workforce increasingly shifts towards gig employment, fixed-term contracts, and platform-based jobs, shrinking the space for collective bargaining threatens to erode the very foundation of the labour movement.

The Code on Social Security, which promises universal coverage, presents another layer of concern. It claims to bring gig workers, platform workers, and unorganised workers under its ambit. However, the language of the Code is largely discretionary, allowing the Government to “frame schemes” without creating binding statutory obligations. Funding mechanisms are vague, employer contributions are uncertain, and the cap on contributions from aggregators risks making benefits too small to matter. The earlier protections provided under specialised laws such as the Maternity Benefit Act or the Unorganised Workers’ Social Security Act may lose their distinctiveness within this broad, non-committal framework. Pensioners, too, view these changes with apprehension because the consolidation can open pathways for future restructuring of the Employees’ Pension Scheme without adequate consultation or assurance.

The Occupational Safety, Health and Working Conditions Code is equally significant. It replaces thirteen individual laws, including those governing mines, factories, contract labour, and inter-state migrant workers. While the Government argues that it reduces overlap, many of the detailed and mandatory safety requirements of earlier laws have been diluted. The threshold for application has been raised, leaving workers in smaller establishments outside the purview of formal safety regulation. The requirement of displacement allowance and journey allowance for inter-state migrants has been removed, despite past experience—especially the crisis of 2020—showing how vulnerable these workers are. Contract labour regulation has been liberalised to the extent that permanent engagement through contractors may become the norm even in core activities. Critics argue that this emphasis on flexibility undermines essential safeguards that were developed after decades of industrial tragedies and struggles.

The implications of the four Labour Codes reach far beyond legal drafting and touch the core realities of India’s labour landscape, which is already marked by long working hours, low wages, high informality, and one of the world’s highest rates of occupational injuries. Official records note over four lakh injuries and more than four thousand workplace deaths annually, though experts believe the actual figures are much higher. In such conditions, any dilution of safety norms or curbs on trade union activity risks creating a labour regime where economic efficiency is pursued at the expense of human dignity. The belief that deregulation automatically boosts employment finds little support in global evidence, which shows that job creation is driven more by investment, technological upgrading, and demand expansion than by weakening labour rights. Insecure workplaces often undermine productivity and long-term industrial stability.

Yet it would be mistaken to conclude that labour reforms are unnecessary. India needs modern frameworks that balance economic dynamism with social justice. This requires reforms that preserve essential rights through genuine tripartite consultation, scientific wage determination, universal and well-funded social security, stronger safety norms, and protected migrant worker benefits. Trade union rights must remain central to industrial democracy, and implementation should be phased, institutionally supported, and accompanied by awareness for smaller establishments. 

Ultimately, labour reforms must emerge from consensus, not confrontation. India’s labour laws were born out of collective struggles and constitutional values centred on justice and dignity. Simplification is welcome, but simplification that sidelines worker welfare is not reform—it is regression. If the Government embraces dialogue and addresses the substantive concerns raised by workers, the Labour Codes can be reshaped into instruments that genuinely promote growth while upholding the rights of the millions who are the backbone of the nation’s economy.

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 (The writer is a Service Union Representative and Columnist. eMail: samalbruhaspati@gmail.com)