Withdraw Wage Codes, Restore Justice to Workers
-Bruhaspati Samal-
The notification issued by the Government of Odisha on 11 February 2026, under the Labour and ESI Department, marks yet another decisive step in implementing the controversial labour codes framed by the Union Government, particularly the Code on Wages, 2019. While the notification appears administrative in nature—repealing the long-standing Odisha Payment of Wages Rules, 1936 and Odisha Minimum Wages Rules, 1954—it symbolises a deeper structural shift in India’s labour regime. This shift has triggered intense resistance from Central Trade Unions and independent federations, culminating in the nationwide general strike on 12 February 2026. At the heart of this agitation lies a fundamental concern: the systematic dilution of statutory protections that workers had secured through decades of struggle under laws like the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936. The new Odisha Code on Wages Rules, 2026, though framed under the umbrella of “simplification” and “uniformity,” effectively weaken the enforceability, universality, and adequacy of wages.
The Code on Wages, 2019 was projected as a progressive reform, aiming to ensure a universal minimum wage and timely payment of wages. However, its implementation reveals a different reality. The Code replaces the statutory concept of “minimum wages” with a vague “floor wage” to be fixed by the Central Government. This floor wage is non-binding in practical terms, allowing states to fix wages at levels barely above subsistence. According to labour economists, India’s statutory minimum wages currently vary widely—from less than Rs. 200 per day in some states to about Rs. 500 in others—while the Indian Labour Conference’s 15th session recommended a need-based minimum wage that today would exceed Rs. 750 per day for a family of four.
The Odisha Rules, 2026 follow this diluted framework. While they prescribe criteria such as calorie intake, clothing, and housing, they do not mandate adherence to the historically accepted norms laid down by the Indian Labour Conference or Supreme Court judgments. Instead, wage fixation is left to executive discretion, guided by fiscal considerations rather than workers’ survival needs. This effectively undermines the very spirit of the Minimum Wages Act, which treated minimum wages as a non-negotiable right linked to human dignity. Another major concern arises from the categorisation of labour. The Odisha Rules empower a Technical Committee to revise skill classifications. While this appears administrative, trade unions fear that arbitrary reclassification can push workers into lower wage brackets. In sectors such as construction, textiles, and informal services—where over 90% of India’s workforce is employed—such reclassification can directly reduce wages. According to Periodic Labour Force Survey data, nearly 77% of Indian workers are in informal employment, making them particularly vulnerable to such policy changes.
Equally alarming is the provision under Chapter III of the Odisha Rules, which allows deductions up to 50% of wages, to be recovered in instalments. Under earlier laws, deductions were tightly regulated to protect take-home pay. In a country where the average monthly earnings of casual workers hover around Rs. 8,000–Rs. 10,000, such deductions can push families into debt traps. The requirement for employers to merely “notify” deductions to an Inspector-cum-Facilitator further weakens enforcement, replacing strict compliance with a facilitative regime that prioritises ease of doing business over workers’ rights. The transformation of the labour inspection system into an “Inspector-cum-Facilitator” model is another contentious feature. While intended to reduce harassment of employers, it has effectively diluted the punitive power of inspections. Labour law enforcement in India was already weak, with less than one inspector per 20,000 workers in many states. The new framework further reduces deterrence against violations, increasing the likelihood of wage theft and non-compliance.
The constitution of a State Advisory Board, as envisaged in the Odisha Rules, also raises questions. Though it includes representatives of employers and employees, the government retains decisive control. Historically, tripartite bodies under labour laws functioned as consultative forums, but their recommendations were often non-binding. Trade unions argue that without statutory backing for their decisions, such boards become symbolic rather than effective. Perhaps the most regressive provision lies in the handling of undisbursed wages. The requirement to deposit unpaid dues with the Divisional Labour Commissioner after six months, coupled with bureaucratic claim procedures, may delay or deny rightful payments to workers’ families. In a system already plagued by delays, such provisions risk institutionalising injustice rather than resolving it.
The larger critique of the labour codes extends beyond wages. The consolidation of 29 labour laws into four codes—including the Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Social Security Code—has been perceived by trade unions as a rollback of hard-won rights. For instance, the threshold for requiring government permission for layoffs has been increased from 100 to 300 workers, effectively allowing easier retrenchment. Fixed-term employment provisions enable hire-and-fire practices, undermining job security.
From a constitutional perspective, the dilution of wage protections raises concerns under Article 21, which guarantees the right to life with dignity. The Supreme Court has repeatedly held that non-payment of minimum wages amounts to forced labour. By weakening the enforceability of minimum wages, the new regime may undermine this constitutional safeguard.
The way forward requires a balanced approach that reconciles economic growth with social justice. First, the concept of a statutory national minimum wage, based on the Indian Labour Conference norms, must be reinstated with legal enforceability. Second, wage fixation should be indexed to inflation, ensuring automatic revisions linked to the Consumer Price Index. Third, the labour inspection system must be strengthened rather than diluted, with digital transparency but robust enforcement powers. Fourth, tripartite bodies like Advisory Boards should be given binding authority in wage determination. Finally, any labour reform must be preceded by meaningful consultation with trade unions, ensuring democratic participation in policy-making.
The Government of Odisha, as well as the Union Government, must recognise that labour is not merely a factor of production but the backbone of the economy. Sustainable growth cannot be built on precarious employment and suppressed wages. As Mahatma Gandhi reminded us, “Recall the face of the poorest and the weakest man… and ask yourself if the step you contemplate is going to be of any use to him.” The labour codes, in their present form, fail this test. The demand raised by millions of workers across the country is not merely for higher wages but for dignity, security, and justice. Ignoring this call may deepen social unrest. Listening to it, however, offers an opportunity to build a more equitable and humane economic order.
(The author is a Service Union Representative and a columnist who is currently working as the General Secretary, Confederation of Central Govt. Employees and Workers, Odisha State CoC and also as the President, Forum of Civil Pensioners’ Association, Odisha State Committee, Bhubaneswar. eMail: samalbruhaspati@gmail.com)
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