The new codes – on Wages (2019), Industrial Relations (2020), Social Security (2020) and Occupational Safety, Health and Working Conditions (2020) – came into effect on Friday, five years after parliamentary approval, replacing 29 labour laws.
This will ensure better wages, safety, social security and welfare for the workforce, the ministry of labour said. “It also significantly simplifies compliance and promotes ease of doing business,” said Prime Minister Narendra Modi on X. India Inc welcomed the move, while most trade unions, barring the government-aligned Bharatiya Mazdoor Sabha, opposed it.
Flexibility for Women
The codes define gig and platform work for the first time, expanding legal and social protection to workers outside traditional employment structures.
They allow longer factory shifts and women to work at night. They raise the threshold for firms requiring prior approval for layoffs to 300 workers from 100 now, giving companies greater flexibility. Some of the key provisions include statutory minimum wages for all workers, guarantee of appointment letters for the youth, along with equal pay for equal work.Besides, the codes will guarantee gratuity for fixed-term employees after one year of employment, as well as free annual health checks for workers above 40 years of age.“These reforms are not just ordinary changes, but an important step towards a self-reliant India and will give new momentum to the goal of a developed India by 2047,” labour minister Mansukh Mandaviya said on X.
The labour ministry is expected to notify the corresponding rules, regulations and schemes under the codes over the next 45 days. During the transition, relevant provisions of the existing labour Acts and their rules, regulations, notifications, standards, schemes will continue to remain in force, it said.
According to the ministry, almost all states, barring West Bengal, have published the draft rules across all four codes. This will help in the smooth rollout. Labour is on the concurrent list, which means the states and the Centre can legislate and formulate rules related to the subject.
Positive Reactions
Companies said the development marks a transformative leap toward a modern, simplified and future-ready labour ecosystem.
“This long-awaited reform brings India in line with global standards, eases compliance, empowers enterprises, and strengthens the foundations for higher productivity, greater competitiveness and accelerated job creation,” said Chandrajit Banerjee, director general, Confederation of Indian Industry.