Centre Notifies Four New Labour Codes, Marking a Major Overhaul of India’s Labour Law Framework

Context:

• The Union Government has notified the four new Labour Codes, effective from Friday, signalling one of the most comprehensive reforms of India’s labour governance framework.

• These Codes replace a complex web of 29 pre- and post-Independence labour laws, aiming to align labour regulation with modern economic realities, workforce diversification, and social justice goals.

Key Highlights:

Structural Reform of Labour Laws

• Consolidation of 29 central labour laws into four comprehensive Codes:

  • Code on Wages

  • Industrial Relations Code

  • Code on Social Security

  • Occupational Safety, Health and Working Conditions Code

Social Security Expansion

• Universal social security coverage extended to:

  • Gig workers

  • Platform workers

  • Unorganised workers

• Statutory recognition of aggregators and platform-based employment.

Wages & Employment Conditions

• Statutory backing for minimum wages across sectors.

• Introduction of a national floor wage to reduce regional wage disparities.

• Fixed-term employment formally recognised, with entitlement to:

  • Wages and benefits equal to permanent workers

  • Social security and statutory benefits

Gender & Worker Welfare Measures

• Emphasis on gender pay parity.

• Enhanced safety and welfare provisions for women workers.

• New welfare measures such as:

  • Free annual health check-ups for workers above 40 years of age

Implementation Roadmap

• Government to initiate consultations with states and stakeholders.

• Detailed rules and schemes to be framed for effective implementation.

Relevant Prelims Points:

• Issue: Fragmented and outdated labour laws unsuited to modern labour markets.

• Causes:

  • Rise of gig and platform economy

  • Informalisation of employment

• Government Initiative:

  • Notification of four Labour Codes

• Key Features:

  • Universal social security

  • Fixed-term employment

  • National floor wage

• Benefits:

  • Simplified compliance

  • Formalisation of workforce

  • Protection for gig and unorganised workers

• Challenges:

  • Opposition from trade unions

  • Implementation capacity at state level

• Impact:

  • Greater labour market flexibility with social protection

Relevant Mains Points:

• Key Concepts & Definitions:

  • Gig Workers: Workers outside traditional employer–employee relationships, often platform-based

  • Social Security: Income and welfare protection against life-cycle risks

• Governance & Polity Dimensions:

  • Shift from fragmented regulation to code-based governance

  • Enhanced role of Centre–State coordination in labour reforms

• Economic Perspective:

  • Balances ease of doing business with worker welfare

  • Facilitates investment through regulatory certainty

• Social Justice Aspect:

  • Inclusion of informal and gig workers in statutory safety nets

  • Promotion of gender equality and dignified working conditions

• Concerns Raised:

  • Trade unions term the Codes as pro-employer, fearing dilution of labour protections

  • Need to ensure safeguards against arbitrary retrenchment and contract misuse

• Way Forward:

  • Broad-based stakeholder consultations

  • Transparent and worker-centric rule-making

  • Strengthen grievance redressal and enforcement mechanisms

UPSC Relevance (GS-wise):

• GS 2: Polity, Governance, Social Justice

• GS 3: Economy, Labour Reforms, Employment

• Prelims: Labour Codes, Gig Workers, Social Security