On November 21, 2025, the Government of India finally operationalised all four new Labour Codes, consolidating 29 existing central labour laws into a modern, simplified framework. The codes cover Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions (OSHWC).
While the Modi government has termed it a “historic reform” to boost ease of doing business and extend social security to gig and unorganised workers, the Congress and major trade unions have called it “anti-worker” and a dilution of hard-won rights.
Major Highlights of the Four Labour Codes 2025
| Code | Key Changes Introduced |
|---|---|
| Code on Wages, 2019 | Universal statutory minimum wage + National Floor Wage; no state can fix below floor level |
| Industrial Relations Code, 2020 | Lay-off/retrenchment/closure threshold raised from 100 to 300 workers (no prior govt permission needed below 300) |
| Code on Social Security, 2020 | First-time social security for gig & platform workers; aggregators to contribute 1-2% of turnover |
| OSH & Working Conditions, 2020 |
Key Features of the New Labour Codes
The new framework replaces decades-old legislation, some dating back to the pre-Independence era (1930s-1950s), with four unified codes: The Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions (OSHWC) Code (2020).
The key factual changes introduced by the government are:
- Universal Minimum Wage and Floor Wage: The Code on Wages guarantees a statutory right to minimum wages for all employees across both organised and unorganised sectors, a coverage previously limited to specific ‘scheduled employments’ affecting an estimated 30% of workers. It mandates a National Floor Wage below which no state can set its minimum wages.
- Social Security for Gig Workers: The Code on Social Security formally defines and extends social security coverage to gig and platform workers for the first time. Aggregators are required to contribute 1–2% of their annual turnover (capped at 5% of payouts to workers) to a dedicated welfare fund.
- Easier Formalisation: The codes make mandatory appointment letters for all workers, including those in the unorganised sector, to formalise employment and create a work history.
- Fixed-Term Employment Benefits: Fixed-term employees (FTEs) are now entitled to all statutory benefits on par with permanent workers, including gratuity eligibility after just one year of service, down from the previous five-year requirement.
- Night Work for Women: Women are permitted to work night shifts across all establishments, including factories and mines, provided their consent is obtained and mandated safety measures are in place.
- Simplified Compliance: The codes introduce a system of single registration, single licence, and single annual return for an establishment, replacing a complex system of multiple filings under the old laws.
Opposition Critique: Focus on Dilution of Worker Rights
The principal opposition to the codes centres on specific provisions that critics argue tilt the power balance heavily toward employers, and the codes’ failure to meet what they define as fundamental worker demands.
Jairam Ramesh’s Core Allegations
Congress General Secretary Jairam Ramesh strongly criticised the implementation, arguing that the new codes merely “re-packaged 29 existing labour-related laws” without delivering justice to the core workforce. In his post on social media platform X, Ramesh highlighted two primary factual areas of contention:
- Rules Not Fully Notified: Ramesh pointed out that despite the implementation date, the complete Rules for the new codes have yet to be fully notified, which is essential for their functional enforcement. This lack of full notification, he argued, undermines the projected revolutionary nature of the reform.
- Failure to Meet ‘Shramik Nyay’ Demands: Ramesh stated that the codes fail to meet five essential demands outlined in the Congress’s ‘Shramik Nyay’ platform. The specific demands cited by him were:
- A National Minimum Wage of ₹400 per day, including for MGNREGA workers.
- An Employment Guarantee Act for urban areas.
- A Right to Health law ensuring universal health coverage worth ₹25 lakh.
- Full social security for all unorganised workers, including life and accident insurance.
- A commitment to end contractual employment in core government functions.
Industrial Relations and Lay-off Threshold
The other major factual point of contention is the change in the threshold for lay-offs, retrenchment, and establishment closure under the Industrial Relations Code, 2020.
- Old Law: Companies with up to 100 workers required mandatory prior government approval for lay-offs, retrenchment, or closure.
- New Code: This threshold has been raised to 300 workers.
Trade unions argue that this higher threshold makes it easier for mid-sized factories and establishments (employing between 101 and 299 workers) to fire workers without seeking government permission, thereby reducing job security and weakening the collective bargaining power of workers.
Authentic FAQs on the Labour Codes
1. What is the impact of the new Industrial Relations Code on job security?
The Industrial Relations Code, 2020 raises the threshold for requiring mandatory government approval for lay-offs, retrenchment, or closure of an establishment from 100 to 300 employees. The government argues this promotes the ease of doing business by providing operational flexibility to employers. However, critics argue this provision weakens job security for workers in establishments employing up to 299 people, making it easier for companies to downsize unilaterally.
2. How are ‘Gig Workers’ defined and covered under the new laws?
The Code on Social Security, 2020 formally defines a ‘Gig Worker‘ as a person who works outside of a traditional employer-employee relationship and a ‘Platform Worker’ as one who accesses work through an online platform. For the first time, these workers are eligible for social security benefits (such as life and disability cover, health and maternity benefits) through a dedicated fund financed by mandatory contributions from aggregators (the companies they work for) at 1–2% of turnover, capped at 5% of the total payments to the workers.
3. What is the status of the “Rules” for the new Codes?
While the four Labour Codes have been notified and brought into effect, the finalisation and publication of detailed Rules for their implementation falls under the concurrent jurisdiction of both the Central and State Governments. The Central Government has initiated the process for framing these rules, but their final notification is a prerequisite for the complete and practical enforcement of all provisions across the country, a point raised by the Opposition.