Indian Trade Union Raise Objections to New Labour Codes

Indian Trade Union Raise Objections to New Labour Codes

Why in News?

Recently, several major Indian trade unions strongly opposed the government’s implementation of the new labour codes and described the step as a serious betrayal of workers’ interests. The unions demanded immediate withdrawal of the laws and warned of nationwide protests if their concerns remain unaddressed.

What is a Labour Code?

• About: The labour code is a unified legal framework that brings together multiple labour laws into a single, streamlined structure to regulate wages, working conditions, industrial relations, and social security for workers.  

• Purpose: The purpose of a labour code is to create a modern and predictable labour environment that protects workers’ welfare while supporting efficient business operations.

• New LCs: The Indian government has introduced four major consolidated labour codes, which officially came into effect on 21 November 2025. These codes replace 29 older central labour laws to improve worker protection, and modernise India’s labour governance. The four are:

• Code on Wages, 2019
• Industrial Relations Code, 2020
• Code on Social Security, 2020
• Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020

• Significance: These four codes are the biggest overhaul of labour laws in decades to modernise India’s labour economy by reducing fragmentation, simplifying compliance, and promoting formal employment. They bring more workers under legal protection — including gig workers, platform workers, fixed-term workers, and informal sector workers. The reforms also emphasise gender equality, health, and safety more strongly than before.

Provisions of All 4 New Labour Codes:

1. Code on Wages, 2019

• The Code on Wages unifies various wage-related laws into a single framework. It sets a uniform definition of “wages” to remove ambiguity and avoid litigation. 
• It provides for a national floor minimum wage so that no worker is paid below a certain baseline, despite regional cost differences. 
• The code makes timely payment of wages a legal right. Employers must pay wages on a fixed schedule (daily, weekly, monthly, etc.) and clear dues quickly when someone resigns. 
• For overtime, any work beyond the regular hours must be paid at double the normal wages, thus compensating workers fairly for extra hours.
• The code also mandates wage slips for all workers. These slips (digital or physical) must break down salary components, deductions, and net pay for transparency.
• It requires equal pay for equal work, irrespective of gender identity. Discrimination in wages based on gender, including transgender identity, is prohibited. 
• The code makes it mandatory for every worker to have a formal appointment letter. The letter must clearly state the job role, wage, and other entitlements.
• These provisions aim to protect workers in both formal and informal sectors, including gig workers, by ensuring they get at least the minimum wage and transparency in payment.

2. Industrial Relations Code, 2020

• The Industrial Relations Code (IR Code) merges and replaces three earlier laws: the Trade Unions Act, the Industrial Disputes Act, and the Industrial Employment (Standing Orders) Act. 
• It raises the threshold for requiring government permission for layoffs, retrenchment, or closure. Under this code, approval is needed only if a company has 300 or more workers, instead of the earlier threshold of 100. 
• The code formalises fixed-term employment. Under this, workers hired for a fixed period get many of the same rights as permanent employees, such as leave, social security, and gratuity.
• It strengthens dispute resolution mechanisms: it revises how disputes between workers and employers are handled, encouraging conciliation first and, if needed, setting up two-member industrial tribunals for faster adjudication.
• The IR Code also regulates strikes and lockouts: it sets procedures for lawful strikes, requires notice, and defines illegal strikes.

3. Code on Social Security, 2020

• This code extends social security coverage to many categories of workers who were earlier outside formal systems: gig workers, platform workers, migrant workers, and workers in the unorganised sector. 
• It brings together several old laws, such as Employees’ Provident Fund, Maternity Benefit Act, Employees’ Compensation Act, Gratuity Act, Employees’ State Insurance Act, and others, into one code.
• Under this code, aggregators or platforms (for gig work) must contribute to a social security fund. This helps create a formal social security safety net for them. 
• The code ensures gratuity for fixed-term workers after one year of service, which is a big improvement compared to earlier laws that required longer tenure. 
• For hazardous industries and sectors such as mining or plantation work, even a single employee can be covered under social security provisions.
• The code makes social security portable across states. Workers can move between states and carry their benefits with them. 
• It also mandates welfare facilities like rest areas, drinking water, and canteens for workers in different sectors.

4. Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020

• The OSHWC Code consolidates 13 older labour laws, including the Factories Act (1948), Mines Act, Building and Construction Workers Act, Contract Labour Act, Inter-State Migrant Workmen Act, and more. 
• It standardises working hours: employees can work between 8 and 12 hours per day, but weekly working hours must not exceed 48 hours. 
• It enforces double wages for overtime work beyond prescribed hours. For workers over the age of 40, the code mandates free annual health check-ups paid by the employer.
• The code requires safety measures and welfare facilities in workplaces: this includes proper sanitation, restrooms, drinking water, and restrooms.
• For women workers, the code allows night work with their consent but insists on strict safety protocols.
• It introduces a single-registration, single-licence, and single-return system for establishments. This simplifies compliance significantly.
• The code replaces traditional harsh inspection regimes with an inspector-cum-facilitator model. Inspectors are expected to guide employers and help them comply rather than only penalise.

Why Indian Trade Unions raised Objections to New Labour Codes?

• Weaken Job Security: Unions claim the new rules reduce worker protection. They say the threshold for required government approval of layoffs and closures rose to 300 workers from 100 and this change will let many firms lay off staff more easily. They say the move removes a key safeguard that existed for decades. They fear the nation will see more abrupt job losses in factories and large units. 

• No Longer Shifts: Unions point out the new codes permit longer daily shifts up to 12 hours and allow night work for some groups and this will raise worker fatigue. They fear that fatigue will increase accidents and lower health. They argue that allowing wider night shifts for women will expose them to safety risks unless strict measures appear. They demand clearer rules on hours and breaks. They demand independent enforcement of safety standards.

• fixed term employment: Unions object to the expanded use of fixed term contracts in the new framework. They say the codes make fixed term hires almost equal to permanent hires in benefits while leaving core protections weaker. Employers will prefer short term contracts to avoid long term obligations. They argue this will increase job insecurity for millions of workers. They say gig and platform workers may face intermittent work without guaranteed income. 

• Social Security: Unions note the new social security provisions promise coverage for gig and platform workers. They say the promise sounds positive on paper but funds and administrative systems will need time to function. They worry that the burden may fall on workers if contribution rules prove weak. They ask for explicit employer liability and clear funding formulas and demand binding guarantees for universal social security rather than vague assurances.

• Inspection Changes: Unions criticise the shift from traditional inspector roles to an inspector as facilitator model. They say this rewrite could reduce routine enforcement. They want regular audits and independent checks as many safety and wage violations persist in informal sectors. They insist that any easing of compliance must not dilute worker remedies.

Way Forward

• India needs a balanced path that protects workers and supports economic growth. The government should reopen structured talks with all major trade unions and independent worker groups.
• The government should set up a clear review panel with representatives from unions, industry bodies, labour experts and state governments. The panel should track the early impact of the new labour codes across sectors.
• The government should design stronger rules on shift limits and workplace safety. Inspectors should get training to enforce laws with consistency. The government should allow digital reporting of violations. It should protect whistle-blowers. 
• The government should prepare a clear road map that shows how funds will be collected and how benefits will reach workers across states. There should be a simple digital platform where every worker can check eligibility, contributions and claims. The government should set strict deadlines for companies.
• The government should create time-bound dispute resolution mechanisms. Workers should get access to legal assistance and employers should get clear rules on closure, retrenchment and compensation. Fast and fair processes will reduce strikes and lockouts.
• The codes need awareness campaigns. Workers should understand their rights under the new legal framework. The government should partner with unions, civil society groups and industry associations to run workshops in major industrial clusters. Effective communication will reduce confusion.