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Rules, Rights & Rites -1 - Implementation of the Four Labour Codes.

 Rules, Rights & Rites -1 - Implementation of the Four Labour Codes.

 

I usually post all important items related to official rulings, union news, and other general matters on my YouTube channels: Yourskayveeyes (English) and Anbudan Kayveeyes (Tamil).

However, due to the recent spate of orders and the high volume of information being received, I have not been able to convert every item into a video. Therefore, I am introducing these new slots to post current matters and updates that have not yet been published on YouTube. This ensures you stay informed on every detail, even if a video hasn't been made yet …………….Kayveeyes

 

Outlines the key points from the Press Information Bureau (PIB) release, dated November 21, 2025, regarding the implementation of the Four Labour Codes.

  • The Government of India announced that the Four Labour Codes are being made effective from November 21, 2025. These codes rationalize 29 existing labour laws.

·        The four specific codes that have been made effective are:

  • The Code on Wages, 2019
  • The Industrial Relations Code, 2020
  • The Code on Social Security, 2020
  • The Occupational Safety, Health and Working Conditions Code, 2020.

·        The implementation of the Codes aims for a "Transformational Change" with the following goals:

  • Better wages, safety, social security, and enhanced welfare for India's workforce.
  • Modernizing labour regulations and aligning the labour ecosystem with the evolving world of work.
  • Laying the foundation for a protected, future-ready workforce and stronger, resilient industries.
  • Aligning India's labour ecosystem with global standards and ensuring social justice for all workers.
  • Reaffirming the Government's commitment to a pro-worker, pro-women, pro-youth, and pro-employment labour ecosystem.
  • The Codes further widen the social-security net and embed portability of benefits across states and sectors.
  • Social security coverage has dramatically expanded from about 19% of the workforce in 2015 to more than 64% in 2025.
  • The Codes place workers, especially women, youth, unorganised, gig, and migrant workers, firmly at the center of labour governance.
  • By reducing compliance burden and enabling flexible, modern work arrangements, the Codes are expected to boost employment, skilling, and industry growth.
  • During the transition, the relevant provisions of the existing labour Acts and their respective rules, regulations, notifications, standards, schemes, etc., will continue to remain in force.
  • The Government will continue to engage the public and stakeholders in the framing of the corresponding rules, regulations, schemes, etc. under the Codes.

Comparison between the Old Rules and the New Labour Codes, focusing on the most significant changes:

Feature

Old Rules (29 Separate Laws)

New Four Labour Codes (Coded Laws)

I. Compliance & Administration

Number of Laws

29 different Central Labour Laws.

Consolidated into 4 Codes (Wage, IR, Social Security, OSHWC).

Compliance Structure

Complex, fragmented system requiring multiple registrations (up to 8), licenses (up to 4), forms (181), and returns (31).

Unified, simplified structure: One Registration, One Licence, and One Electronic Return.

Inspection System

Traditional "Inspector Raj" with discretionary and often punitive enforcement.

Inspector-cum-Facilitator System: Role shifts to guidance, awareness, and compliance support, often via randomized, web-based inspections.

II. The Code on Wages, 2019

(Replaces 4 Acts, including Minimum Wages Act, 1948)

Minimum Wage Coverage

Applied only to specific "scheduled employments," covering approximately 30% of the workforce.

Universal Minimum Wage: Statutory right to minimum wages extended to all employees (organized and unorganized sectors).

National Wage Floor

No national benchmark; wages varied widely based on state and region.

National Floor Wage (NFW): Central government sets a floor wage based on minimum living standards; no state can fix minimum wages below this NFW.

Definition of "Wages"

Vague, differing definitions across laws, allowing employers to suppress Basic Pay to minimize PF/Gratuity contributions.

Uniform Definition: Mandates that Basic Pay, Dearness Allowance, and Retaining Allowance must constitute at least 50% of the total remuneration (CTC), ensuring higher statutory contributions (PF, Gratuity, Bonus).

Gender Equality

Equal pay provisions were scattered and less comprehensive.

Explicit Prohibition of Discrimination: Prohibits gender-based discrimination (including transgender identity) in recruitment, wages, and employment conditions for similar work.

Overtime Pay

Varied rules across sectors.

Universal Overtime Mandate: Employers must pay overtime wages at least twice the normal rate for work beyond regular hours.

III. The Industrial Relations Code, 2020

(Replaces 3 Acts, including Industrial Disputes Act, 1947)

Retrenchment/Closure Threshold

Establishments with 100 or more workers needed prior government approval for layoffs, retrenchment, or closure.

Raised Threshold: Approval required only for establishments with 300 or more workers, offering greater operational flexibility for mid-sized firms. (States can raise this further).

Fixed-Term Employment

Not formally defined with comprehensive benefits parity.

Formalized: Fixed-term employees are granted full parity in wages and benefits as permanent employees, including eligibility for gratuity after just one year of service (instead of five).

Appointment Letters

No mandatory requirement; informal arrangements were common.

Mandatory: Employers must issue formal Appointment Letters to all workers, promoting formalization, transparency, and access to benefits.

IV. The Code on Social Security, 2020

(Consolidates 9 Acts, including EPF & ESIC Acts)

Social Security Coverage

Limited, primarily focused on organized sector; gig/platform workers were excluded. Coverage around 19% in 2015.

Universalization: Extends social security coverage to all workers, including the unorganized sector, Gig Workers, and Platform Workers, with aggregators contributing to a dedicated welfare fund. Coverage is now over 64% (as per 2025 data).

ESIC Coverage (Health Insurance)

Limited to specific geographical areas and establishments with 10+ employees.

Pan-India Extension: ESIC coverage is now Pan-India. It is voluntary for units with <10 workers and mandatory even for single-worker units engaged in hazardous processes.

PF/ESIC Appeals

High deposit requirements for appeals (40% to 70%) and lengthy inquiry timelines.

Reduced Appeal Deposit: Deposit requirement for filing an appeal against an EPFO order is reduced to 25% of the awarded amount. Inquiries are time-bound to be completed within two years.

V. The Occupational Safety, Health and Working Conditions Code, 2020

(Replaces 13 Acts, including Factories Act, 1948)

Women's Employment

Restrictions on night shifts and employment in certain occupations (like underground mining).

Expanded Rights: Women are permitted to work in all types of work and during night shifts across all establishments, subject to their consent and provision of adequate safety protocols.

Annual Leave Eligibility

Required 240 days of work to become eligible for paid annual leave.

Reduced Eligibility: Paid annual leave can be availed after working 180 days in a calendar year.

Health Check-ups

No general legal requirement for mandatory check-ups.

Mandatory Check-ups: Employers must provide free annual health check-ups for workers above 40 years of age.

Working Hours

Retained the 8-hour workday, 48-hour workweek standard.

Retains 8-hour/48-hour limit: Introduces flexibility for employers and workers to agree on 12-hour shifts for four days a week, provided the total 48-hour limit is maintained and double overtime pay is guaranteed.

·        The Central Trade Unions (CTUs) strongly object to the newly implemented Four Labour Codes, viewing them as "anti-worker and pro-employer" legislation that dismantles decades of hard-won worker rights. They collectively termed the notification a "deceptive fraud" against the working people of India.

  • "Hire and Fire" Policy: This is the most contested issue. The Industrial Relations Code, 2020 raises the threshold for requiring prior government approval for layoffs, retrenchment, or closure from establishments employing 100 workers to 300 workers. The CTUs argue this gives a "licence to implement layoffs at will" for the vast majority of mid-sized firms, significantly weakening job security and introducing a "hire and fire" regime.
  • Curtailment of Right to Strike: The Codes are alleged to snatch away the right to strike and criminalize collective action by widening the definition of 'strike' and mandating a 14-day notice period for all sectors, which makes it harder for workers to negotiate and fight for their rights.
  • Although the 48-hour workweek remains, the provision allowing 12-hour workdays is viewed as a measure that will push workers into longer and more exhausting schedules, increasing pressure and adversely affecting health.
  • The formalization of Fixed-Term Employment is criticized for paving the way for further informalization and contractualisation of labour, as it allows companies to hire non-permanent workers for perennial vacancies.
  • The CTUs condemn the gross violation of democratic norms, stating that the government sidelined, ignored, and refused to hold genuine tripartite consultations with stakeholders, especially workers and unions, throughout the process. They point out the repeated failure to convene the Indian Labour Conference.
  • The new system, which reportedly defines "worker" only as those earning below ₹18,000, is argued to shrink the organized workforce and make it more difficult to form unions, thereby weakening the collective bargaining power of employees.
  • Despite the government's claim of universal social security, the CTUs argue that the Codes fail to ensure comprehensive and mandatory social security for the vast majority of unorganized, gig, and informal sector workers, claiming that a large section has been cleverly pushed out of the "worker" definition.
  • Although the system is renamed Inspector-cum-Facilitator, unions fear this will lead to a weak labour inspection system with less control and monitoring, ultimately diluting industrial safety compliance.
  • The CTUs state the Codes are solely aimed at appeasing corporate interests and establishing a "jungle raj" by unilaterally empowering the corporate class under the deceptive slogan of 'Ease of Doing Business'.
  • The implementation was deemed "arbitrary and undemocratic", especially as the Codes were rushed through Parliament without debate amidst an opposition boycott.

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