Introduction: The Historical Context And Need For Reform
India's labour regulatory framework, prior to the codification process, consisted of 29 central laws and over 100 state laws, many dating back to the colonial era (e.g., the Factories Act, 1948; Trade Unions Act, 1926).

• Complexity and Overlapping Jurisdiction: Multiple definitions of "wages," "employee," and "establishment" created legal confusion.
• Inflexibility: Rigid retrenchment norms discouraged formal sector employment, especially in manufacturing.
• Exclusion: Over 90% of India's workforce (465 million) worked informally and lacked statutory protections (Periodic Labour Force Survey, PLFS, 2022-23).

The government initiated codification under the banner of "minimum government, maximum governance," seeking to align labour policy with the Ease of Doing Business ethos and India's formalization agenda under the Digital India and Startup India missions.

The Four Labour Codes: Structural Features And Objectives

The Code On Wages, 2019

• Objective: To universalize wage entitlements and ensure gender and inter-sectoral equity.
• Key Structural Shifts:
  • Single definition of "wages" across laws, with up to 50% earmarked as basic pay for calculating social benefits.
  • Floor wage determined by the Centre based on cost of living; allows state-specific minimum wages above this benchmark.
  • Equal remuneration clause aligns with India's international commitments under ILO Convention No. 100 (ratified).
• Data-Driven Context:
  • Over 33% of wage workers in India earn less than ₹5,000/month (PLFS, 2023).
  • Gender wage gap in India stood at 28% in 2021, one of the highest in Asia-Pacific (UN Women Report, 2022).
  • Rural-urban wage disparities remain stark: ₹7,500/month in rural areas vs. ₹15,000/month in urban India.

The Industrial Relations Code, 2020

• Objective: To promote industrial harmony, ease retrenchment regulations, and streamline union recognition.
• Key Provisions:
  • Retrenchment Threshold Raised: Companies with up to 300 workers can hire and fire without state approval.
  • Fixed-Term Employment (FTE): Formalizes short contracts with statutory benefits—aligned with global seasonal labour trends.
  • Recognition of Sole Negotiating Union: Empowers a single majority union (51%+ members) for dispute resolution.
• Analysis:
  • Only 1 in 5 manufacturing firms with 100+ workers reports union activity (World Bank Enterprise Survey, 2022).
  • FTE employment grew 25% in apparel and leather industries between 2020–23 (Textile Ministry Data).
  • Retrenchment relaxation modeled on Rajasthan's reform (2014), which showed a 12% increase in employment in large firms post-threshold raise (NIPFP Study, 2019).
• Concerns:
  • No provision for advance notice to workers in FTE, unlike permanent jobs.
  • Dispute resolution forums remain under-resourced—with over 1.2 million pending cases in labour courts (as of 2024).

The Code On Social Security, 2020

• Objective: Expand coverage to informal, gig, and platform workers and consolidate benefits under a unified system.
• Key Innovations:
  • Formal inclusion of gig and platform workers: For the first time, terms like "platform worker" are defined in Indian law.
  • e-Shram portal integration: Centralized Aadhaar-linked database for over 290 million unorganized workers (Labour Ministry, 2024).
  • Aggregator Contribution: Draft rules propose a 1-2% levy on platform companies' gross revenue toward gig worker welfare.
• Structural Gaps:
  • No mandatory contributory ratio defined for state, employer, and worker—raising feasibility questions.
  • Platform economy projected to reach 23.5 million workers by 2030 (BCG Report, 2023)—but welfare fund corpus remains minimal (₹350 crore in FY 2023-24 budget).

The Occupational Safety, Health And Working Conditions Code (OSHWC), 2020

• Objective: Improve workplace health and safety, especially in hazardous industries and migrant-heavy sectors.
• Key Provisions:
  • Mandatory registration for establishments with 10+ workers.
  • Annual health check-ups, especially in hazardous sectors.
  • Formalization of employment through appointment letters, including in informal sectors.
  • Inter-State Migrant Registration with benefit portability.
• Ground Reality:
  • Over 60% of India's workforce is in high-risk environments (construction, mining, sanitation).
  • Only 35% of factories comply fully with safety norms (CAG report, 2022).
  • Migrant worker fatalities during COVID-19 lockdown (2020) exposed systemic neglect—972 deaths recorded during reverse migration (SaveLIFE Foundation, 2021).

Comparative Perspectives

• Indonesia (2019): "Omnibus Law" on job creation
  • Increased foreign investment
  • Drew ILO scrutiny for weakening worker rights
• Brazil (2017): Labour reform allowing outsourcing & temporary contracts
  • Boosted GDP by 1.6% in 2 years
  • Created dual labour market
• Vietnam (2012–20): Phased expansion of social protection
  • Achieved over 60% formal coverage of the working population

Lessons for India

• Success hinges on:
  • Gradual rollout
  • Tripartite negotiation
  • Public financing models that do not disproportionately burden employers or workers
     

Conclusion: From Legislative Promise to Economic Reality

• India's Labour Codes represent:
  • Simplification
  • Digitization
  • Universalization
• However, execution at ground level remains a challenge.
   

Recommendations for Realization

• Establish a National Labour Code Implementation Council for Centre-State rule harmonization.
• Create Labour Law Facilitation Cells for MSMEs—via SIDBI or NSIC.
• Launch a ₹5,000 crore Social Security Transition Fund for gig and informal worker support.
• Invest in:
  • Capacity-building of state labour departments
  • Digital skilling
  • Mobile-based platforms for worker redressal
• Enact a staggered rollout strategy, starting with urban clusters and large industries before scaling to rural and informal sectors.