Labour Codes: A Transformation In The Labour Ecosystem

The introduction of the new labour codes is expected to strengthen workplace standards across industries by improving safety provisions, ensuring fair wages, expanding social security, and encouraging greater workforce participation. These reforms aim to promote a more secure, transparent, and efficient labour environment, contributing to overall growth and confidence in the labour ecosystem.

About The Labour Codes

Last week four labour codes consolidating 29 were introduced in India by The Ministry of Labour and Employment: the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions (OSHWC) Code (2020) making more sweeper work reforms.

The four new labour codes will secure timely payment of minimum wages for all workers, provide appointment letters to young employees, uphold equal pay and dignity for women, extend social security to nearly 40 crore workers, and allow fixed-term employees to receive gratuity after one year of service. The reforms also promise free annual health check-ups for workers over 40, double wages for overtime, comprehensive health protection for those in hazardous industries, and a framework of social justice aligned with international norms.

Comparison of India’s Labour Ecosystem Before and After the Labour Codes

The labour ecosystem has undergone significant transformation after the recent implementation of the Labour Codes. While appointment letters were not mandatory till the reforns were made the new reforms require employers to issue written contracts to all workers, ensuring transparency and job security. Previously, social security coverage was restricted; however, the Code on Social Security, 2020 expands benefits like PF, ESIC, insurance, and welfare schemes to encompass all workers, including those in gig and platform roles.

Further, there as been an increase in the minimum wages and they are no more only limited to the organised sector under the Code on Wages, 2019 every worker is guaranteed a statutory minimum wage and timely payment. Preventive healthcare, previously lacking in legal mandates, is now reinforced as employers are required to offer free yearly health examinations for employees over 40 years old. Wage payments that weren't previously required to be regulated are now mandatory, ensuring timely disbursement to enhance workers' financial security and morale.

Limits on women's employment, especially regarding night shifts and certain jobs, have been lifted, enabling women to work in all venues with their agreement and proper safety protocols, thus broadening access to higher-paying roles. ESIC coverage, which was once limited to specific areas and sectors, has now been expanded across India, becoming compulsory for businesses with at least one worker in hazardous activities and optional for those with fewer than 10 employees. The previous compliance obligations of numerous registrations, licenses, and returns have been substituted with a streamlined system that includes a single registration, a nationwide single license, and a single return, greatly minimizing administrative difficulties for employers.

Which Sector Will Benefit, and What Do Officials State?

All the organised and unorganised sectors would be benifitted by these labour codes. The Ministry of Labour and Employment mentions that the same will be applicable for audio-visual workers such as journalists, dubbing artists and stunt person. Honb. Prime Minister Shri Narendra Modi on X stated the labour codes to empower workers and increase complaince as well as assuring ease of business. He emphasised to empower oppurtunities for youth and initiatives such as Nari Shakti.

The Indian Express mentions it to be an attempt to increase women participation in the electronic manufacturing industry. The India Electronics & Semiconductor Association (IESA)  states:

Allowing women to work in all roles—including night shifts and specialised operations—with mandatory safety measures will help expand the talent pipeline in semiconductor assembly, verification labs, and 24×7 manufacturing operations. Recognition of gig and platform workers and portability of benefits is a forward-looking addition suited to India’s digital and innovation-driven economy.