Labour Gains: The new labour codes align India with the best international practices
(Guru Prakash Paswan)
ATMANIRBHAR BHARAT imagines an India where workers stand with dignity and industries grow with strength, not at each other’s cost but side by side. It seeks a future in which prosperity does not tilt to one side, but rises for all. According to data provided by the Union Ministry of Labour & Employment, over the span of the last six years, total employment in India increased from 47.5 crore in 2017-18 to 64.33 crore in 2023-24, while the unemployment rate declined from 6 per cent to 3.2 per cent. Significantly, 1.56 crore women entered the formal workforce during this period, highlighting how labour empowerment not only strengthens individual livelihoods but also drives broader socio-economic transformation, reduces poverty, and advances inclusive growth.
It is precisely this philosophy that lies at the heart of the new labour codes. The Second National Commission on Labour, which submitted its report in June 2002, had closely studied the complexities of the Indian labour-law framework and highlighted that the country was functioning under more than 40 Central labour laws and nearly 100 state labour laws, many of which overlapped or contradicted each other. This fragmented and overlapping legal framework placed workers and industries in a cycle of confusion, where rights were difficult to enforce and compliance was burdensome. The commission, therefore, recommended that labour legislation be consolidated into four broad groups—namely wages, industrial relations, social security, and welfare and working conditions—so that rights and obligations could be understood clearly by all. Acting on these recommendations, the Union government initiated deliberations in tripartite committees comprising representatives of the government, employers, and workers. After years of consultation, refinement and consensus-building, the present government introduced the four labour codes which came into force on November 21, 2025. These reforms did not occur in a single year, they are the outcome of sustained effort of more than two decades, reflecting deep thought and the collective will of all stakeholders of the labour ecosystem.
This historic transformation of labour laws is firmly based in the constitutional mandate of social and economic justice. Labour welfare has always drawn strength from the Preamble and the Directive Principles of State Policy, particularly Articles 38, 39, 41, 42, and 43, which call for living wages, humane working conditions, and adequate social security for all. The labour codes seek to fulfil these constitutional ideals in a modern, inclusive, and technology-enabled manner.
The rationale behind codifying 29 existing labour laws into four labour codes was to make India’s labour system simpler, more efficient, and suited to today’s economy. Labour law reform is an ongoing process, and the government wanted to modernise the framework so that it works better for both workers and employers. These changes aim to make it easier to do business, create more jobs, and ensure every worker has access to safety, health, social security, and fair wages.
One of the main reasons for this reform was simplifying compliance. From the employer’s perspective, compliance has become far more predictable, transparent and less time-consuming, allowing management to focus on growing the business rather than getting entangled in paperwork. For instance, earlier, small establishments had to follow multiple laws separately, filing provident fund (PF) returns under Section 6 of the EPF Act, 1952; Employees’ State Insurance (ESI) returns under Section 44 of the ESI Act, 1948; and maintaining wage and attendance records under Section 13A of the Payment of Wages Act, 1936; Section 18 of the Minimum Wages Act, 1948; and Section 61 of the Factories Act, 1948. This often meant submitting 10 or more different returns a year. Yet workers had no simple way to verify whether their PF or ESI contributions were actually deposited. The new labour codes simplify this process through digital consolidation. Section 142 of the Code on Social Security, 2020 provides Aadhaar-based digital identity for workers to track PF and ESI online; Section 50 of the Code on Wages, 2019 allows a single return and single register; and Section 33 of the Occupational Safety and Working Conditions Code, 2020 enables one electronic licence and registration for establishments. These changes, while ensuring compliance, have not compromised on transparency and protection for workers, and thus have created an environment where both industry and labour can thrive together.
ANOTHER MAJOR REASON behind bringing the labour codes was to streamline enforcement, which earlier was scattered and confusing. Previously, different authorities handled different labour laws: one for wages, another for safety, another for social security, and this made inspections slow and unpredictable. Now, with the introduction of the four amalgamated codes, the system of authorities has become unified and digitally integrated. For example, under Section 122 of the Code on Wages, 2019, a single inspector-cum-facilitator replaces multiple labour inspectors, making inspections more transparent and less arbitrary.
Let us take the example of a boutique run by a woman entrepreneur to understand how this amalgamation of laws creates real change on the ground. Earlier, even a small garments-stitching unit with about 20-25 workers had to secure multiple licences, maintain separate registers for different labour laws, and face inspections from several departments. The owner often spent more time dealing with compliance than growing her business, and her workers did not always have clarity about their wages, safety measures, or social security benefits.
With the labour codes in place, the same boutique can now function with one online registration, one licence, and one digital annual return. Inspections are carried out through computer-based selection by an inspector-cum-facilitator, ensuring transparency instead of uncertainty or harassment-driven visits. The woman entrepreneur is now free to invest her time and resources in expanding production and hiring more workers rather than handling paperwork. Her workers also benefit, as wage payments, safety norms and social security contributions are digitally tracked, ensuring fairness, timely benefits, and a safe workplace.
From the perspective of workers, the new labour codes have also thoughtfully strengthened protections for groups that need greater support, including women, gig workers, platform workers, and those in the unorganised sector, reflecting India’s commitment to social justice, which not only safeguards workers’ rights but also aligns the country with international labour standards, bringing global recognition while strengthening the values enshrined in the Constitution. Protecting women in the workforce ensures their dignity, safety, and economic participation, which in turn strengthens families, communities, and the nation, building a stronger and more inclusive India. Under the Code on Social Security, 2020, certification for pregnancy, delivery, miscarriage, medical termination of pregnancy, tubectomy, or related illness has been simplified and made more accessible, allowing proof from a registered medical practitioner, ASHA, auxiliary nurse, or midwife, compared to the Maternity Benefit Act, 1961. Women may also work from home after maternity leave where feasible, and establishments with 50 or more workers must provide crèche facilities with allowed visits during work hours.
(The writer is national spokesperson of the BJP)
