THE UNION GOVERNMENT is reportedly set to implement the four Labour Codes — the Code on Wages, 2019 (‘CoW’), the Industrial Relations Code, 2020 (‘IRC’), the Occupational Safety and Health and Working Conditions Code (‘OSH’), and the Code on Social Security, 2020 (‘CSS’) — on April 1, 2026. It should not.
These Codes are the product of a decade-long consolidation of 29 labour laws, culminating in legislation passed between 2019 and 2020. That timeline alone should give pause. Laws of this consequence, affecting hundreds of millions of workers, deserve more than a decade of legislative inattention followed by a rushed implementation deadline.
The case against proceeding rests on twelve distinct grounds.
Incomplete and inconsistent rule-making
The Codes legislate less clauses and leave numerous procedural and substantive clauses to the rule-making process. As appropriate governments, the Union and the state governments need to make rules. There already exist substantial differences between the Union and the states’ rules and among the states. These will lead to chaotic labour code implementation. The IRC, for example, leaves the scope of collective bargaining entirely to the rules. The absence of synchronisation of rules will mean potential for conflicts and litigation before the dust implementation has even settled. Where one state may permit a broader scope of collective bargaining and another a narrower one, the same company operating across two states will find itself bound by collective agreements of entirely different reach. This is a recipe for inequity, worker resentment, and deteriorating industrial relations outcomes.
Clumsy legal construction
Law-making has never been so clumsy as the present Codes have shown. For example, the IRC’s removal of Labour Courts while retaining Industrials Tribunal is a logic difficult to fathom, as the new clauses for compulsory adjudication are poorly drafted. The tribunals now comprise a judicial and an administrative members with the latter’s qualification being, at minimum, a Joint Secretary. In cases of disagreement between the two, a judicial member from another Tribunal is added, and the award follows the majority.
Whether a senior bureaucrat, however accomplished, possesses the labour jurisprudence or the time to adjudicate industrial disputes is a question the lawmakers did not ask. The administrative framework of labour regulation in a country as vast as India remains inadequate, and it is fair to say that many judicial bodies constituted under the Industrial Disputes Act, 1947 (‘ID Act’) have not been functioning at optimal levels.
A failure of social dialogue
India has ratified the ILO Convention No. 44, the Tripartite Consultation (International Labour Standards) Convention, 1976 which requires the ratified member countries to ‘meaningfully and effectively’ consult employers’ and workers’ representatives on matters of industrial relations. It has been the undivided and highly vocal opinion of all the central trade unions (‘CTUs’) including the Rashtriya Swayamsevak Sangh-affiliated Bhartiya Mazdoor Sangh (‘BMS’) that the Union government did not effectively consult with the trade unions; if at all, it did, it was symbolic – contrary to the claims of the Labour Ministry. Sincere and effective social dialogue results in productive outcomes and the outcomes bear the stamp of participation and consensus. It is democratic. Even if the Codes were passed, there is still considerable scope for social dialogue to improve on the legislated Codes.
Passed without parliamentary debate
All four Labour Codes were passed without any discussion in both the houses of the Parliament. The opposition parties had boycotted the proceedings over the Farm Laws. The Codes were passed without a single amendment even from the treasury benches. In a pluralistic democracy, legislation of this breadth warrants robust parliamentary scrutiny. It takes courage and conviction in the democratic processes for any government to do so. If the government is confident in the soundness of these Codes, it should welcome that scrutiny.
Parliamentary Standing Committee recommendations ignored
The Parliamentary Standing Committees on the Codes held consultations with the stakeholders, including academics and industry representatives, and produced technically sound recommendations. The government implemented few of them. The Committees’ work was, in effect, reduced to an exercise in optics.
Complexity dressed as consolidation
The technical construction of the Codes is highly questionable. The Codes are inelegant, poorly composed and a good many clauses in them are cut, copy and pasted from older laws.
Codification of laws does not mean assembling diverse labour laws under a single Code. The Code becomes complex. The straightforward legal clauses are now clubbed, which makes them unfriendly for illiterate or poorly educated workers. For example, the OSH Code contains ‘sectoral labour laws’. It contains laws on factories, mines, plantations, building and other construction workers (‘BOCWs’), beedi and cigar workers, inter-state migrant workers (‘ISMWs’), etc. Each of these laws has its own uniqueness, reflecting the complexities of the sector it deals with.
Many have a longer history, while a couple of them were enacted in the 1990s. Elaborate provisions have been made after considerable thought process. Now the OSH Code brings these diverse and self-contained sectoral laws into one complex, shortened and unhelpfully consolidated Code. In the process, legal sharpness, the unique relevance of clauses, and easy understanding are lost. For example, contract labour and inter-state migrant workers have been coupled as both involve a contractor. However, the scope of ISMW Act is far more comprehensive and involves issues different from contract labour. The present laws on ISMWs and BOCWs are comprehensive and easily understandable to workers.
Definitional uniformity as a trap
In the name of uniformity, definitions of critical variables such as workers, wages, and the likes, have been bluntly standardised across all four Codes. The definition of ‘workers’ for the ID Act differs from that for other Codes; similarly, the definition of wages will be different, i.e. more comprehensive, for payment of wages than for say minimum wages. The components of wages have been narrowed to basic wage, dearness allowance, and a largely obsolete retaining allowance. As a consequence, workers’ contributions to social security funds will be lower than before, which is a direct and concrete harm. Again, apart from ‘workers’, the ‘employees’ category has been included. Lawyers and union leaders affirm that this could lead to legal wrangles in future.
Executive decree over democratic debate
A recurring structural defect in the Codes is the displacement of legislative content into executive notifications. Changes in the legislated clauses require parliamentary debates, which is the right democratic process to go about. In case of notifications of the rules, the ruling government can simply replace an order with another with the least difficulty. Put simply, the Codes take away law-making from the realms of democracy to unilateral notifications by the executive arm of the State.
Negligible gains for social security
The Codes do little to improve social security for the organised workers, as the original thresholds for Employees’ Provident Fund (‘EPF’), and Employees’ State Insurance (‘ESI’), fixed during the early years of planning, remain the same. The social security clauses concerning the unorganised workers are a slight improvement of the Unorganised Workers’ Social Security Act, 2008. However, still, the clauses concerning social security are incomplete and the Code does not promise any benefits in the law. They are left to the rule-making processes. CSS, thus, is an empty law which disappoints millions of unorganised workers.
The inclusion of gig and platform workers is welcome, but they have been statutorily placed outside the employment relationship without the benefit of judicial deliberation or wider public debate. That is a decision with significant long-term consequences, taken with insufficient care.
Universal coverage remains a mirage
Seventy-five years on, the Codes still do not widen coverage of factories, contract labour, social security, or safety mechanisms. Universal minimum wages ring hollow when wage determination is left to rule-making and enforcement remains weak. Thresholds are either unchanged or raised arbitrarily. Most critically, workers in enterprises below the 10 or 20 workers threshold, the bulk of India's working poor, remain entirely outside the law's protection.
Labour inspection has been gutted
Labour laws in India have long been criticised for weak enforcement — “paper tigers,” in the familiar phrase. Despite India's ratification of ILO Convention No. 81 on Labour Inspection, the inspection regime has been radically diluted and contrary to the clauses of the Convention. There has been a crusade to paint labour inspection pejoratively as ‘Inspector-Raj’ to dilute the excellent clauses on labour inspection in the current labour regime. This is not a transitional deficiency. Unless the legislative mindset changes, it will remain embedded in the statute books indefinitely.
The balance of power tilts against labour
Retired Supreme Court and High Court judges have strongly criticised the Codes for failing to deliver social justice and for falling short of constitutional guarantees, including the promise of a living wage. Of the genuinely new provisions, most favour employers. The compulsory recognition of trade unions is a welcome and long-overdue reform. But it does not redeem a framework that, taken as a whole, shifts the legal balance of power away from labour and toward capital.
What must be done
The Parliament is answerable to the citizenry and bound by the Constitution. It is strongly advised that the Parliament opens up the Codes for sensible and sensitive amendments to cure many of the defects they presently possess. The trade unions, legal experts, retired judges, academics, and parliamentary committees must be given a genuine role. Labour inspection must be strengthened. Definitions must be corrected. Social security thresholds must be updated.
The Codes’ erosion of inspection powers, transfer of law-making to executive notifications, and failure to guarantee a living wage raise serious constitutional questions under Articles 14, 19, 21, and the Directive Principles of State Policy. Trade unions and civil society have strong grounds to challenge them in the High Courts and the Supreme Court, which has taken suo motu cognizance of legislative overreach before. The constitutional infirmities here may well warrant it doing so again. The Codes in the present form will lead to a legal and operational disaster triggering widespread confusion, complexities, legal actions, etc.
Before implementation, the Central Government must also place before Parliament a comprehensive White Paper detailing enforcement capacity, adjudication machinery, inspectorate staffing, and state-wise rule-making progress. This single act of transparency would do more than any press release to build stakeholder confidence. Without it, the Codes risk remaining what critics already fear: paper promises fit only for political exploitation.
Labour law must do two things simultaneously: create enabling conditions for business, and uphold the rights of workers as guaranteed by the Constitution and India's international obligations. These Codes, as they stand, do neither adequately.
April 1 is not the right date. The right date is whenever this work is actually done.
