Labour Codes: Structural Rewriting of Workers’ Rights

India’s new Labour Codes, spanning wages, industrial relations, social security and workplace safety, represent the most ambitious restructuring of labour law since Independence. Although framed as measures of simplification, these amount to a profound rewriting of the legal relationship between workers, employers and the State.

What emerges from this shift is not merely a reorganisation of statutes but a remaking of the very architecture through which constitutional guarantees of dignity, equality and humane working conditions materialise in everyday economic life. In a country where nearly 500 million people depend on wage labour, the direction in which labour laws evolve matters immensely, and the Codes raise serious concerns about whether India is moving toward or away from the constitutional ideals of social and economic justice.

Working Hours and Employment Security

Under the Occupational Safety, Health and Working Conditions Code, Sections 25-29 permit workdays extending up to 12 hours within a 48-hour week. In practice, this represents a departure from the roughly 40-hour norm that has taken root across much of India’s organised sector. Internationally, the movement, whether in Europe, East Asia or through ILO (International Labour Organisation) conventions, has been toward shorter, not longer, workdays. A 12-hour shift, supported by ILO research and global workplace injury data, is associated with fatigue, reduced productivity and adverse health outcomes.

Women are particularly vulnerable, given the disproportionate unpaid care responsibilities they shoulder. The PLFS 2022–23 (Periodic Labour Force Survey) reveals that Indian women spend nearly six times more time on unpaid work than men. Extended workdays also erode the time available for education, skill development and civic participation. This raises a constitutional question: when Article 42 directs the State to secure humane conditions of work, and Article 21 has been interpreted (in cases such as Bandhua Mukti Morcha and Olga Tellis) to protect dignity and livelihood, can laws that lengthen the workday be justified without adequate safeguards?

Similar concerns arise in employment security. The Industrial Relations Code raises the retrenchment and closure threshold from 100 to 300 workers under Section 77. This numerical shift significantly alters India’s landscape of job security because three-quarters of manufacturing workers are employed in establishments below this threshold. As a result, a far larger share of workers can now be lawfully dismissed without government oversight.

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While the stated objective is to promote labour flexibility, the absence of compensatory mechanisms, such as mandatory severance funds, unemployment insurance or structured notice periods, means that the burden of flexibility falls disproportionately on workers, undermining the Supreme Court’s long-standing view of the right to livelihood as integral to the right to life.

Collective Bargaining, Enforcement and Federal Balance

The Labour Codes introduce new procedural requirements for strikes, including a 60-day notice period under Section 62 of the Industrial Relations Code, alongside tighter rules during conciliation. These measures may appear administrative, yet cumulatively they risk making the constitutional right to association under Article 19(1)(c) far more difficult to exercise in practice. Courts have recognised collective bargaining as central to this right (B.R. Singh v. Union of India), and when procedures become so layered that workers cannot meaningfully organise, legal protections become nominal rather than substantive.

Enforcement undergoes a conceptual shift through the transformation of inspectors into “inspector-cum-facilitators”. At first glance, this modernises compliance, but in a labour market where 93% of workers remain informal, and where construction, small manufacturing and domestic work are prone to routine violations, diluting inspection powers risks converting statutory rights into unenforceable entitlements. Without robust inspections, real penalties and grievance mechanisms that workers can access without fear, rights remain rights only on paper.

The Codes also centralise authority in a subject constitutionally located in the Concurrent List. The National Floor Wage (Section 9 of the Code on Wages) and expanded Central rule-making powers shift authority away from the federal arrangements that historically allowed states to tailor protections to their diverse economic landscapes. Cooperative federalism, repeatedly emphasised by the Supreme Court (S.R. Bommai, State of Karnataka v. Union of India), hinges on balancing uniformity with autonomy. When centralisation accelerates without equivalent consultation, the constitutional design becomes difficult to sustain.

Social Security and Substantive Equality

The Social Security Code includes gig and platform workers for the first time, an important step in principle given India’s rapidly expanding platform economy. Yet many provisions depend on future schemes that remain unnotified, and employer or aggregator contributions are unspecified. This creates uncertainty for workers like delivery riders, drivers, care workers, who need protection the most. A social security system without enforceable financing mechanisms becomes aspirational rather than assured.

Equally notable is the silence of the Codes on structural disadvantages. India’s labour market is characterised by sharp caste-based wage gaps, persistent gender segregation, religious discrimination in hiring and extremely low female workforce participation. While the Codes reiterate non-discrimination, they do not introduce mechanisms for proactive enforcement, gender-sensitive workplaces, caste-aware monitoring or explicit protections for transgender workers. Neutral language does not dismantle entrenched inequality; it simply reproduces it.

A Democratic and Constitutional Imperative

Taken together, the new Labour Codes shift the centre of gravity of Indian labour regulation in a direction that unmistakably benefits large corporate capital while leaving both workers and India’s vast micro, small and medium enterprises (MSME) exposed.

Although the Codes are frequently celebrated as pro-industry reforms, the reality is considerably more uneven. India’s industrial landscape is structurally built on MSMEs: according to the MSME Annual Report 2023–24, over 99% of all enterprises belong to this category, and they employ more than 110 million people, which is far more than the formal corporate sector employment. These units operate on thin margins, depend on predictable regulation and face chronic constraints relating to credit access, fluctuating demand and rising costs. For them, deregulation without infrastructure, safety nets or state support creates vulnerability, not flexibility.

The Codes further widen this imbalance by raising retrenchment thresholds, weakening inspections and shifting compliance toward self-certification, measures that overwhelmingly favour large firms with in-house legal teams, compliance staff and large financial reserves.

Smaller enterprises rely on clear regulatory guidance and State oversight to ensure fair competition, especially when competing with corporations that can absorb compliance shocks with ease.

The latest available structural data reinforces this asymmetry: the Sixth Economic Census (2013-14), still the most comprehensive dataset on enterprise size, shows that establishments with large workforces form only a tiny fraction of India’s non-agricultural units. More recent surveys such as the Annual Survey of Industries confirm that even within organised manufacturing, factories with 50 or fewer workers constitute nearly two-thirds of all units but account for just over one-tenth of employment and an even smaller share of value added, with capital, output and bargaining power concentrated overwhelmingly at the top.

In this context, reforms that ease restructuring for large firms but offer no protective mechanisms for smaller ones deepen an already tilted industrial landscape.

For workers within MSMEs, who form the overwhelming majority of India’s labour force the consequences are even starker. Most such units lack formal HR (human resource) systems, internal safety structures or grievance mechanisms. For them, inspections are not harassment; these are the only external safeguards ensuring minimum standards of wages, safety and dignity. Weakening State oversight, therefore, harms workers directly while leaving smaller employers exposed to legal uncertainty, compliance risks and unfair competitive pressures from larger firms.

This dual vulnerability, workers without enforceable protections and smaller employers without institutional support, reveals the central contradiction of the Labour Codes. Rather than creating a balanced framework of rights and responsibilities, these consolidate bargaining power upward, privileging a narrow segment of large industrial capital while millions of smaller producers and workers are left to cope with precarity on their own. When labour laws amplify the advantages of those already possessing disproportionate economic power, the question at stake is not administrative efficiency but economic justice.

Because their implications extend far beyond procedural reform, the Codes demand democratic re-examination rooted in constitutional values. India’s labour laws must evolve, but evolution cannot mean shifting power away from workers and smaller producers towards those already positioned at the top of the economic hierarchy. It cannot mean weakening the fragile rights of workers who sustain India’s economy. Nor can it mean constructing a framework in which MSMEs face greater uncertainty while large corporate capital operates with unprecedented freedom.

In order to evolve into a society that is committed to social and economic democracy, labour law must operate as an instrument of justice, fortifying protections, supporting smaller enterprises and ensuring that economic growth aligns with the constitutional promise of dignity, fairness and equality. Where the Labour Codes depart from these principles, reconsideration is not only desirable but essential. The stakes, both human and institutional, are too significant for anything less than transparency, public debate and constitutional vigilance.

The writer is Associate Professor at Zakir Husain Delhi College, University of Delhi. The views are personal.