By notifying the four labour codes from 21.11.25, thereby subsuming 29 Central Labour laws, the government has described this as a historic modernisation to simplify fragmented legislation, enhance worker welfare, and support economic growth.
For many workers and their representatives, however, the story is far more fraught. While some provisions expand coverage and introduce uniform standards, trade unions, worker collectives, and grassroots movements argue that the new codes systematically dilute hard-won rights, weaken protections, and tilt the balance of power sharply towards employers. These objections are not abstract—they find specific expression in comparisons with the old legal regime and what is absent, weakened, or re-configured in the new codes.
From ID Act Safeguards to Easier ‘Hire-and-Fire’
Under the old Industrial Disputes Act, 1947, employers needed prior government approval to retrench or lay off workers in establishments with 100 or more workers. This acted as a significant procedural check against arbitrary or capricious firing, giving workers a degree of security and time to negotiate or challenge decisions.
The Industrial Relations Code (IRC) that replaced it now sets this threshold at 300 workers. This effectively allows a far greater number of firms to retrench or lay off workers without government permission, a reform that labour activists strongly oppose. Unions argue it substantially weakens job security and reflects a shift to a more flexible, market-oriented approach that puts employers’ operational ease ahead of workers’ livelihoods.
Also read – How HR Can Align People, Processes, and Technology: Gagan Arora
Unions have characterised this as a rollback of protections and part of a broader “hire-and-fire” regime that makes formal employment less stable, especially for mid-sized firms. Workers fear this will increase casualisation and short-term contracts at the cost of long-term job security.
- Dilution of Collective Bargaining and Right to Strike
Industrial Disputes Act provided a framework for disputes to be heard in industrial tribunals or labour courts. Collective bargaining, union representation, and industrial dispute resolution were built into statutory mechanisms.
The Industrial Relations Code, while consolidating many of these processes, has introduced new procedural thresholds and restrictions—for instance, longer notices for strikes and lockouts, secret ballots for union decisions and recognitions, and a focus on a single “negotiating union” representing the workforce in case of one union or negotiating council in case of multiple unions. Unions contend these requirements make it harder for workers to organise, to take collective action, and to assert their rights. They see it as a dilution of freedom of association and collective bargaining compared to the frame work provided in ID act and Trade Unions laws included many state laws on the subject..
These concerns have manifested in real mobilisations: trade unions representing millions have staged nationwide protests, terming the reforms a “deceptive fraud” that erodes workers’ freedom and union power earlier also and now again they are on move to stage protest.
- Working Hours and Daily Limits: Greater Flexibility, More Uncertainty
Under the Factories Act and states rules, the 8-hour workday and 48-hour workweek were well-established benchmarks, with overtime clearly defined. The new codes maintain similar weekly hour caps but permit broader daily fluctuations—8 to 12 hours—with flexibility left to employer policies and consent mechanisms, raising fears that extended workdays could become the norm, especially in sectors with variable workloads.
Critics point out that flexibility for employers often translates into unpredictability for workers. Unions have invoked colonial-era fears by arguing that such provisions could normalise 10- 12-hour days under the guise of flexibility while diluting everyday worker protections.
- Protection for Contract and Fixed-Term Workers — Paradoxical Gains and Gaps
One notable addition in the new framework is the formalisation and legal recognition of fixed-term employment and its parity in basic entitlements with permanent workers. Employers can hire workers on fixed-term contracts defined by duration, bringing flexibility to businesses. The law does not specifically mandates that such fixed term employment will be for time bound project basecd assignments , leaving a big space for industries to slowly remove permanent jobs and replace them with fixed term employees.
Unions see this as a double-edged sword. While fixed-term workers now formally get benefits, the very institutionalisation of such contracts can heighten precarity compared to permanent roles that earlier standards, including seniority and disciplinary protections, loosely enforced under old laws, tended to preserve. This change embeds a permanent class of non-permanent workers, raising fears of long-term erosion of stable, long-term employment.
- Social Security — Expansion in Theory, Gaps in Practice
One often-cited advantage of the new codes is expanded social security coverage—statutory recognition of gig and platform workers, unorganised sector workers, and contract labour, with provisions for EPF, ESI, gratuity, maternity benefits, and accident compensation.
But there are qualitative concerns. Under repealed laws, like the Unorganised Workers’ Social Security Act, 2008 had frameworks—albeit imperfect—to identify and deliver welfare to informal workers. Critics stress that actual entitlement under the Social Security Code depends on the government notifying specific schemes. Until such schemes are drafted and implemented, many workers—especially in rural and informal sectors—remain without enforceable rights. This has been a key objection by labour and farmer organisations, who argue that the codes’ promises outpace on-ground reality.
Farmers unions have explicitly accused government claims of universal minimum wage and social security as unsubstantiated, arguing that vast sections of workers remain outside legal coverage unless states frame detailed rules.
- Enforcement and Access to Justice: A Weakened Regime?
Under many old labour laws, labour inspectors and courts played substantive roles in enforcement. The new codes, while modernising compliance through single licences and electronic registrations, also limit direct access to civil courts for certain disputes, channelling grievances instead through prescribed appellate routes.
Analyses of these enforcement changes highlight concerns that compounding of offences, Compliance opportunities and restricted judicial forums could undermine worker remedies. For example, the OSHWC Code’s bar on civil courts hearing related cases means workers must approach higher courts—a process seen as more complex and costly, with fewer protective interim orders than lower tribunals traditionally issued under old laws.
The culmination of these changes has generated a set of core perceived losses among workers and unions. Stronger procedural safeguards against layoffs and closures under the old ID Act have been replaced with easier employer flexibility, heightening job insecurity.Collective bargaining power and freedom to strike appear more conditional and regulated, raising fears of inhibited worker voice. Stable employment cultures risk being replaced with flexible, often insecure contract and fixed-term roles. Actual enforceability of social security for the unorganised workforce remains uncertain until detailed schemes are notified, diluting earlier (if imperfect) statutory commitments.Access to justice and strong punitive deterrents for violations may have weakened through procedural shifts and compounding options.
Employers, too,are not happy?
On the other side, while analysing the financial impact of various provisions, Employers have also expressed dissatisfaction and worry about increased financial burden due to an increase in gratuity, leave encashment and other payouts. Employers’ forums have also moved to the government, expressing their fear and ambiguity in implementing the wage definition. Unknowingly non-compliance due to not providing a correct understanding and clarifications by the Government makes employers worry more severely.
The implementation of the new Labour Codes in India represents one of the most ambitious legal overhauls in decades. Its proponents argue it streamlines labour law, broadens coverage, and strengthens worker protections in a changing economy. Critics, especially labour unions, see it as a dilution of rights and an erosion of protective frameworks that once anchored labour justice.
Whether these codes will ultimately bolster worker welfare or deepen precarity will depend on whether these codes are implemented at the ground level after rules are finally notified and enforcement mechanisms function in practice.
