By Dr. Gyan Pathak
India has implemented the four controversial Labour Codes on November 21, 2025, with a theoretical promise to the workforce of the country more benefits and greater protection. Nevertheless, it is highly uncertain to what extent the promises made will be realised on the ground, especially when it has snatched numerous rights and protection of workers on the one hand and given enough elbow room to employers to ditch the promised benefits.
The codes have made easier for companies to fire workers, and made harder for workers to legally protest. No company employing less than 300 workers now need to have prior government permission to lay off employees. It means majority of workers formally employed in organised sector in India, which give formal employment to much less than 10 per cent of the total workforce in the country, will be excluded from the protection of their jobs.
The exact number of the workers from whom the right of protection of jobs has been snatched is not available right now, since government has not given any data on this. However, we have some indirect evidence from 2017-18 data, which says that 81 per cent of factories employing less than 100 workers. Now number of employment has been increased to 300, hence protection of jobs for additional millions of workers has been withdrawn.
Additionally, fixed-term employment has been legalised in a more ways. While fixed-term workers may get some benefits, such contracts inherently undermine the long-term secured jobs, which we call job stability. Jobs are made instable in sever other ways, such as many workers having permanent employment will be forced to accept temporary or fixed-term jobs, which will erode the log-term job security.
About 90 per cent of India’s workforce in the informal sector has not job security, and now a projected over 90 per cent workers in the formal sector were rendered unprotected from firing, majority of workforce in India has lost the right to have secured jobs. Moreover, the codes have effectively made it legally difficult to protest or right to strike.
It is not without reason that the analysts and trade unions have alleged that the many of the hard earned rights of the workers since independence of India have been rolled back. Right to protest and to strike as a means of collective bargaining has been weakened. For example, under the Industrial Relations Code, to call a strike workers must now give a 60 day notice, even outside public-utility services. Strikes are prohibited during conciliation proceedings and for 7 days after they conclude.
Many legal safeguards of the earlier laws have been done away with making it easier for employers to act without accountability. There is a promised grievance-redressal mechanism in the codes, but will prove to be ineffective given the bias in the codes towards employers, reducing the ability of workers to seek justice in case of unfair dismissal, contract abuse, or unsafe working conditions. Workers will have fewer avenues to press demands or complain for violations without being victimised.
The promised social security benefits thus remains more or less theoretical rather than real, especially for informal, gig, contract, and unorganised workers which altogether, according to a new estimate by Central Trade Unions will form about 97 per cent of the total workforce in the country.
It should be noted that the promise of social security to gig and platform workers in respect to pension, health, insurance, safety etc remains by and large discretionary because the schemes must be notified first by the government. Large part of the informal and unorganised sector workers, which include migrant workers, home-based or daily-wage workers, remain outside effective protection because of gaps in registration, for example, depending on Aadhaar-based portals.
Despite promises, there are provision that may dilute working-condition and wage protection of workers. Though the code on wages talks of minimum wages, wage slips, timely payment etc, in practice – especially for small firms, contract workers, informal sector – compliance may be weak, chiefly because weak enforcement mechanism and resource constraint, apart from legal loopholes in favour of the employees.
The New Labour Codes will effectively create “flexible labour market” which will encourage employers to rely more on contract and fixed-term labour, which will lower the working standards and weaken safety and benefit provisions.
The most adversely affected workers will be those who are or will be working in the MSMEs employing less than 300 workers, because they will be able to more easily hire or fire them without regulatory oversight. Fixed-term, contract, gig, and informal workers, whose job security and benefits are already thin, are likely to face more precariousness. Workers in the unorganised sector, agricultural, and migrant workers will be running the risk of being excluded from the promised protection.
Nevertheless, there are many rights of workers which are not yet lost, at least as claimed in the codes. Mandatory appointment letters giving formal documentation of employment terms is one of them. It is only a theoretical promise, and it is uncertain how far it could be implemented, or how far workers will be able to press the employers for having their appointment letters. Minimum wages, timely payment, and gender based pay parity across sector is also a promised benefit. Social security code has offered hope of pension, insurance and other social security measures to gig and platform workers.
The Joint Platform of 10 Central Trade Unions and some opposition ruled states have claimed that the combined effect of easier firing, weakened collective bargaining, increased precariousness, and uncertain social security implementation will undermine the labour protection. They have demanded withdrawal of the Codes. The Codes have simplified regulation at the cost of rights and protection of workers under the earlier laws. (IPA Service)
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