Unions with 51% votes gain sole bargaining rights, and a new reskilling fund supports retrenched workers in India
NEW DELHI
India’s new labour codes are being seen as a major step toward improving worker protection while also reducing the compliance burden for employers. A new report by Brickwork Ratings said these reforms will help build a modern, inclusive, and competitive labour system that supports both worker welfare and business growth.
According to the report, the new laws simplify many administrative procedures through digital filings and single registrations. This helps companies reduce paperwork and easily adjust their workforce when needed. Higher thresholds for retrenchment approvals are expected to make India more investment-friendly.
The codes introduce many worker-centric measures. These include universal minimum wages, equal pay for men and women, and overtime wages at twice the normal rate. Fixed-term employment is now formally recognised, and such employees become eligible for gratuity after one year. The reforms also introduce work-from-home provisions, a 60-day strike notice rule, and a raised retrenchment approval limit—from 100 to 300 workers—under the Industrial Relations Code.
Trade unions receiving 51 per cent of votes will now have exclusive negotiating rights. The government has also created a re-skilling fund to support workers who lose jobs due to retrenchment.
One of the most important changes comes under the Code on Social Security, 2020. It expands EPFO, ESI, and gratuity benefits to gig and platform workers, giving them long-awaited formal recognition. National social security coverage is expected to rise to over 64 per cent of the workforce in 2025, compared to just 19 per cent a decade ago.
The four unified labour codes—covering wages, social security, industrial relations, and occupational safety—replace 29 older labour laws and officially came into effect on November 21.
