Overview of Labour Laws in India: Ensuring Workers’ Rights and Safety

Work in India is as diverse as the country itself – from assembly line workers in Pune factories to construction labourers in Gurugram, from gig delivery partners in Kolkata to tea garden workers in Assam. Behind each of these jobs sits a web of legislation designed to protect wages, ensure safety, and secure dignity at work. The labour law framework has evolved over nearly a century, and in November 2025, it underwent its most significant transformation yet. Here’s a clear walkthrough of what these laws cover, how they’ve changed, and why they matter for every working person.

The foundation of labour legislation 🔗

Labour laws broadly regulate the relationship between employers, workers, and the state. They cover service conditions, wages, social security, occupational safety, industrial relations, and welfare of vulnerable groups like women, children, and workers in the unorganised sector. The constitutional backing for these laws comes from several provisions – Article 14 guaranteeing equality before law, Article 23 prohibiting forced labour and trafficking, Article 24 banning child labour under 14 in factories, mines, and hazardous employment, and Article 39(d) mandating equal pay for equal work.

Until recently, the statutory landscape consisted of nearly 29 central labour laws, many dating back to the pre-Independence era. This fragmented framework has now been consolidated into four comprehensive codes, marking a historic shift in how work is regulated.

Key traditional labour legislations 🔗

To understand the current reforms, it helps to know the foundational laws that have shaped workplace regulation for decades. Many of their core principles survive in the new codes.

The Trade Unions Act, 1926 🔗

This is the oldest piece of modern labour legislation in the country. It was enacted following the historic Buckingham Mill case and a 1921 resolution moved by N.M. Joshi in the Central Legislative Assembly. The Indian Trade Unions Bill was passed in 1925, received assent on 25th March 1926, and came into force on 1st June 1927. The Act provides legal recognition to trade unions, permitting them to register, represent workers in collective bargaining, and enjoy immunity from civil and criminal liability in matters connected with bona fide trade disputes.

The Industrial Disputes Act, 1947 🔗

This law governed how employers and workers resolved conflicts – strikes, lockouts, layoffs, retrenchment, and closures. It regulated how employers could address industrial disputes, and Section 3 created the right of participation in joint work councils to secure amity between employers and workmen. The Act required prior government permission for large establishments before laying off workers and provided for labour courts and industrial tribunals to adjudicate disputes.

The Payment of Wages Act, 1936 and Minimum Wages Act, 1948 🔗

These complementary statutes regulated when, how, and how much workers must be paid. The Payment of Wages Act ensured timely disbursal without unauthorised deductions, while the Minimum Wages Act empowered governments to fix floor wages for scheduled employments. The Equal Remuneration Act, 1976 added the principle of equal pay for equal work regardless of gender.

The Employees’ State Insurance Act, 1948 and EPF Act, 1952 🔗

Together, these built the backbone of social security. The Employees’ Provident Fund Organisation and Employees’ State Insurance provided workers with retirement benefits and medical and unemployment benefits respectively, with ESI-covered workers also entitled to 90 days of paid medical leave.

The four new Labour Codes 🔗

In one of the most significant labour reforms in decades, Parliament consolidated 29 existing central laws into four codes. The Government of India announced that the four Labour Codes – the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 – were made effective from 21st November 2025. This move rationalised nearly a century of fragmented legislation into a coherent framework.

The Code on Wages, 2019 🔗

This Code subsumes four earlier laws – the Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and Equal Remuneration Act, 1976. It introduces a national floor wage applicable across states and extends minimum wage protection to all workers, not just those in scheduled employments. The Code introduces a National Floor Wage to ensure no worker receives a wage below the minimum living standard, along with gender-neutral pay and job opportunities that explicitly prohibit discrimination including against transgender persons.

The Industrial Relations Code, 2020 🔗

This consolidates the Trade Unions Act, the Industrial Employment (Standing Orders) Act, and the Industrial Disputes Act. The Code raises the threshold for standing orders from establishments with 100 workers to those with 300, granting smaller firms more flexibility in hiring and firing; for establishments with more than 300 workers, government permission is required before layoffs, retrenchments, or closures. It also tightens rules on strikes, mandating a 60-day notice period and prohibiting strikes while tribunal proceedings are pending.

The Code on Social Security, 2020 🔗

Perhaps the most transformative of the four, this Code widens the social security net far beyond traditional factory and formal-sector workers. The Code broadens the definition of “employee” to include gig workers, platform workers, and those in unorganized sectors, replacing existing laws like the Employees’ Provident Funds Act (1952) and the Employees’ State Insurance Act (1948), and mandates the use of Aadhaar cards to ensure workers receive their entitled benefits. For India’s booming gig economy – from food delivery to ride-sharing – this was a long-awaited formalisation.

The Occupational Safety, Health and Working Conditions Code, 2020 🔗

This Code consolidates 13 laws including the Factories Act, 1948 and the Contract Labour Act, 1970. It sets standard working hours, mandates safety training, and now covers plantation workers and inter-state migrant labourers more comprehensively. Working hours are capped at 8 to 12 hours per day and 48 hours per week, with overtime work beyond prescribed hours requiring consent and payment of at least double the normal wage rate.

Protecting the unorganised sector 🔗

More than 90 per cent of the workforce is employed in the unorganised sector – street vendors, construction labourers, domestic helpers, home-based artisans, and agricultural workers. This segment has historically been most vulnerable to exploitation, and several laws were specifically designed to protect them.

The Building and Other Construction Workers Act, 1996 🔗

Construction is among the most hazardous sectors, employing millions of migrant and seasonal workers. Parliament passed this Act in 1996 recognising that construction labour was hazardous, irregular, and mostly migrant, requiring state governments to set up welfare boards funded by a cess on construction activity to provide medical assistance, accidental insurance, education support, maternity benefits, pensions, and housing assistance. Under the new Code on Social Security, the cess mechanism continues with simplifications, allowing employers to self-assess and pay cess liabilities, while inter-state migrant construction workers gain portability of cess-funded benefits across states.

The Unorganised Workers’ Social Security Act, 2008 🔗

This law provided a legal framework for extending benefits to street vendors, rag pickers, rickshaw pullers, and home-based workers. It has now been absorbed into the Code on Social Security, with the e-Shram portal serving as the central registry for informal workers.

The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 🔗

Child labour remains one of the most serious concerns in any discussion of workers’ rights. Under this Act as amended in 2016, a “Child” is defined as any person below the age of 14, and the Act prohibits employment of a child in any occupation including as a domestic help; children aged 14 to 18 are defined as “Adolescents” and may be employed except in mining, work with flammable substances and explosives, and other hazardous processes.

A narrow exception permits children to help in their family’s non-hazardous enterprise after school hours or during vacations. The amendment also allows children below 14 to work as artists in the audio-visual entertainment industry including advertisements, films, and television serials, except circuses, subject to conditions and safety measures. Enforcement, however, remains uneven, particularly in the unorganised agricultural and assembly sectors.

Emerging trends and welfare initiatives 🔗

Beyond the headline reforms, several recent trends deserve attention.

Recognising gig and platform workers 🔗

For the first time in statutory history, delivery executives, cab drivers, and online freelancers have formal recognition. All workers including gig and platform workers will get social security coverage, mandatory appointment letters to ensure transparency and job security, and Employee State Insurance Corporation coverage and benefits will be extended PAN-India. This addresses a glaring gap in the old framework, which simply did not contemplate app-based employment.

Welfare funds and portability 🔗

Welfare funds financed through cess collections have long existed for cine workers, beedi workers, and construction labourers. The new framework strengthens these funds while introducing portability – a critical feature for migrant workers who move between states.

Gender equality at work 🔗

The Codes explicitly mandate equal remuneration and non-discrimination. Women will get equal opportunities to earn higher income as they are permitted to work at night and in all types of work across all establishments, subject to their consent and required safety measures. This represents a meaningful shift from earlier restrictions that, while protective in intent, often limited women’s career opportunities.

Simplified compliance 🔗

For employers, the reforms introduce single registration, single licence, and single return systems across safety and working-condition requirements. An Inspector-cum-Facilitator system shifts enforcement from purely punitive action toward guidance and compliance support.

Challenges in implementation 🔗

While the legal architecture is now modernised, actual implementation depends heavily on state-level rules. Many provisions depend on yet-to-be-issued state rules, leaving employers to navigate a transitional period with uncertainty, and the existing labour laws will continue to apply during this transitional period even though the new codes have effectively repealed the old laws. This transitional complexity means that for the next few years, HR professionals, trade unions, and workers will be operating under a hybrid regime.

Another concern raised by trade unions is the higher threshold for standing orders and retrenchment approvals. Critics argue that increasing the limit from 100 to 300 workers leaves millions in mid-sized establishments with weaker job security, while supporters say it encourages firms to expand without fearing regulatory bottlenecks.

What do you think? Do the new Labour Codes strike the right balance between protecting workers and enabling ease of doing business, or does raising thresholds for retrenchment permission weaken job security for too many? And how effectively can social security benefits be delivered to India’s vast unorganised workforce when so many remain outside formal registration systems?

References

1. https://en.wikipedia.org/wiki/Indian_labour_law
2. https://labour.delhi.gov.in/it/trade-unions-act-1926
3. https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2192463&reg=3&lang=2
4. https://www.india-briefing.com/doing-business-guide/india/human-resources-and-payroll/india-new-labor-codes
5. https://www.theindiaforum.in/forum/law-only-paper-welfare-construction-workers
6. https://labourlawreporter.com/bocw.asp
7. https://en.wikipedia.org/wiki/Child_labour_in_India
8. https://www.indiafilings.com/learn/child-labour-law-regulations-in-india
9. https://kpmg.com/xx/en/our-insights/gms-flash-alert/flash-alert-2025-267.html
10. https://www.fisherphillips.com/en/news-insights/indias-new-labor-codes.html