India’s ambitious overhaul of its labour laws through the four New Labour Codes – Code on Wages 2019, Industrial Relations Code 2020, Code on Social Security 2020, and Occupational Safety Health and Working Conditions Code 2020 – came into effect on November 21, 2025, consolidating 29 outdated colonial-era laws into a streamlined framework hailed by the government as a boost for ease of doing business and worker welfare. However, beneath the glossy reforms lies a web of critical deficiencies that have ignited fierce backlash from trade unions, activists, and legal experts. Far from empowering the 90% unorganized workforce, these codes are accused of diluting protections, favouring corporations, and violating international standards like ILO Convention 144 on tripartite consultations. Drawing from in-depth analysis of government notifications, union statements, and scholarly critiques, this article uncovers 12 research-backed flaws that could erode hard-won labour rights and fuel economic inequality. As nationwide protests erupt – with ten major unions labelling the rollout a “deceptive fraud” – it’s time to question: Is this progress or a corporate giveaway?
Flaw 1: Erosion of Collective Bargaining Power The Industrial Relations Code raises the threshold for union recognition to 51% membership in a workplace, up from simpler majority rules, making it nearly impossible for smaller unions to negotiate. Trade unions argue this creates a “trade union-free atmosphere,” stifling dissent and collective action, as highlighted in a 2023 Taylor & Francis study on labour code impacts. Critics like Congress leader K Muraleedharan call it “anti-national,” claiming it undermines the fundamental right to form unions without needing 10% pre-approval.
Flaw 2: Criminalization of Strikes and Protests Workers must now give 14 days’ notice for strikes in essential services, with provisions to deem them illegal if unresolved, effectively criminalizing spontaneous protests. This echoes colonial-era suppression, drawing flak from the All India Trade Union Congress (AITUC) for snatching “rights to fixed-term jobs and collective action.” A 2024 PMC analysis warns this imbalances power, tilting scales toward employers amid rising gig economy disputes.
Flaw 3: Expanded Working Hours Without Safeguards The OSH Code permits up to 12-hour shifts (8 hours work + 4 hours overtime), with women allowed night shifts only on consent – but without mandatory creche or transport guarantees. Unions decry this as exploitative, especially for the 80-90% informal sector, where fatigue-related accidents could surge, per a Frontline report on pre-implementation dilutions.
Flaw 4: Weakened Retrenchment Protections Layoff approvals now required only for firms with over 300 workers (from 100), easing mass firings for larger industries. Small firms face no such thresholds, exacerbating job insecurity in a post-pandemic economy, as noted in Reuters’ coverage of union opposition.
Flaw 5: Inadequate Social Security for Gig and Unorganized Workers While the Social Security Code extends benefits to 23.5 million gig workers by 2030, implementation lacks funding mechanisms or enforcement teeth. NITI Aayog estimates highlight voluntary coverage gaps, leaving migrants and platform workers vulnerable to exploitation without portable benefits. A 2021 gender lens study by the Institute of Social Studies Trust reveals women in informal roles are hit hardest, with diluted maternity protections.
Flaw 6: Delayed and Uneven State Implementation As a concurrent subject, states must frame rules, but only 13 have complied fully by November 2025, per Ministry data. This patchwork creates compliance chaos, delaying universal minimum wages and risking legal limbo for interstate migrants, as flagged in India Briefing’s enactment status report.
Flaw 7: Rising Compliance Costs for MSMEs Micro and small enterprises face skyrocketing expenses for payroll upgrades, training, and gratuity recalculations (now after one year for fixed-term staff). The Association of Indian Entrepreneurs warns of disrupted continuity, potentially stifling 50% GDP from informal sectors.
Flaw 8: Dilution of Inspectorate and Adjudication Fewer labour inspectors and consolidated tribunals (one per 2-3 districts) weaken enforcement, per Times of India analysis. This hampers grievance redressal, especially for contract labour, violating equal pay mandates.
Flaw 9: Gender Insensitivity in Reforms Night shifts for women lack robust safety nets, and the codes overlook intersectional vulnerabilities like caste-based discrimination in unorganized work. A 2021 SSRN paper critiques this as failing gender equity goals.
Flaw 10: Narrow Wage Definitions Impacting Take-Home Pay Unified ‘wages’ exclude HRA and allowances, potentially slashing net salaries while hiking PF/gratuity contributions. EY India’s Puneet Gupta notes this could offset employer costs at workers’ expense.
Flaw 11: Lack of Tripartite Consultation Passed amid COVID without ILO-mandated worker-employer-government talks, the codes breach global norms. Unions cite this as a “unilateral corporate tilt,” fueling 2021-2025 strikes.
Flaw 12: Potential for Executive Overreach Government can amend conditions via orders, bypassing Parliament – a red flag for democratic accountability, as per CPI(M) critiques.
In conclusion, while the New Labour Codes promise modernization, their flaws – from eroded bargaining rights to uneven enforcement – risk widening inequality in India’s $4 trillion economy.
