Centre-state collaboration: A must for effective labour reforms

India’s labour law reform is among the most consequential structural changes in decades. By consolidating 29 central legislations into four comprehensive Labour Codes—the Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health and Working Conditions Code—the government has laid the groundwork for a modern, inclusive, and competitive industry ecosystem.

- RAJIV MEMANI

‘The promise is clear: simpler compliance, better worker protection, and greater flexibility for employers. Yet, as with any major reform, the true impact will depend on how quickly ambiguities are resolved and how effectively the Centre and states work in lockstep to ensure uniform implementation.

In line with key reform recommendations from the Confederation of Indian Industry, the new codes aim to tackle longstanding and material issues faced by industry. First, they tackle fragmentation and inconsistency by replacing overlapping statutes with a unified architecture, supported by single registration and consolidated returns—changes that cut administrative friction and inspection delays.

Second, they aim to raise and stabilise incomes at the bottom through a national floor wage that guides states in setting minimum wages, reducing disparities and offering a more predictable earnings baseline for workers. Third, they enable formalisation and transparency by mandating appointment letters, strengthening the definitional logic around wages and benefits, and making pay timelines explicit—measures that reduce disputes and enhance trust. Fourth, the Codes elevate workplace safety and inclusion through periodic health checks at age thresholds, safety committees in larger establishments, and consent-based night work provisions for women, coupled with required safeguards (secure transport and safe conditions).