Four new labour codes to reform jobs market

The Union government on Friday announced the implementation of four labour codes passed by Parliament in 2019-20 meant to replace a welter of complex, British-era legislation, kicking off a set of reforms aimed at attracting investment, spurring job creation and making it easier for firms to hire and fire employees.

- Zia Haq

The new employment rules mark a continuation of recent regulatory reforms such as the rationalisation of the Goods and Services Tax, and the Income Tax Act, 2025, which have simplified the burden of compliance for consumers and businesses. They also mark the beginning of a new labour-market regime that creates a statutory backing for a national minimum wage for the first time, provide social security benefits to workers across sectors and allows women to work night shifts. The new laws also define gig workers.

"Today is a historic day for my worker brothers and sisters. Our government has implemented four labour codes. This is the biggest reform in the interest of workers since independence. It will greatly empower the workers of the country. While it will make compliance with rules much easier, it will also boost 'Ease of Doing Business'," Prime Minister Narendra Modi said on X.

The government notified the four laws and rules needed to make them operational effective November 21, Union labour minister Mansukh Mandaviya said. The announcement closes the loop on years of tense negotiations on the sensitive sociopolitical and electoral issue of labour in a country long hobbled by a web of archaic and complex employment rules.

"Through these reforms, a robust ecosystem will be created that will protect the rights of our workers in the future and give new strength to India's economic growth. This will not only create new job opportunities but also increase productivity. Along with this, our journey towards a developed India will also gain momentum," Modi added on X.