New Labour Code for New India

Biggest Labour Reforms in Independent India to be effective from 1.4.26

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India's long-awaited labour law reforms are now approaching a decisive implementation phase.

The Union Government has indicated that the four Labour Codes are likely to become fully operational from 1 April 2026, marking a major transition in the country's labour and employment framework.

In a historic decision, the Government of India has announced the implementation of 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 with effect from 21st November 2025, rationalising 29 existing labour laws. By modernising labour regulations, enhancing workers' welfare and aligning the labour ecosystem with the evolving world of work, this landmark move lays the foundation for a future-ready workforce and stronger, resilient industries driving labour reforms for Aatmanirbhar Bharat.

The key reasons behind this reform include:

- Simplifying compliance: Multiplicity of laws leads to difficulty in compliance.

- Streamlining enforcement: Multiplicity of authorities in different labour laws led to complexity and difficulty in enforcement.

- Modernizing outdated laws: Most labour legislations were framed during the pre-Independence era, necessitating alignment with today’s economic realities and technological advancements.

Benefits of Labour Reforms Across Key Sectors:

Fixed-Term Employees (FTE):

- FTEs to receive all benefits equal to permanent workers, including leave, medical, and social security.

- Gratuity eligibility after just one year, instead of five.

- Equal wages as permanent staff, increasing income and protection.

- Promotes direct hiring and reduces excessive contractualisation.

Gig & Platform Workers:

- 'Gig work’, ‘Platform work’, and ‘Aggregators’ have been defined for the first time.