Labour Law Reform in India: From 29 Laws to Four Codes

For most of its history, Indian labour law grew one statute at a time. By 2019 there were 29 Central labour Acts, passed between 1923 and 2008, each with its own definitions, thresholds, registers and inspectors. The four Labour Codes consolidate these Acts into four statutes on wages, industrial relations, social security, and occupational safety and working conditions. This note explains why the reform was undertaken, how the Codes were enacted and brought into force, which Acts each Code replaces, and the principal changes they make.

1. Why Consolidation Was Needed

• Fragmentation. Twenty-nine Central Acts and many State laws governed overlapping subjects, so a single establishment could fall under a dozen statutes at once.
• Inconsistent definitions. Terms such as wages, employee and establishment were defined differently from Act to Act, with different wage ceilings and employee thresholds.
• Compliance burden. Separate registrations, licences, registers, returns and inspections under each Act.
• Gaps in coverage. Minimum wages applied only to scheduled employments, and the large unorganised workforce, including gig and platform workers, had little statutory protection.
• Second National Commission on Labour. Constituted in 1999 under Ravindra Varma, it reported in 2002 and recommended that Central labour laws be consolidated into a few functional groups. The four Codes broadly implement that recommendation.

2. Enactment and Commencement

Figure 1: From the Commission's report to the Central Rules

• Code on Wages, 2019. Act 29 of 2019: passed by the Lok Sabha on 30 July and the Rajya Sabha on 2 August, with Presidential assent on 8 August 2019.
• The three Codes of 2020. The Industrial Relations Code (Act 35), the Code on Social Security (Act 36) and the OSH Code (Act 37): passed on 22 and 23 September, with assent on 28 September 2020.
• Commencement. By notifications issued by the Central Government, all four Codes were made effective from 21 November 2025.
• Transition. The Government stated that, during the transition, the relevant provisions of the existing Acts and their rules, regulations, notifications, standards and schemes would continue in force until the framework under the Codes was in place.
• Central Rules. Draft Central Rules were pre-published on 30 December 2025; the final Code on Wages (Central) Rules, Industrial Relations (Central) Rules, Social Security (Central) Rules and OSH (Central) Rules were notified on 8 May 2026.
• State Rules. Labour is a Concurrent subject and States are the appropriate Government for most establishments, so each State frames its own rules under each Code (Topic 2)

3. The Four Codes and the Acts They Replace

Figure 2: 4 + 3 + 9 + 13 = 29 Central Acts

• Repeal and savings. Each Code repeals its Acts in its final section: s.69 of the Code on Wages, s.104 of the IR Code, s.164 of the Social Security Code and s.143 of the OSH Code.
• Size. The Code on Wages has 69 sections, the IR Code 104, the Social Security Code 164 and the OSH Code 143.
• Old case law. Decisions on the repealed Acts remain relevant wherever the Codes retain the same words, such as industry, industrial dispute and retrenchment (Topic 40)

4. The Principal Changes

Figure 3: Earlier position and position under the Codes

• Appointment letters. Every worker is entitled to an appointment letter, giving written proof of employment.
• Health. Employers must provide a free annual health check-up to workers above 40 years of age.
• Thresholds. The threshold for prior permission for lay-off, retrenchment and closure rises from 100 to 300 workers, and the same figure applies to standing orders (Topics 12, 16)
• Fixed term employment. Recognised across sectors, with the same wages and benefits as permanent workers doing similar work (Topic 17)
• Worker Reskilling Fund. An employer who retrenches a worker contributes 15 days' wages to a fund for the worker's reskilling (Topic 17)

5. The Debate Around the Reform

• Case for the Codes. Supporters point to simpler compliance, uniform definitions, universal minimum wages and the extension of social security to gig, platform and unorganised workers.
• Criticism. Several trade unions object to the higher thresholds for lay-off and standing orders, the notice requirement for strikes in all industrial establishments, the spread of fixed term employment, and the extent of matters left to rules.
• Exam relevance. Questions often ask candidates to evaluate the Codes; a balanced answer states both positions and refers to the constitutional goals in Topic 2.

6. Frequently Asked Questions

When did the four Labour Codes come into force?

All four Codes were made effective from 21 November 2025. The Code on Wages was enacted in 2019 and the other three in 2020, but their substantive provisions were brought into force together in November 2025. The Central Rules under each Code were notified on 8 May 2026.

How many laws do the Labour Codes replace?

They replace 29 Central labour laws: four in the Code on Wages, three in the Industrial Relations Code, nine in the Code on Social Security and thirteen in the Occupational Safety, Health and Working Conditions Code.

Did the old rules lapse on 21 November 2025?

No. The Government stated that during the transition the relevant provisions of the existing Acts and their rules, regulations, notifications and schemes would continue to remain in force. Final Central Rules followed on 8 May 2026, and the States are framing their own rules for establishments under their jurisdiction.

7. Related Topics

• Topic 2: Constitutional Framework of Labour Law. Legislative competence, rights and directive principles.
• Topic 3: Common Concepts Across the Codes. Employee, worker, establishment and the uniform definition of wages.
• Topic 39: Old Laws and New Codes. Concordance chart of the 29 repealed Acts.