Workers' Rights

The unions demand the laws be withdrawn before nationwide protests they plan to hold on Wednesday.

Ten large Indian trade unions have condemned the government’s rollout on Friday of new labour codes, the biggest such overhaul in decades, as a “deceptive fraud” against workers.

The unions, aligned with parties opposing Prime Minister Narendra Modi, demanded in a statement late on Friday that the laws be withdrawn before nationwide protests they plan to hold on Wednesday.

One of the trade unions, Centre of Indian Trade Unions, organised protest marches on Saturday in the eastern city Bhubaneswar, where hundreds of workers gathered and burned copies of the new labour codes.

Modi’s government implemented the four labour codes, approved by parliament five years ago, as it seeks to simplify work rules, some dating to British colonial rule, and liberalise conditions for investment.

It says the changes improve worker protections. While the new rules offer social security and minimum-wage benefits, they also allow companies to hire and fire workers more easily.

Unions have strongly opposed the changes, organising multiple nationwide protests over the past five years.

The Labour Ministry did not immediately respond on Saturday to a Reuters news agency request for comment on the union demands. The government has held over a dozen consultations with unions since June 2024, an internal ministry document on the labour codes shows.

The rules allow longer factory shifts and night work for women, while raising the threshold for firms that need prior approval for layoffs to 300 workers from 100, giving companies greater flexibility in workforce management.

Businesses have long criticised India’s work rules as a drag on manufacturing, which contributes less than a fifth to the country’s nearly $4 trillion economy.

But the Association of Indian Entrepreneurs expressed concern that the new rules would significantly increase operating costs for small and midsize enterprises and disrupt business continuity across key sectors.

It asked the government for transitional support and flexible implementation mechanisms. Not all unions oppose the overhaul.

The right-wing Bharatiya Mazdoor Sangh, aligned with Modi’s party, called on states to implement them after consultations on some of the codes. Indian states are expected to craft rules aligning with the new federal codes covering wages, industrial relations, social security and occupational safety.

Four new labour codes come into force as India seeks to attract investment and strengthen manufacturing.

India has announced a sweeping set of labour reforms, saying it will implement four long-delayed labour codes that the government says will modernise outdated regulations and extend stronger protections to millions of workers.

Prime Minister Narendra Modi said on X on Friday that the overhaul would provide “a strong foundation for universal social security, minimum and timely payment of wages, safe workplaces and remunerative opportunities”.

He said the changes would spur job creation and lift productivity across the economy.

The labour ministry echoed that message, saying the reforms place “workers, especially women, youth, unorganised, gig and migrant workers, firmly at the centre of labour governance”, with expanded social security and portable entitlements that apply nationwide.

The government says replacing 29 fragmented laws with four unified codes covering wages, industrial relations, social security and occupational safety will simplify compliance and make India more attractive for investment.

Many of India’s existing labour laws date back to the British colonial era and have long been criticised by businesses as complicated, inconsistent and a barrier to scaling up manufacturing, an industry that still accounts for less than 20 percent of India’s nearly $4-trillion gross domestic product (GDP).

The new rules formalise changes approved by parliament in 2020 but stalled for years due to political resistance and pushback from several states and unions.

The reforms introduce significant shifts in how factories operate. Women can now legally work night shifts, firms have greater room to extend working hours, and the threshold for companies requiring prior approval for layoffs has been raised from 100 to 300 workers.

Union opposition

Officials argue this flexibility will encourage employers to expand operations without fear of lengthy bureaucratic delays.

For the first time, the codes also define gig and platform work, offering legal recognition and expanding social protection to a fast-growing segment of the labour force.

Government estimates suggest the gig economy could reach more than 23.5 million workers by 2030, up sharply from about 10 million in 2024/25.

Economists say the changes may initially strain small and informal firms but could strengthen household incomes over time.

“In the short term, they may hurt small, unorganised firms, but in the long run … with minimum wages and increased social security, it could be positive for both working conditions and consumption,” said Devendra Kumar Pant of India Ratings & Research, speaking to the Reuters news agency.

Trade unions, however, remain fiercely opposed. “The labour codes have been implemented despite strong opposition from the trade unions and it will snatch the workers’ rights, including fixed-term jobs and rights available under the earlier labour laws,” said Amarjeet Kaur of the All India Trade Union Congress.

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Presenter: 

Adrian Finighan

Guests: 

Marena Lin – Co-founder of Project Restore Us, a volunteer-led organisation that supports communities facing food insecurity in Los Angeles

Niall Stanage – White House columnist for The Hill newspaper and digital media company in Washington, DC

Chris Tilly – Economist and professor at the University of California, Los Angeles