New Delhi : The empowerment of labour forms the cornerstone of an empowered, prosperous, and Aatmanirbhar India. Reflecting this vision, employment in India has shown remarkable growth- rising from 47.5 crore in 2017–18 to 64.33 crore in 2023–24, a net addition of 16.83 crore jobs in just six years. During the same period, the unemployment rate declined sharply from 6.0% to 3.2%, and 1.56 crore women entered the formal workforce, underscoring the Government’s emphasis on inclusive and sustained labour empowerment.
The positive outlook of the labour market has also led to a broader socio-economic transformation, mirrored by declining proportion of people below the international poverty line. Additionally, India’s social protection system has expanded rapidly to become one of the largest globally.
Labour is a key driver of economic growth and development. In order to simplify and strengthen the framework governing workers’ rights, the Government consolidated 29 labour laws into four comprehensive Labour Codes- namely, 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. This historic reform ensures that workers gain easier access to security, dignity, health, and welfare measures, reinforcing India’s commitment to a fair and future-ready labour ecosystem.
Rationale Behind Codification of Existing 29 Labour Laws
Reforms in labour laws are an ongoing process. The Government continuously works to modernize and streamline the legislative framework in line with the evolving economic and industrial landscape of the country. The codification of 29 existing labour laws into four Labour Codes was undertaken to address long-standing challenges and make the system more efficient and contemporary. The codification aims to enhance ease of doing business, promote employment generation, ensure safety, health, social & wage security for every worker.
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- Modernizing outdated laws: Most labour legislations were framed during the pre-Independence era,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.
Formulation of 4 Labour Codes
An important reason of rationalizing labour laws via codification was to simplify the registration, licensing framework by introducing the concept of a Single Registration, Single License, and Single Return, thereby reducing the overall compliance burden to spur employment.
The second National Commission on Labour had recommended that the existing Labour Laws should be broadly grouped into four/ five Labour Codes on functional basis. Accordingly, the Ministry of Labour & Employment started the exercise to rationalize, simplify and amalgamate the relevant provisions of the labour laws in four codes. The four Labour Codes were enacted after the deliberations held in the tripartite meeting of the Government, employers’, industry representatives and various trade unions during 2015 to 2019. The Code on Wages, 2019 was notified on 8th August, 2019 and the remaining three Codes were notified on 29th September, 2020.
