Explained: Why new labour codes have triggered protests - and what unions are opposing

The Centre has implemented its most sweeping labour overhaul in decades, notifying four labour codes that replace 29 existing workplace laws. The Code of Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020) and the Occupational Safety, Health and Working Conditions Code (2020) were all cleared by Parliament five years ago and formally brought into effect on Friday. 

The government has described the rollout as an effort to simplify fragmented regulations dating back to the colonial era, modernise workplace conditions and create a unified framework for wages, social security, industrial relations and safety.

The changes expand fixed-term employment, allow longer factory shifts, permit night work for women, raise the layoff approval threshold from 100 to 300 workers, and promise universal social security with statutory minimum wages, timely payments, mandatory appointment letters and annual health check-ups for workers aged 40 and above.

Under the new labour codes, all gig workers will get social security coverage. They will get PF, ESIC, insurance, and other social security benefits. The codes also mandate appointment letters to all workers as written proof will ensure transparency, job security, and fixed employment.

Why unions are opposing the codes

Ten major trade unions aligned with parties opposing Prime Minister Narendra Modi condemned the rollout as a "deceptive fraud" and demanded the immediate withdrawal of the laws. Their joint statement, released late on Friday, argued that while the government has framed the codes as a simplification exercise, they also enable easier hiring and firing and weaken several long-standing safeguards. 

Although the labour ministry has held more than a dozen consultations with unions since June 2024, union leaders say they were sidelined and that key objections were ignored. They have planned nationwide protests on Wednesday, continuing a five-year campaign in which they have repeatedly mobilised against the reforms.

Why CPI(M) is escalating the criticism

The CPI(M) issued a detailed statement on Saturday amplifying the opposition. The party said it strongly opposes the notification of the four Labour Codes by the BJP-led Central government. The Left party also claimed that the reforms "dismantle 29 hard-won labour laws that have, till now, protected the workers to some extent." 

According to the party, the older framework, despite its flaws, ensured "wages, working hours, social security, industrial safety, inspection, compliance mechanisms, and collective bargaining were in place." The CPI(M) argued that instead of simplification, the new rules "seek to dilute and abolish long-established existing rights and entitlements and shift the balance sharply in favour of employers." 

It dismissed the government's claim that the reforms would attract investment, stating, "The codes are designed to leave labour unprotected in the face of the onslaught of capital." The party also alleged that the codes attempt "to snatch away the right to strike and criminalise any collective action by the working class." 

How businesses are responding

Reactions from industry have been mixed. Large manufacturers have long criticised the country's labour rules as restrictive and argued that they prevent factory expansion and discourage investment. However, concerns have emerged from smaller firms. The Association of Indian Entrepreneurs said the new structure could significantly increase operating costs for small and midsize enterprises and disrupt continuity across several sectors. The group has asked the government for transitional support and flexible implementation mechanisms to help businesses adjust to the new compliance environment.

Why this marks a pivotal shift

The new codes are the most extensive restructuring of India's workplace laws in over thirty years. They consolidate decades-old statutes, introduce a single regulatory framework and bring gig, platform and migrant workers into formal social security systems. Supporters argue that the shift provides clarity, reduces compliance complexity and extends basic protections to previously excluded categories of workers. 

What comes next

With the notification complete, states must now finalise their own rules to give effect to the codes. However, labour unions are preparing for protests on Wednesday, and opposition parties are expected to take the issue forward both inside and outside Parliament.