Latest Labour Bill Passed by Modi: Benefits, Changes and Impact Explained

 India Ushers in a New Era of Labour Laws

By: Vijesh Nair

Date:24/11/2025

Introduction

On 21 November 2025, the Indian government formally implemented four major labour codes that together replace 29 older central labour laws. 
This move is being touted as one of the most significant labour law overhauls in India since independence. 

What Has Changed?

Here are key reforms and their implications:

• The four codes are:

  • Code on Wages, 2019

  • Industrial Relations Code, 2020

  • Code on Social Security, 2020

  • Occupational Safety, Health & Working Conditions Code, 2020 

• Older laws—many dating back to the colonial or early post‐independence era—were fragmented, overlapping and often poorly aligned with modern employment realities. The new codes aim to simplify the legal framework.

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• Some of the headline changes:

  • Introduction of mandatory appointment letters for all workers (formalisation).

  • Creation of a minimum floor wage concept to lift wages across geographies and sectors. Coverage extended to wage workers in informal, contract, gig and platform sectors (for the first time, in many cases). 

  • Raising the threshold of workers for which layoffs/trenchments require government approval — from 100 to 300 workers in some cases. 

  • Allowing women to work in more shifts (including night shifts) under defined safety and consent conditions. 

  • A unified registration/licensing framework and single portal for compliance to reduce red‐tape. 

Why the Reform?

Several drivers behind this overhaul include:

• The government sees India’s labour regulation architecture as a bottleneck for scaling manufacturing, increasing employment, boosting productivity and making India more competitive globally. 

• The existing laws were deemed archaic: many were framed in the 1930s-1950s, before the digital economy, gig work or expanded women’s workforce participation.

• By simplifying the regulatory framework, the hope is to reduce compliance costs for businesses, encourage formal employment, and extend protections for previously unprotected workers.

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Who Stands to Benefit?

• Workers in the informal sector, gig economy and platform work gain improved legal recognition and access to social security netsWomen, youth and migrant workers are explicitly highlighted in the government narrative as key beneficiaries.

• Employers (especially in manufacturing and services) may benefit from streamlined rules and clearer frameworks for workforce management.

Criticism & Concerns

• Trade unions have expressed strong opposition. Many argue the codes give more flexibility to employers at the cost of job security and labour rights.

• Smaller firms worry about the immediate compliance burden (even if long‐term gains exist). 

• Implementation across different states is crucial: India’s labour laws often require state‐level rules and coordination. Variation may lead to uneven impact.

What This Means for Businesses & Workers in Kerala / Palakkad Area

For our region (Kerala, Palakkad and surrounds):

• Businesses will need to review their wage structure, employment letters, contracts, and ensure alignment with the national floor wage and new definitions.

• Workers in contract, gig or informal employment (common in our area) may now have enhanced rights.

• For migrant workers (often from other states working here), the new portability and registration provisions can matter.

• Local governments and employers will need to monitor how the state implements the central codes (through notifications, rules). Workers and unions should stay alert and informed.

Verdict and Outlook

This labour law reform marks a milestone. If implemented effectively, it has the potential to modernise India’s labour ecosystem: better wages, broader protections, clearer compliance. However, the success will depend on how well the rules are enforced, how smooth the transition is, and how inclusive it is for the vulnerable segments of the workforce.

For workers, it offers hope of greater formalisation, rights and security. For businesses, it offers clarity but also a transition challenge. The next few years will determine if this becomes a win‐win or if gaps undermine its promise.

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