How do workers and employers view India’s new Labour Codes? New study has answers

A recent independent perception-based study undertaken by V. V. Giri National Labour Institute provides an early diagnosis of how workers & employers view the implementation process.

Representational image | Women working in a factory | Photo: Moushumi Das Gupta, ThePrint

India’s four Labour Codes, enacted between 2019 and 2020 and made effective recently, represent the most significant restructuring of labour regulation since Independence. By consolidating 29 central laws into four integrated frameworks covering wages, industrial relations, social security, and occupational safety and health, the reform seeks to balance two long-standing objectives: Strengthening worker protection and creating a predictable environment for enterprise. At a time when the Codes are moving from legislative intent to administrative practice, the critical question is not whether the reform is desirable in principle, but how it is being received by those who must live and work within it.

A recent independent perception-based study undertaken by the V. V. Giri National Labour Institute provides an early diagnosis of how workers and employers view the implementation process. The assessment is based on responses from stakeholders across sectors and regions and focuses on awareness, clarity of provisions, expected workplace changes, and the broader institutional environment. Since the Codes are at an early stage of operationalisation, the study does not attempt to measure outcomes. Rather, it captures informed expectations at a transitional moment, when institutional adjustment is still underway.

The broad pattern that emerges is one of constructive acceptance. Both workers and employers appear to view the Labour Codes as a directionally sound reform with the potential to improve labour market functioning over time. Perhaps the most significant finding is the convergence of perceptions across the two groups. Historically, labour reforms have often been interpreted through a lens of conflicting interests. The present evidence suggests that the Codes are increasingly being seen as a shared institutional framework rather than a unilateral regulatory intervention.

Among workers, expectations are particularly strong in relation to working conditions, employment security, and workplace safety. The provisions on working hours, rest and leave, and regular wage payment are widely associated with improved discipline and predictability in employment. Occupational safety and health emerges as one of the most clearly recognised areas of change. Workers perceive that employer responsibility for safety is more explicitly defined and that protective measures are likely to improve. This reflects the visibility of safety obligations at the workplace level, where regulatory intent translates most directly into daily experience.

Equally important is the perceived expansion of social security. Workers express confidence that the new framework will extend coverage to contract, migrant, fixed-term, and platform workers who have historically remained outside formal protection. Registration systems and the portability of benefits across jobs and locations are widely seen as facilitating access. In a labour market characterised by mobility and informality, such institutional mechanisms are central to building continuity in social protection.

Employers, for their part, respond most strongly to the governance and operational dimensions of the reform. Uniform implementation across states, digital compliance systems, and a facilitative enforcement approach receive particularly high recognition. These responses underline an important feature of the reform process. For enterprises, the effectiveness of the Codes depends less on statutory design alone and more on the manner in which they are implemented. Administrative predictability, regulatory consistency, and reduced transaction costs are seen as critical to improving the business environment.

Workforce flexibility also emerges as a central concern for employers. Fixed-term employment and adaptable staffing arrangements are viewed as necessary for operating in competitive and uncertain markets. At the same time, provisions related to universal minimum wages, timely wage payment, structured industrial relations procedures, and uniform safety norms are recognised as contributing to workplace discipline and stability. In this sense, the Codes are being interpreted not only as compliance instruments but also as a framework for managing employment relationships more effectively.

The expansion of social security is acknowledged by employers as well, particularly in relation to gig and contract workers. It reflects the broader structural shift underway, as labour regulation adapts to new forms of work that fall outside traditional employer–employee arrangements.

Across both stakeholder groups, industrial relations provisions aimed at promoting structured dialogue and formal grievance handling receive positive recognition. Gender-related provisions also find broad acceptance, with both workers and employers recognising the policy direction towards greater participation of women in the workforce, alongside the need for workplace-level adjustments in safety and transport arrangements.

At the same time, the study highlights an important feature of the current phase. A significant share of respondents across themes indicate uncertainty rather than disagreement. This is particularly evident in areas involving procedural details, statutory interpretation, and operational responsibilities. Such responses point to evolving awareness and institutional learning rather than resistance to the reform itself. They also underline the central role of communication, training, and guidance in shaping the process of implementation.

The early evidence therefore points to a reform that has secured a degree of legitimacy across diverse segments of the labour market. Stakeholders recognise the direction of change and associate the Codes with improvements in regulatory coherence, workplace standards, and institutional predictability. Such alignment between policy intent and stakeholder expectations is a critical precondition for successful implementation.

The challenge now lies in consolidating these early signals. Awareness generation, sector-specific guidance, and capacity building for both employers and workers will be essential. The strengthening of digital and administrative systems that translate statutory provisions into accessible services is also important. As implementation progresses across states, phased impact assessments can help identify effective practices and support adaptive policy refinement.

Labour market reform is rarely judged by legislation alone. Its credibility ultimately rests on whether institutions function predictably and stakeholders experience tangible improvements over time. The early perceptions captured in this study suggest that the Labour Codes have established a credible foundation. Sustained administrative effort and continued engagement will be needed to ensure that this foundation translates into durable gains in both worker protection and enterprise development.

Dr Arvind is the Director General of V.V. Giri National Labour Institute. Views are personal.