BONUS: India's Latest Policy Reforms - Labour Laws for the Gen Next

29 Laws Gone. 4 Codes In. Is This The End of Job Security?

On November 21, 2025, India effectively deleted 29 outdated labor laws and replaced them with four massive new codes. This isn't just paperwork; it’s a "skyscraper renovation" happening while the economy is still running inside. 

This Deep Dive uncovers the massive wins—like social security for gig workers and gratuity after just one year —but also exposes the "devil in the details". From effectively banning strikes to a loophole that might kill permanent jobs forever , we break down exactly how workplace rights in the world's fifth-largest economy have fundamentally changed.

Chapters

• 0:00 The Great Consolidation: 29 laws repealed and streamlined into four major codes effective Nov 21, 2025
• 2:28 Universal Wins: The new "floor" for welfare, including a national minimum wage and mandatory appointment letters for all.
• 4:40 The FTE Revolution: Fixed Term Employees now get full perk parity with permanent staff, including gratuity after just one year
• 6:26 Gig Economy Recognition: For the first time, delivery riders and platform workers get social security funded by a turnover tax on aggregators like Uber and Amazon
• 9:28 Women in the Workforce: Breaking barriers—women can now legally work night shifts and in hazardous industries (like mining) with consent
• 11:15 Sector Specifics: Strict salary schedules for IT (by the 7th of the month) and overtime rules for Media professionals
• 13:19 Unions & The 75% Rule: The new Industrial Relations structure and the high threshold to be a "sole negotiating union"
• 16:54 Reskilling Fund: A new mandatory fund where employers pay 15 days of wages to help retrenched workers transition
• 20:07 The Strike Ban Controversy: Why new notice requirements effectively neutralize the legal right to strike for all industries
• 22:02 Executive Overreach: The constitutional crisis of the government having the power to veto judicial tribunal awards
• 24:19 The Death of the Permanent Job? How the new FTE rules create a massive incentive to replace permanent staff with rolling contracts

Transcript

[Speaker 2] (0:00 - 0:10)
Welcome to the Deep Dive. Today, we're navigating a legal shift that is just so massive. It's fundamentally reshaping the world's fifth largest economy.

[Speaker 1] (0:11 - 0:12)
We're talking about India's new labor codes.

[Speaker 2] (0:13 - 0:20)
Exactly. These codes, they fully came into effect on November 21, 2025. And they represent this colossal undertaking.

[Speaker 1] (0:20 - 0:26)
It's like rarvating an entire skyscraper while people are still working inside. That's a good way to put it.

[Speaker 2] (0:26 - 0:29)
And that date, November 21st, is so crucial, isn't it?

[Speaker 1] (0:29 - 0:38)
It is. It's the moment that 29 different, often complex, often conflicting, and frankly, very outdated labor laws were all just gone.

[Speaker 2] (0:39 - 0:39)
Repealed and consolidated.

[Speaker 1] (0:40 - 0:51)
Right. Streamlined into just four major codes. You have the Code on Wages from 2019, the Industrial Relations Code 2020, the Social Security Code 2020, and the OSH Code.

[Speaker 2] (0:51 - 0:55)
The Occupational Safety, Health and Working Conditions Code, also 2020.

[Speaker 1] (0:55 - 0:56)
That's the one.

[Speaker 2] (0:56 - 1:03)
So our mission today is to give you a shortcut to getting fully informed on this. It's essential knowledge, really, whether you're running a business, advising a client.

[Speaker 1] (1:03 - 1:07)
Or you're just curious about the future of work in such a huge industrializing nation.

[Speaker 2] (1:08 - 1:17)
Because this isn't just shuffling papers around in a bureaucracy. This is a fundamental change to workplace rights. We're talking about everything from guaranteed minimum wages for all.

[Speaker 1] (1:17 - 1:24)
To gratuity rules changing literally overnight. Fixed work hours becoming the norm. Stronger safety rules that affect everyone.

[Speaker 2] (1:25 - 1:28)
From IT professionals to, say, someone working in an underground mine.

[Speaker 1] (1:30 - 1:41)
The official thinking is twofold. First, make it easier for businesses, you know, improve compliance, get rid of all the contradictory laws and boost that ease of doing business metric.

[Speaker 2] (1:41 - 1:42)
OK. And the second reason?

[Speaker 1] (1:43 - 1:52)
Second, and maybe more importantly, is to strengthen and widen the social safety net, especially for workers who were kind of in the shadows before, like in the gig economy.

[Speaker 2] (1:53 - 1:55)
But as you always say, when you condense a complex system.

[Speaker 1] (1:56 - 1:59)
The devil is in the detail. And that's where you find all the legal controversy.

[Speaker 2] (1:59 - 2:08)
All right. Let's unpack this. It's a lot to take in.

So we're going to do this logically. We'll start with the universally positive changes. The real concrete benefits for workers.

[Speaker 1] (2:08 - 2:09)
A new baseline for welfare.

[Speaker 2] (2:10 - 2:17)
Then we'll dive deep into the structure of the industrial relations framework. That's where we find the new rules for unions, disputes, all that.

[Speaker 1] (2:17 - 2:25)
And finally, we have to analyze the key controversies. The potential unintended consequences hidden in the fine print.

[Speaker 2] (2:25 - 2:26)
Because that's where the real friction is.

[Speaker 1] (2:26 - 2:27)
That's where it always is.

[Speaker 2] (2:28 - 2:37)
So let's start with the immediate wins, the tangible benefits. If the goal was to elevate the condition of the average worker, this is where we see the most impressive results.

[Speaker 1] (2:38 - 2:44)
Oh, absolutely. Especially for people who were previously operating in that huge undocumented shadow economy.

[Speaker 2] (2:45 - 2:46)
This is the baseline upgrade.

[Speaker 1] (2:46 - 2:53)
It is. It's about establishing the foundational changes that raise the floor for everyone moving towards a national standard.

[Speaker 2] (2:53 - 2:58)
And that starts with the absolute basics, like a mandated minimum wage for all workers.

[Speaker 1] (2:58 - 3:08)
Which sounds so simple. But historically, the lack of a standard minimum across all the states and different industries. It just allowed for huge wage gaps and exploitation.

[Speaker 2] (3:08 - 3:09)
So how does it work now?

[Speaker 1] (3:09 - 3:19)
The central government is now empowered to set a national floor wage. Think of it as a non-negotiable baseline. No state, no employer can pay less than that.

[Speaker 2] (3:20 - 3:21)
But states can pay more.

[Speaker 1] (3:21 - 3:29)
They can. And they're encouraged to. But they can never go below that floor.

It just brings so much clarity and frankly, dignity to the lowest paid workers.

[Speaker 2] (3:29 - 3:38)
And this formalization is cemented by another seemingly small detail. A formal appointment letter is now compulsory for every worker.

[Speaker 1] (3:38 - 3:40)
That sounds minor, but it's massive.

[Speaker 2] (3:40 - 3:41)
Why? Why is that so important?

[Speaker 1] (3:41 - 3:50)
Because it's the first step to being officially recognized. That letter formalizes the job. It forces the employer to maintain a documented employment record.

[Speaker 2] (3:50 - 3:52)
And that record is the key to everything else.

[Speaker 1] (3:52 - 4:01)
It's the key. It's critical for accessing social protections, insurance, retirement benefits down the line. Without it, millions of workers were just invisible to the system.

[Speaker 2] (4:01 - 4:10)
And beyond just the formality, the code attacks some fundamental abuses. Wages are guaranteed even during leave, which was a huge inconsistency before.

[Speaker 1] (4:10 - 4:20)
And timely payment. That's a huge one. It addresses a massive historical pain point.

Think about construction or manufacturing where payments could be delayed for weeks, even months.

[Speaker 2] (4:20 - 4:22)
A huge source of stress for families.

[Speaker 1] (4:22 - 4:28)
Immense. The code now specifies clear schedules. It brings predictability and consistency.

[Speaker 2] (4:28 - 4:40)
OK, now here's where it gets really interesting. Structurally speaking, the specific gains for workers who were, you know, defined by their instability. Let's talk about fixed term employees or FTEs.

[Speaker 1] (4:40 - 4:48)
Right. So these are workers hired directly by the company, but for a specific non-permanent period, maybe for a project or a season.

[Speaker 2] (4:49 - 4:51)
And these roles were a bit of a loophole in the past.

[Speaker 1] (4:51 - 4:59)
A huge loophole. It gave employers flexibility, sure, but it starved the workers of the stability and benefits that their permanent college got.

[Speaker 2] (4:59 - 5:00)
So what's the new rule?

[Speaker 1] (5:00 - 5:06)
The new rule is full parity. Simple as that. FTEs now get the exact same benefits as permanent staff.

[Speaker 2] (5:07 - 5:09)
Same leave. Same medical cover. Same social security.

[Speaker 1] (5:09 - 5:15)
Everything. All the perks. They are, for the duration of their contract, treated identically to a permanent employee.

[Speaker 2] (5:15 - 5:21)
You mentioned gratuity changing. This detail seems to be the most profound shift for these FTEs.

[Speaker 1] (5:22 - 5:30)
It is. It's a game changer. Previously, a worker needed five years of continuous service to qualify for that lump sum payment when they leave a job.

[Speaker 2] (5:30 - 5:33)
Five years. That's a long time for a short term contract.

[Speaker 1] (5:33 - 5:44)
Exactly. And that was the problem. Most short term contracts, especially in, say, I.T. or consulting, they don't last that long. The employer could just end the contract after four years and 11 months.

[Speaker 2] (5:45 - 5:48)
And legally avoid paying the gratuity? Precisely.

[Speaker 1] (5:48 - 5:52)
But under the new codes, that threshold drops dramatically.

[Speaker 2] (5:52 - 5:53)
To what?

[Speaker 1] (5:53 - 5:55)
Just one year of continuous service.

[Speaker 2] (5:55 - 5:59)
One year. Wow. So break that down for us.

What does that mean in practice?

[Speaker 1] (5:59 - 6:10)
It means if an employer hires an FTE for, say, a two year project and then chooses not to renew the contract, that worker still walks away with their gratuity payment after completing that first year.

[Speaker 2] (6:10 - 6:12)
So it offers real protection against job insecurity.

[Speaker 1] (6:13 - 6:19)
It does. It provides a crucial financial cushion when you're moving between projects. It just boosts income stability in a really meaningful way.

[Speaker 2] (6:19 - 6:26)
That's a genuine structural shift. Let's pivot to the 21st century workforce, gig and platform workers.

[Speaker 1] (6:27 - 6:30)
Your delivery riders, your app based drivers.

[Speaker 2] (6:30 - 6:39)
E-commerce fulfillment staff for the first time, gig work, platform work and the aggregators, the companies running these apps, are officially recognized in labor law.

[Speaker 1] (6:39 - 6:48)
And that inclusion is massive. We're talking about tens of millions of people who before this were just completely outside the formal Social Security system.

[Speaker 2] (6:48 - 6:50)
They had flexibility, but no safety net.

[Speaker 1] (6:50 - 6:57)
None. Immense instability, no benefits, zero job security. The code acknowledges that reality.

[Speaker 2] (6:57 - 7:02)
So how is this being funded? Because they aren't traditional employees, so they're not paying traditional payroll taxes, right?

[Speaker 1] (7:02 - 7:12)
Right. And the mechanism is really unique. The aggregator, so your Ubers and your Amazons of the world, they have to contribute one to two percent of their annual revenue into special worker welfare funds.

[Speaker 2] (7:12 - 7:13)
One to two percent of revenue?

[Speaker 1] (7:13 - 7:19)
Of their annual revenue, yes. And that contribution is capped at five percent of their total payouts to the workers.

[Speaker 2] (7:20 - 7:26)
That's fascinating. So it's basically a social responsibility tax tied directly to the platform's business model.

[Speaker 1] (7:26 - 7:36)
You've got it. It acknowledges that the platform benefits directly from this pool of labor. So it has to contribute to their welfare.

It creates a sustainable funding stream for their Social Security.

[Speaker 2] (7:36 - 7:46)
OK. But a key problem for these workers is that they're often mobile. They cross state lines.

They might work for multiple apps. How do they actually access these benefits?

[Speaker 1] (7:47 - 7:55)
Accessibility and portability were top priorities. The benefits are accessed using an auto-linked universal account number or UAN.

[Speaker 2] (7:55 - 7:56)
A single ID.

[Speaker 1] (7:56 - 8:03)
A single identifier that ensures full portability of benefits, no matter which state you're in or which platform you're working for.

[Speaker 2] (8:03 - 8:05)
Let's break down the practical impact of that.

[Speaker 1] (8:05 - 8:22)
OK, so take a migrant gig worker. Let's say a delivery driver works in one city for six months, then moves back to their hometown in another state for the rest of the year. Their security contribution just keeps accruing under that single UAN.

It doesn't matter who they work for or where they are physically.

[Speaker 2] (8:23 - 8:24)
So it follows them.

[Speaker 1] (8:24 - 8:33)
It follows them. Before this, moving meant losing access to any local welfare scheme. Now their Social Security builds up continuously.

It's a huge deal.

[Speaker 2] (8:33 - 8:42)
Moving on to another massive group. Contract workers. These are people employed through a third party agency, right?

Like security guards or cleaning staff at a big company.

[Speaker 1] (8:42 - 8:49)
Yes. And they also get a major upgrade, mandatory health and Social Security benefits. But here's the key shift.

[Speaker 2] (8:49 - 8:50)
What's that?

[Speaker 1] (8:50 - 8:56)
The responsibility for providing this coverage now falls on both the contractor and the principal employer.

[Speaker 2] (8:56 - 8:58)
So the company where the work is actually being done.

[Speaker 1] (8:59 - 8:59)
Exactly.

[Speaker 2] (8:59 - 9:02)
And why is that shift in responsibility so vital?

[Speaker 1] (9:02 - 9:17)
Because historically, contractors, especially smaller ones, could easily just disappear. They'd evade their Social Security duties. By putting the onus on the principal employer, the bigger company with assets and a reputation.

The enforcement is so much stronger.

[Speaker 2] (9:17 - 9:19)
So the worker is protected no matter what.

[Speaker 1] (9:19 - 9:31)
They're not deprived of their safety net. And there's an added focus on health for this group, too. They are now entitled to free annual health checkups.

It's mandatory. It's about early detection of any workplace health issues.

[Speaker 2] (9:32 - 9:40)
Finally, in this section, let's look at the explicit focus on women workers. The codes seem to really try to remove some historical barriers here.

[Speaker 1] (9:40 - 9:52)
They do. The framework is very explicit. It outlaws gender-based discrimination and mandates equal pay for equal work.

That's a powerful legal tool against the wage gap.

[Speaker 2] (9:52 - 9:55)
And this leads to some really significant shifts in job access, doesn't it?

[Speaker 1] (9:55 - 10:04)
Oh, absolutely. It breaks down legal barriers that used to restrict their working hours and locations. So, for example, women can now legally work night shifts across all establishments.

[Speaker 2] (10:04 - 10:05)
Which was highly restricted before.

[Speaker 1] (10:06 - 10:15)
Very restricted. This unlocks higher earning potential, especially in sectors like IT, BPO's and manufacturing. And even more, they can now take on any role.

[Speaker 2] (10:15 - 10:15)
Any role.

[Speaker 1] (10:15 - 10:21)
Any role, including jobs that were previously forbidden, like underground mining or operating heavy machinery.

[Speaker 2] (10:21 - 10:25)
That is a massive, symbolic and practical change. But I assume there are conditions.

[Speaker 1] (10:26 - 10:37)
Of course. The law is very clear. The employer must put specific mandatory safety measures in place.

And crucially, they have to get the workers explicit consent.

[Speaker 2] (10:38 - 10:39)
It's about choice.

[Speaker 1] (10:39 - 10:45)
It's about removing the legal restriction that prevented them from choosing those roles. It's about equal opportunity, but with safety first.

[Speaker 2] (10:46 - 10:50)
And the inclusivity extends to family benefits, which is a detail I think people might miss.

[Speaker 1] (10:50 - 11:02)
It is a critical social detail. For one, grievance panels must now include women. But also the definition of family for a female employee has been expanded.

It now explicitly includes parents in law.

[Speaker 2] (11:02 - 11:04)
So she can cover them under her benefits.

[Speaker 1] (11:04 - 11:11)
Exactly. It's a recognition of the joint family structure. And it significantly expands for social security coverage.

[Speaker 2] (11:11 - 11:15)
The codes also bring in sector specific rules. Let's start with IT and ITES.

[Speaker 1] (11:15 - 11:22)
Right. Even in this white collar sector, you'd see salary payment irregularities, maybe linked to client billing cycles or something.

[Speaker 2] (11:22 - 11:23)
So the code addresses that.

[Speaker 1] (11:23 - 11:32)
Head on. It mandates a strict salary schedule. Wages must be paid by the seventh of every month, period.

It brings that predictable cash flow that's so essential.

[Speaker 2] (11:33 - 11:36)
And the compulsory appointment letters we talked about. That applies here, too.

[Speaker 1] (11:36 - 11:41)
It does. It closes any loopholes and ensures their documentation is solid from day one.

[Speaker 2] (11:41 - 11:48)
What about media professionals? The definition of who's a worker must be expanding to keep up with technology.

[Speaker 1] (11:48 - 12:05)
It's a long overdue inclusion. Digital media workers, journalists, stunt performers, dubbing artists. So many of them worked under informal arrangements.

Right. They are now formally brought under the umbrella of formal employment, guaranteed benefits, mandatory appointment letters, timely wages.

[Speaker 2] (12:05 - 12:10)
And there's significant overtime protection here, which makes sense given the 247 nature of media.

[Speaker 1] (12:10 - 12:19)
Yes. If they work overtime and they have to consent to it, it must be paid at twice the normal rate. It protects them from those crushing deadlines and long hours.

[Speaker 2] (12:19 - 12:27)
Moving to MSME workers. Micro, small and medium enterprises. The backbone of the economy, but often lacking structure.

[Speaker 1] (12:27 - 12:38)
Now, they are all guaranteed the minimum wage and covered under the Social Security Code. And importantly, the codes mandate basic amenities. Non-negotiable things like rest areas, safe drinking water, canteens.

[Speaker 2] (12:39 - 12:41)
It's about standardizing the basic dignity of labor.

[Speaker 1] (12:42 - 12:48)
Exactly. Making sure that protections like paid leave and standard hours are no longer negotiable, even in a small company.

[Speaker 2] (12:48 - 12:50)
And quickly, hazardous industries.

[Speaker 1] (12:50 - 13:07)
Explicit safety nets. Free annual health checkups to prevent occupational illness. And employers have to set up mandatory safety committees to oversee everything.

And this is the environment, as we said, where women can now work, provided those very rigorous protocols are followed.

[Speaker 2] (13:08 - 13:14)
So Section 1 really paints a clear picture. A stronger, wider, more equitable safety net for pretty much every type of worker.

[Speaker 1] (13:15 - 13:19)
OK, so now we transition from individual rights and benefits to the collective rule book.

[Speaker 2] (13:19 - 13:23)
How workers organize, how employers manage and how conflicts get resolved.

[Speaker 1] (13:23 - 13:26)
Exactly. This is the world of the Industrial Relations Code.

[Speaker 2] (13:27 - 13:33)
And this code is the structural spine of the whole reform. It replaces three huge historical laws.

[Speaker 1] (13:33 - 13:44)
Correct. It swallows up the Industrial Disputes Act of 1947, which was about conflict. The Trade Unions Act of 1926, which was about organizing.

And the Industrial Employment Act of 1946 for internal work rules.

[Speaker 2] (13:45 - 13:46)
So its scope is massive.

[Speaker 1] (13:46 - 13:53)
It's comprehensive. It covers everything from unions and strikes to internal rules and dispute resolution.

[Speaker 2] (13:53 - 13:54)
Does it apply to everyone?

[Speaker 1] (13:54 - 14:04)
Nearly everyone. But there are specific exclusions. Things like charitable work, domestic work, and the sovereign functions of the state are generally not covered by these I.R. mandates.

[Speaker 2] (14:05 - 14:15)
OK, let's focus in on trade unions and negotiation power. Historically, a big problem was union fragmentation, right? An employer might have to deal with multiple competing unions.

[Speaker 1] (14:15 - 14:23)
A huge problem. So the new code tries to formalize things. For registration, a union needs to have at least 10 percent of the workers or 100 workers, whichever is less.

[Speaker 2] (14:24 - 14:25)
With a minimum of seven members.

[Speaker 1] (14:25 - 14:32)
Right. But the real change is in how the code decides which union actually gets to negotiate with management.

[Speaker 2] (14:32 - 14:33)
The recognition hierarchy.

[Speaker 1] (14:34 - 14:44)
The recognition hierarchy. Yes. The law wants to find a single powerful negotiating partner.

So the union that manages to enroll at least 75 percent of the workers as members.

[Speaker 2] (14:44 - 14:45)
75 percent.

[Speaker 1] (14:45 - 14:54)
That union becomes the sole negotiating union. That one entity speaks for the entire workforce. It simplifies negotiations immensely.

[Speaker 2] (14:54 - 15:05)
But that 75 percent threshold sounds incredibly high. It is high. Especially in big industries where you might have multiple unions with different ideologies.

Is that a realistic target?

[Speaker 1] (15:05 - 15:11)
That is the critical question. In many places, it's not realistic at all. The code acknowledges this.

[Speaker 2] (15:11 - 15:14)
So it has a fallback plan, which is the negotiating council.

[Speaker 1] (15:14 - 15:23)
Precisely. If no single union hits that 75 percent mark, a negotiating council is formed and representation on this council is strictly proportional.

[Speaker 2] (15:23 - 15:23)
How does that work?

[Speaker 1] (15:24 - 15:29)
For every 10 percent of the total worker membership a registered union has, they get one representative on the council.

[Speaker 2] (15:30 - 15:35)
So if Union A has, say, 45 percent and Union B has 35 percent.

[Speaker 1] (15:35 - 15:46)
Union A gets four seats. Union B gets three and so on. It ensures that while there's no single voice, every significant union has a formal, structured say at the table.

It's much less chaotic.

[Speaker 2] (15:46 - 15:52)
Let's turn to how employment exits are handled. Layoffs and retrenchment. We need crystal clear definitions here.

[Speaker 1] (15:52 - 16:03)
OK. So a layoff is defined by external necessity. The employer wants to keep the worker but can't provide work because of something like a power shortage or machine breakdown.

[Speaker 2] (16:04 - 16:04)
A temporary issue.

[Speaker 1] (16:05 - 16:15)
Right. Retrenchment is much broader. It's terminating someone's service for any reason that isn't disciplinary action, retirement or the end of a fixed term contract.

[Speaker 2] (16:15 - 16:17)
It's essentially downsizing.

[Speaker 1] (16:17 - 16:17)
Exactly.

[Speaker 2] (16:18 - 16:20)
What are the financial safety nets for a worker who's laid off?

[Speaker 1] (16:21 - 16:31)
For any place with 50 or more workers, if a worker with at least one year of service is laid off, they're entitled to 50 percent of their basic wages plus dearness allowance for that period.

[Speaker 2] (16:31 - 16:36)
So half pay to tide them over. And what about the severance package for retrenchment?

[Speaker 1] (16:36 - 16:44)
They get one month's notice or wages instead of notice. And the severance is 15 days wages for every year of continuous service they've put in.

[Speaker 2] (16:44 - 16:44)
OK.

[Speaker 1] (16:44 - 16:54)
And it's worth noting for bigger establishments, 100 or more workers, that notice period goes up to three months and they need prior government permission. We'll come back to that point.

[Speaker 2] (16:54 - 16:57)
Let's talk about the worker reskilling fund. This is completely new, isn't it?

[Speaker 1] (16:57 - 17:12)
It is. And it's one of the most proactive parts of this reform. The government sets up this dedicated fund and the employer has to contribute an amount equal to 15 days of the last drawn wages of every single retrenched worker into this fund.

[Speaker 2] (17:12 - 17:18)
So it's like a small premium the employer pays directly into a reskilling account for the worker. Why is that so important?

[Speaker 1] (17:19 - 17:28)
It guarantees immediate dedicated capital for that worker's transition. The goal is speed. The funds have to be used within 45 days of the retrenchment.

[Speaker 2] (17:28 - 17:29)
That's a strict deadline.

[Speaker 1] (17:29 - 17:39)
It is. It ensures the worker gets immediate access to resources for training or just to cover expenses while they look for a new job. It turns a job loss into a funded transition period.

[Speaker 2] (17:39 - 17:45)
Moving to the internal rulebook. The code mandates the formalization of work rules through standing orders.

[Speaker 1] (17:45 - 18:03)
This applies to all industrial establishments with 100 workers or more. They have to create certified standing orders that detail all the essential stuff like how workers are classified permanent, temporary FTE, standard work hours, specific termination procedures, grievance mechanisms. It standardizes the internal rules.

[Speaker 2] (18:03 - 18:07)
The government provides model standing orders. Does the employer just copy and paste those?

[Speaker 1] (18:08 - 18:18)
They use it as a baseline, but consultation is mandatory. Before they submit their draft, the employer has to consult with the trade unions. It's a crucial check and balance.

[Speaker 2] (18:19 - 18:24)
OK, finally, in this section, the refined dispute resolution mechanisms. If there's a conflict, where does it go?

[Speaker 1] (18:24 - 18:43)
The structure pushes for resolution inside the company first. It's a bipartite approach for big conflicts. Places with 100 or more workers need a works committee.

And for an individual's problem for individual grievances, establishments with 20 or more workers have to form a grievance redressal committee or GRC.

[Speaker 2] (18:44 - 18:45)
And how is that GRC structured?

[Speaker 1] (18:45 - 19:03)
To be fair, it's designed for parity, equal representatives from the employer and the workers. It ensures the worker's voice has equal weight before things escalate. And if those internal attempts fail, then you have legal avenues.

The code formalizes arbitration if both sides agree, or they can go to an industrial tribunal.

[Speaker 2] (19:04 - 19:06)
And there's a big change in how these tribunals are structured.

[Speaker 1] (19:07 - 19:17)
A very significant change. They're moving away from a purely judicial process. A tribunal now has two members, a judicial member, a judge and an administrative member.

[Speaker 2] (19:18 - 19:20)
Why add an administrative member?

[Speaker 1] (19:20 - 19:25)
This person has to have over 20 years of experience in fields like economics, business or labor relations.

[Speaker 2] (19:25 - 19:27)
So they bring real world context.

[Speaker 1] (19:27 - 19:43)
Exactly. The idea is to inject technical expertise into the process. Labor disputes aren't just about law.

They're about economics and industry realities. The judicial member handles the law. The administrative member provides the context.

It should lead to more holistic, practical decisions.

[Speaker 2] (19:43 - 19:51)
So Section 2 gives us this comprehensive structured system for everything from organizing workers to managing exits and resolving disputes.

[Speaker 1] (19:51 - 19:56)
So we've covered the benefits and the new structure. Now we have to turn to the friction points.

[Speaker 2] (19:57 - 20:01)
This is where ease of doing business might clash with worker protection.

[Speaker 1] (20:01 - 20:06)
Whenever you overhaul fundamental laws about power dynamics, controversies are just inevitable.

[Speaker 2] (20:07 - 20:13)
Let's start with what might be the most controversial change in the Industrial Relations Code. The widening of strike and lockout restrictions.

[Speaker 1] (20:14 - 20:22)
Right. Under the old 1947 Act, you needed to give 14 day prior notice before strike, but only if you were a public utility service.

[Speaker 2] (20:22 - 20:27)
A railway, a power grid. That makes sense. You can't have them just shut down without warning.

[Speaker 1] (20:27 - 20:36)
Of course. But what's fascinating is that the new IR code has taken that rule and extended it to all industrial establishments.

[Speaker 2] (20:36 - 20:36)
All of them.

[Speaker 1] (20:37 - 20:50)
All of them. Regardless of whether they are an essential service or not, a small manufacturing unit, a textile mill. Everyone.

The rationale for applying that public utility rule to every private industry is, well, it's not clear.

[Speaker 2] (20:51 - 20:58)
And this isn't just a formality, is it? The structure of the code means this notice requirement really curtails the ability to strike effectively.

[Speaker 1] (20:58 - 21:10)
That is the crucial implication. If you connect the dots, the ability for workers to take collective action is weakened. The notice is valid for 60 days.

But the code says you cannot strike during conciliation proceedings.

[Speaker 2] (21:10 - 21:11)
Which the employer will immediately start.

[Speaker 1] (21:12 - 21:15)
Of course. And you can't strike for seven days after they end.

[Speaker 2] (21:15 - 21:18)
And what if conciliation fails and the dispute goes to a tribunal?

[Speaker 1] (21:18 - 21:26)
Then the prohibition on striking extends for the entire duration of the tribunal proceedings. Plus another 60 days after the award is made.

[Speaker 2] (21:27 - 21:34)
So if a union gives its 14 day notice and the employer initiates a process that could take months or even years.

[Speaker 1] (21:35 - 21:43)
The workers are legally blocked from striking and the original 60 day validity of their notice just expires long before they have a resolution.

[Speaker 2] (21:43 - 21:45)
It effectively neutralizes the strike.

[Speaker 1] (21:45 - 21:54)
It can, yes. It makes it very difficult to strike on the intended date, which is the whole point of the strike. It severely limits the efficacy of industrial action.

[Speaker 2] (21:54 - 22:01)
This brings us to a major legal sticking point. The constitutional question over government power over judicial awards.

[Speaker 1] (22:02 - 22:06)
Yes. The code has basically copied a very controversial provision from the old law.

[Speaker 2] (22:06 - 22:07)
What's the provision?

[Speaker 1] (22:07 - 22:17)
The rule says a tribunal's award is enforceable in 30 days. But UT, the government, either central or state, can defer it or even make an order rejecting or modifying the award.

[Speaker 2] (22:18 - 22:18)
On what grounds?

[Speaker 1] (22:19 - 22:23)
Vague grounds. Public grounds like affecting the national economy or social justice.

[Speaker 2] (22:23 - 22:27)
So the executive branch can just veto a judicial outcome if they don't like it.

[Speaker 1] (22:28 - 22:39)
That is precisely the constitutional problem. Does this violate the fundamental principle of the separation of powers? The idea that the judiciary and the executive have to be independent.

[Speaker 2] (22:39 - 22:41)
And it creates a huge conflict of interest.

[Speaker 1] (22:41 - 22:50)
A massive one, because this power is available even when the government itself is a party to the dispute. The government is the largest employer in the country.

[Speaker 2] (22:50 - 22:54)
So as a litigant, they can also be the entity that rejects the ruling made against them.

[Speaker 1] (22:54 - 23:07)
Exactly. And we know this is legally contentious. The exact same provision existed in the 1947 Act and the Madras High Court struck it down back in 2011 on these very grounds.

They said it violates the basic structure of the Constitution.

[Speaker 2] (23:08 - 23:12)
So by replicating it, the new code is essentially inviting a legal challenge.

[Speaker 1] (23:13 - 23:16)
An immediate challenge in the Supreme Court is almost guaranteed.

[Speaker 2] (23:16 - 23:25)
OK, let's talk about delegated legislation and the retrenchment threshold. The rule requires prior government permission for retrenchment in places with 100 or more workers.

[Speaker 1] (23:25 - 23:35)
Right. That 100 worker threshold is the historical standard. Under the old act, to change that number, you needed a legislative amendment.

Parliament had to debate and vote on it.

[Speaker 2] (23:35 - 23:36)
There was democratic oversight.

[Speaker 1] (23:37 - 23:47)
Yes. But the new IR code changes that. It allows the central or state government to increase or decrease this 100 worker threshold just by an executive notification.

[Speaker 2] (23:47 - 23:53)
That's delegated legislation. Parliament is handing its power over to the executive branch.

[Speaker 1] (23:53 - 24:03)
It is. And it raises a big question about accountability. Should a government be able to change such a critical threshold, one that impacts the job security of thousands with just the stroke of a pen?

[Speaker 2] (24:04 - 24:09)
So a government focused on ease of doing business could just raise the threshold to 300, for example.

[Speaker 1] (24:09 - 24:19)
And suddenly all businesses with up to 299 workers could retrench people without prior government permission. It's a massive shift in power. With no legislative debate.

[Speaker 2] (24:19 - 24:26)
Now, let's circle back to the nuance of fixed term employment, FTE. We praised the benefit parity earlier, but we have to look at the risks.

[Speaker 1] (24:27 - 24:36)
Yes. And it's vital to remember the difference. An FTE is on the company's payroll and gets all the benefits.

Contract labor is through an agency.

[Speaker 2] (24:36 - 24:40)
So an FTE is better protected. But what's the structural risk?

[Speaker 1] (24:40 - 24:49)
The risk is all in the power dynamic of renewal. The employment automatically ends when the contract is up. The employer has the sole power to renew or not renew.

[Speaker 2] (24:49 - 24:54)
And because it's not technically a retrenchment, there's no notice or severance required.

[Speaker 1] (24:54 - 25:03)
Right. The worker is in a state of constant insecurity. It might deter them from raising issues about pay, about hours, because they're always worried about their contract not being renewed.

[Speaker 2] (25:04 - 25:07)
What stands out to you in the fine print about how FTEs can be used?

[Speaker 1] (25:08 - 25:16)
What stands out is what's not there. Historically, the law tried to stop employers from using contract labor for work that was perennial or permanent in nature.

[Speaker 2] (25:16 - 25:18)
So you couldn't use a temp for a permanent job.

[Speaker 1] (25:18 - 25:22)
Right. But the new code has no such restriction on the use of FTE workers.

[Speaker 2] (25:23 - 25:31)
That is the key insight. So an employer could now hire FTEs for roles that were always permanent, like accounting or routine maintenance.

[Speaker 1] (25:31 - 25:42)
They could. And guarantee them full benefits for one year, but keep the right to just let the contract lapse annually. It avoids all the complexities of firing a permanent employee.

[Speaker 2] (25:42 - 25:47)
So the question for an employer becomes, why hire a permanent worker?

[Speaker 1] (25:47 - 26:01)
Exactly. Why go through all the trouble of a three month notice period and getting government permission for retrenchment when you can hire an FTE who does the same job, gets the same benefits, but whose employment can be ended simply by not renewing a contract?

[Speaker 2] (26:01 - 26:07)
It creates a huge incentive to replace stable, permanent jobs with a cycle of fixed term contracts.

[Speaker 1] (26:07 - 26:12)
A massive incentive. And that would fundamentally change the culture of job security in the organized sector.

[Speaker 2] (26:12 - 26:14)
From permits to contractualism.

[Speaker 1] (26:14 - 26:19)
A shift that gives maximum flexibility to the employer, but minimum security to the worker.

[Speaker 2] (26:20 - 26:27)
Finally, let's touch on unclear definitions. Good law needs clear definitions and the sources play on some gaps in the IR code.

[Speaker 1] (26:27 - 26:40)
A big one is the definition of a worker. The code excludes people in a managerial or supervisory capacity who earn over a certain amount. But the code does not define manager or supervisor.

[Speaker 2] (26:40 - 26:42)
So it's left open to interpretation.

[Speaker 1] (26:42 - 26:52)
Wide open. Is a team lead earning just over the threshold a supervisor and therefore excluded from protections like overtime pay, even if their job is mostly operational?

[Speaker 2] (26:52 - 26:54)
That ambiguity is a massive loophole.

[Speaker 1] (26:55 - 27:04)
It is. The standing committee that reviewed the OSH code actually recommended that these terms be clearly defined to avoid this exact problem. But that advice wasn't taken for the IR code.

[Speaker 2] (27:05 - 27:06)
Are there any other missing terms?

[Speaker 1] (27:07 - 27:23)
Yes. The terms contractor and establishment are also undefined within the IR code itself. They're defined in the other three codes, but their absence in this specific code leaves room for inconsistency and legal arguments.

It kind of defeats the stated purpose of uniformity.

[Speaker 2] (27:23 - 27:37)
So while the intent to streamline is clear, the technical execution leaves some big questions on the table. So this deep dive has really shown us the two sides of this reform, hasn't it? On one hand, you have massive, long overdue gains for marginalized groups.

[Speaker 1] (27:37 - 27:42)
Gig workers are finally recognized. FTEs get quick access to gratuitous opportunity after just one year.

[Speaker 2] (27:43 - 27:50)
And women are breaking into roles that were previously forbidden. The social safety net is undeniably wider and stronger.

[Speaker 1] (27:50 - 28:02)
And the whole formalization drive is huge. Mandatory minimum wages, compulsory appointment letters, strict payment timelines. It really raises the foundational floor of employment dignity.

[Speaker 2] (28:02 - 28:07)
But all the complexity, all the controversy is concentrated in that industrial relations fine print.

[Speaker 1] (28:07 - 28:14)
Right. We talked about the stifling of the right to strike, the constitutional questions about government power over tribunal awards.

[Speaker 2] (28:14 - 28:19)
And the delegation of that critical wanted worker threshold for retrenchment.

[Speaker 1] (28:19 - 28:25)
And if we want to apply this knowledge, we have to think about the long term structural implications of those fixed term employment provisions.

[Speaker 2] (28:25 - 28:31)
Because giving FTEs the same benefits as permanent staff, that's a clear positive.

[Speaker 1] (28:31 - 28:32)
It is, but.

[Speaker 2] (28:32 - 28:39)
But that parity, combined with the lack of restrictions on how they can be used, creates this powerful employer incentive.

[Speaker 1] (28:39 - 28:55)
So the question for you to mull over as you process all this is this. Given that an FTE offers full benefit parity, but lets employment just lapse automatically, will this structure ultimately lead to the replacement of stable, permanent jobs with rolling fixed term contracts?

[Speaker 2] (28:56 - 29:05)
If so, the code, while ensuring benefits in the short term, might fundamentally erode the very job security that India's organized labor market has historically been built on.

[Speaker 1] (29:05 - 29:08)
Transforming job stability into a perennial contract negotiation.

[Speaker 2] (29:08 - 29:14)
A profound thought on the future of work. Thank you for joining us on this deep dive into the new Indian labor codes.