How might the new labour codes impact the relationship between employers and workers in India?

The new labour codes in India—covering wages, social security, industrial relations, and occupational safety—aim to consolidate and simplify the country’s complex labour laws. These changes are expected to influence not just the legal framework but also the everyday relationship and balance of power between employers and workers.

• Greater Formalization: By encouraging formal employment through universal social security and clear wage definitions, the codes may reduce informal practices and bring more transparency to employer-worker interactions.
• Streamlined Compliance: Simplified laws can make it easier for employers to comply, potentially reducing friction with workers over legal ambiguities. However, automation of compliance might also reduce face-to-face engagement between management and workers.
• Collective Bargaining and Strikes: The Industrial Relations Code introduces stricter norms for strikes and union formation, which could weaken workers’ bargaining power and make it harder for them to organize collectively.
• Contractual and Fixed-Term Employment: The codes allow easier hiring and firing of fixed-term employees, possibly increasing job insecurity for workers and shifting the power balance towards employers.
• Grievance Redressal: Provisions for grievance redressal committees may provide workers with more structured avenues to resolve disputes, potentially improving trust if implemented well.
• Social Security Expansion: Including gig and platform workers in social security could improve workers’ sense of security and well-being, impacting their relationship with employers positively.
• Occupational Safety: Clearer safety norms may encourage better workplace conditions, but enforcement will be key to changing daily practices.
• Power Dynamics: Easier retrenchment and closure norms for smaller firms may tilt the power further towards employers, possibly making workers more cautious in raising concerns.