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Labour Codes Are not the Villain. Misinterpretation Is.

I remember sitting across from a client who was convinced the new labour codes were designed to strip workers of their rights. “They’re making it easier to fire people,” he said. “Women will be forced into night shifts. Contract workers will not get a dime.” I did not blame him. The headlines were misleading, and the WhatsApp forwards were worse.

But here is the thing: most of what is being said is either half-baked or flat-out wrong.

Let us cut through the noise.

The Myth of Dilution: What the Codes Actually Say

The Ministry’s FAQs are clear. The new labour codes — OSH Code, Wage Code, IR Code are not about weakening protections. They are about cleaning up the mess of 29 overlapping laws that confused everyone, including lawyers.

Here is what is real:

  • Fixed-Term Workers Get Gratuity.
    If you have worked a year, you’re eligible. No more waiting five years. That is a win.
  • Women Can Work Night Shifts — If They Want To.
    Consent is mandatory. So is safe transport and security. It is not exploitation; it is inclusion.
  • Transgender Workers Finally Recognized.
    Separate restrooms, bathing facilities, and dignity at work. About time.
  • Contract Labour Is not Left Out.
    Welfare facilities? Covered. Experience certificates? Mandatory on request.
  • Inspectors Are not Vanishing.
    They are becoming inspector-cum-facilitators. Less harassment, more accountability.

“Better compliance ensures better protection to workers.”
— Ministry of Labour FAQ, OSH Code

The Wage Code: No More Guesswork

Let us talk money. The Wage Code simplifies what counts as wages. No more creative accounting to dodge PF or bonus.

Here’s the breakdown:

  • Basic Pay + DA + Retaining Allowance = Wages.
    If allowances exceed 50%, the excess gets added back. No loopholes.
  • Deductions Capped at 50%.
    Earlier, cooperative deductions could eat up 75%. That’s gone.
  • Floor Wage Is a Floor, Not a Ceiling.
    States cannot reduce existing minimum wages. They can only go up.
  • Transgender Discrimination? Illegal.
    Equal pay for equal work. Period.

Industrial Relations Code: Strikes, Retrenchment, and Reality

This one is the most misunderstood. Let us set the record straight.

  • Strikes Are not Banned.
    Workers just need to give 14 days’ notice. That’s not suppression — it is structure.
  • Retrenchment Needs Permission — If You are Big.
    Establishments with 300+ workers must get prior approval. Smaller ones still need to give notice and compensation.
  • Trade Unions Get More Power, Not Less.
    Negotiating councils, grievance committees, and statutory backing. That’s reinforcement.
  • Fixed-Term Employment Isn’t Exploitation.
    It’s a way to give freshers experience, with full benefits and gratuity after a year.

What You Should Actually Worry About

Not the codes. The implementation.

  • Are states drafting rules that match the intent?
  • Are employers updating contracts and HR policies?
  • Are workers aware of their rights under the new system?

If you’re a compliance officer, HR head, or legal advisor, your job isn’t to panic. It’s to prepare.

Final Thought

The labour codes aren’t perfect. No law ever is. But they’re not the monster under the bed. They’re a long-overdue attempt to bring clarity, consistency, and inclusivity to a system that was drowning in its own paperwork.

So before you forward that viral post claiming “workers can be fired without notice,” ask yourself — have you read the actual code?

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Disclaimer:

The content provided in this blog post is for general informational purposes only and does not constitute legal advice, opinion, or recommendation. While every effort has been made to ensure accuracy as of the date of publication, laws and regulations may change, and interpretations may vary. Readers are advised to consult qualified legal professionals or official government sources before making decisions based on this content. The author and publisher disclaim all liability for any loss, damage, or inconvenience caused as a result of reliance on this information. No warranties, express or implied, are made regarding the completeness, reliability, or suitability of the content. This blog post does not create any client attorney relationship. References to legal provisions are based on publicly available draft rules and notifications and may be subject to revision. This content is intended for informational use only and is not targeted to any specific jurisdiction outside India. Any disputes arising from the use of this content shall be subject to the exclusive jurisdiction of the courts in Maharashtra, India.

 

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