Balancing Flexibility And Protection - A Critical Analysis Of India’s Labour Codes In Light Of ILO Standards

Author: LawSphereX

Category: Labour & Employment

Published: 2026-08-23T18:23:31.134666+00:00

Updated: 2026-08-26T17:11:57.001+00:00

BALANCING FLEXIBILITY AND PROTECTION: A

CRITICAL ANALYSIS OF INDIA’S LABOUR CODES IN

LIGHT OF ILO STANDARDS

Sharmishta P. Raj, Symbiosis Law School, Pune

ABSTRACT

The recent overhaul of India’s labour laws through the enactment of four comprehensive labour codes marks a significant shift towards streamlining regulatory compliance and promoting economic flexibility. However, this transformation has sparked considerable debate regarding its impact on worker protection. This research critically examines the balance between flexibility and protection for contract labour under the new labour codes, analysing their compliance with and divergence from International Labour Organisation (ILO) standards. The study explores key provisions under the Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020, and the Occupational Safety, Health, and Working Conditions Code, 2020. It highlights areas where the codes align with ILO principles, such as the recognition of gig workers, maternity benefits, and health and safety measures.

Conversely, it also identifies significant deviations, particularly concerning the right to strike, enforcement gaps, and the absence of uniform social security standards across states. Ultimately, the paper offers recommendations for greater alignment with ILO norms, including stronger enforcement mechanisms, standardized social security measures, and reforms to safeguard collective bargaining rights.

Introduction The Development of India's Labour Laws The evolution of labor laws in India has been greatly influenced by important court rulings, most notably the historical case of Air India Statutory Corporation V. United Labor Union & Ors. 1 The Supreme Court of India ruled in this landmark ruling that contract workers had the same rights as regular employees with regard to pay and working conditions. This ruling emphasized the need to treat contract employees fairly, which is among the objectives of the recently implemented Labour Codes. Furthermore, globalization, changing geopolitical dynamics, and technological advancements have significantly contributed to changing India's economy. In light of all this, the Indian government has implemented new labor laws that aim to drastically alter the way businesses oversee, compensate, and govern their employees.

By combining 29 central labor laws into four comprehensive codes, the government seeks to simplify the current complicated web of labor laws. The four comprehensive codes are-

1. The Code on Wages, 2019

2. The Code on Social Security, 2020

3. The Industrial Relations Code, 2020

4. The Occupational Safety, Health, & Working Conditions Code, 2020

Nonetheless, introducing labor codes in India has sparked a heated debate over how to balance labor market flexibility and worker rights protection. The Bharatiya Mazdoor Sangh (BMS) is one of the key trade unions that has vehemently opposed these laws, calling them antiworker.2 The codes have also faced backlash from various stakeholders, particularly trade unions, who argue that they disproportionately favour employers while undermining workers' rights.

1 Air India Statutory Corp. v. United Labor Union, (1992) 94 Bom. L.R. 238.

2 Labor Codes Passed Are Anti-Worker, Say Trade Unions, The Hindu (Sept. 24, 2020),

https://www.thehindu.com/news/national/labour-codes-anti-worker-say-trade-unions/article32680053.ece.

Enforcement of these regulations is thus still challenging. The Case for Flexibility More labor market flexibility, according to advocates of the labor codes, is necessary to boost growth, draw in foreign capital, and improve competitiveness in an increasingly globalized economy3. For example, the Industrial Relations Code increases the criteria for layoffs and retrenchments and adds provisions for fixed-term employment contracts. 4 These reforms aim to lessen the cost of compliance on employers while facilitating swift company adaptation to shifting market conditions. Employers can react to market needs more quickly when employment arrangements are flexible. This is especially important for sectors of the economy that see abrupt changes in consumer demand or seasonal fluctuations.

Potential Risks of Flexibility Nonetheless, this demand for flexibility has raised serious issues with job security and workers' rights. Trade union representatives have pointed out that using fixed-term contracts may result in employment instability and reduce employees' negotiating leverage. The BMS has noted that the clauses that permit employers to get around established safeguards may lead to a "race to the bottom" regarding working conditions, ultimately detrimental to the employees that the codes are meant to safeguard. These reservations are compounded by the prerequisite for mandatory government approval of layoffs, which was raised from 100 to 300 people. This shift might result in widespread layoffs without sufficient employee protections, jeopardizing job security and perhaps raising unemployment.

The regulations may unintentionally promote a precarious job environment by permitting more lax requirements for companies, which runs counter to the idea of decent labor. 5 3 P. Jha, Oxford India Short Introductions: Labour in Contemporary India, Oxford University Press (2016). 4 S. Jha, Govt Defends Easing Retrenchment Norms, Says It Won't Be 'Hire and Fire', Business Standard (Sept. 22, 2020). 5 K. R. Shyam Sundar, Critiquing the Industrial Relations Code Bill, 2019, 55 Econ. & Pol. Wkly. 45 (2020).

Worker Protection: International Labour Organisation Standards and Labour Codes When the ILO was founded in 1919, India was one of its founding members. The ILO currently has 187 members. The tripartite structure of the ILO is one of its distinctive features. The expansion of the tripartite system in the member nations is guaranteed by ILO membership. Governments and the other two social partners—employers and workers—are connected at every level of the organization. 6 ILO's Decent Work Agenda "Globalization has brought prosperity and inequalities, which are testing the limits of collective social responsibility. "7 The significance of fundamental rights at work, such as the freedom of association, collective bargaining, and the abolition of forced labor, is emphasized by the ILO Decent Work Agenda. India has accepted several important conventions.

Nevertheless, its labor codes have been scrutinized, especially regarding how closely they conform to ILO norms. 6 Ministry of Labour & Employment, Government of India, India & ILO, https://labour. gov. in/india-ilo . 7 International Labour Organization Address by Mr. Juan Somavia, Director General of the International Labour Organization; Proceedings of the 87th Session, International Labour Conference; Geneva, Switzerland. 1 June

1999. Available online: https://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm

Critical Analysis of The Labour Codes The four Labour Codes in India aim to enhance worker protection and align with international labor standards set by the ILO. However, there are areas of both compliance and divergence from these standards.8

1. The Code on Wages, 2019

a. Compliance with ILO Considering it directly affects wage-related perks like gratuities, the unified definition of "wages" under Section 2(y) of the Code on Wages has replaced the inconsistent meanings that existed under prior labor laws. Another noteworthy development is the concept of a national floor wage, introduced under Section 9, which intends to establish a more uniform system of pay regulation nationwide to guarantee that minimum wage commitments are constantly satisfied. In addition, there are now more severe penalties for violating the Wage Code. The Code reinforces employees' rights to fair compensation by establishing a legislative entitlement to 8 WIRC-ICAI, New Labour Code 2020 1 (2020), https://www.wirc-icai.org/images/material/New-Labour-Code- 2020-AK.pdf .

minimum wages and prompt payment. It is thus in conformity to some extent with ILO's Minimum Wage Fixing Convention9, which promotes appropriate minimum wage measures to guarantee workers an adequate standard of life. b. Divergence from ILO The Code on Wages diverges significantly from the ILO norms in several important areas, most notably the implementation gaps. The actual benefits may not reach the intended beneficiaries due to exploitation of loopholes and lack of awareness among workers.

The Code on Wages lacks a robust structure for these tripartite consultations, despite the ILO's Minimum Wage Fixing Convention, requiring that minimum wages be determined through consultations with representative organizations of employers and workers, which might undermine the goal of guaranteeing fair pay by causing minimum salaries to be determined without sufficient involvement from worker representatives. Concerns over the floor wage's sustainability over time are further raised by the need for explicit procedures for evaluating and revising it on a regular basis, which might result in the salary falling short of the ILO's minimum wage requirements, which are meant to give workers and their families an adequate standard of living. 9 International Labour Organization, Convention C131 - Minimum Wage Fixing Convention, 1970 (No. 131), https://www. ilo. org/dyn/normlex/en/f?

p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C131

2. The Code on Social Security, 2020

a. Compliance with ILO The term "gig worker" is introduced by the SS Code, 2020, under Section 2(35). The Code recognizes the unique nature of gig and platform work and that these workers must be covered by social security, a major change from earlier labor laws that did not consider the nontraditional workforce. This action aligns with the ILO's Social Security (Minimum Standards) Convention10, highlighting the necessity of extending social security to all jobs, even those not protected by conventional labor contracts. The Code also contains rules for social security benefits, including provident fund (PF), gratuity, maternity benefits, and compensation for workplace accidents. With this modification, benefits will be calculated in a way that is more inclusive and accurate to the real wages of gig and platform workers. Incorporating maternity benefits for unorganized, gig, and platform

10 International Labour Organization, Social Security (Minimum Standards) Convention, 1952 (No. 102)

workers additionally conforms with the ILO's Maternity Protection Convention,11 fostering the welfare of female workers and illustrating a dedication to broader social protection goals. b. Divergence from ILO The ILO's principle of equity and proportionality in social protection may not be completely upheld since the SS Code fails to stipulate uniform minimum standards across states, which might result in differences in how social security measures are implemented. Additionally, the SS Code gives the Central Government extensive autonomy in establishing and managing social security schemes, which might lead to disproportionate enforcement and implementation across sectors and regions. This flexibility could potentially compromise the predictability and consistency promoted by ILO standards.

3. The Industrial Relations Code, 2020

11 International Labour Organization, Maternity Protection Convention, 2000 (No. 183)

a. Compliance with ILO In accordance with ILO Convention on Freedom of Association12, the IRC, 2020's Section

6 mandates the issuance of appointment letters, formalizing and guaranteeing transparency in

employment contracts. In order to safeguard employees' rights to organize and join unions without fear of ambiguity about their employment status, this clause highlights the significance of precise and specified employment terms. Furthermore, as per Section 14, a single registered trade union present within an establishment should be acknowledged as the sole negotiating union, given that it satisfies the requirements established by the government. When there are several trade unions, the union that has the backing of at least 51% of employees is the only one that may negotiate on behalf of its members. If no union reaches this cut-off, representatives from all unions with at least 20% of the workforce's support will form a negotiating council.

These actions are in accordance with ILO's Right to Organise and Collective Bargaining Convention13, which guarantees that every worker has a say in determining terms and conditions of employment and promoting an equitable and democratic work environment. b. Divergence from ILO The right to strike is limited by restrictions in the IR Code, which calls for prior notification and prohibits strikes when specific circumstances are in effect, such as during conciliation procedures or for 60 days afterward, which is an important deviation from ILO Convention No. 87, which emphasizes the importance of the right to strike as a cornerstone of the freedom of association. In addition, The Code makes hiring and firing procedures simpler, which goes against ILO standards that support stable employment conditions and might jeopardize job security and deter workers from attempting to form a union.

4. The Occupational Safety, Health, and Working Conditions Code, 2020

12 International Labour Organization, Convention C087 - Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)

13 International Labour Organization, Convention C098 - Right to Organise and Collective Bargaining

Convention, 1949 (No. 98)

a. Compliance with ILO The OSH Code under section 6 underscores the need for workplace safety and health. It aligns with ILO's Occupational Safety and Health Convention14, which requires annual health checks and medical facilities for employees. Furthermore, the Code reflects a larger commitment to worker protection by extending these safety and health duties beyond typical factories to organizations with as little as ten workers. Notably, the Code guarantees that all workers get safety and health safeguards by including contract workers under its purview. This inclusiveness aligns with the ILO's mission to protect every worker's welfare, regardless of employment status. b. Divergence from ILO Adequate enforcement is necessary for health and safety regulations to be successful, but this

14 International Labour Organization, Occupational Safety and Health Convention, 1981 (No. 155)

has historically been not easy in India. The ILO's expectations for active enforcement of safety standards may not be met if there is insufficient monitoring to ensure that the rules really provide meaningful protections for workers. Suggestions & Recommendations

1. The Indian government should collaborate more with employers' groups and trade

unions to better align the Labour Codes with ILO standards, which would guarantee that, as advised by the ILO, inclusive discussions would be used to decide how minimum wages and social security benefits would be implemented.

2. Stringent enforcement procedures are necessary for the Occupational Safety, Health,

and Working Conditions Code to function as intended, which entails stepping up monitoring and inspections to make sure that safety rules are followed, especially for contract workers and smaller entities.

3. To guarantee fair protection for all workers, regardless of geographical differences, the

Social Security Code should strive for more consistency in social security requirements between states, which might entail establishing national minimum standards and offering more precise implementation proposals.

4. The Industrial Relations Code should re-evaluate its limitations on the right to strike

to better conform to ILO Convention No. 87. To preserve fair labour standards and collective bargaining power, workers must have unhindered recourse to strike action as a means of protest.

5. It is necessary to institutionalize the regular reviews and revisions of the Labour

Codes to resolve any gaps that may arise due to the dynamic nature of society and its needs. Conclusion India's labour codes are a major reform of the labour laws of the country, with the goal of streamlining and updating rules to improve competitiveness and economic flexibility. There are significant discrepancies even if these changes mostly accord with ILO requirements, especially in areas like occupational health and social security for gig workers.

Closing these gaps is essential to striking a balance between both of the goals of protection and flexibility. India can more effectively protect worker rights in an evolving economic landscape and better match its labour laws with international norms by enhancing enforcement mechanisms, increasing stakeholder input, and modifying restrictive measures.

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