Welcome back to the third edition of HR Weekly Updates.
The week of 15th–21st
November 2025 will be remembered as a watershed moment for Indian HR. With
the historic implementation of the Four Labour Codes, the landscape of
compliance, benefits, and gig work has fundamentally changed overnight.
Here are the key updates you need to know.
1. Historic Shift: India Implements Four Labour Codes
On 21st November 2025,
the Ministry of Labour & Employment officially implemented the Four
Labour Codes, replacing 29 existing labour laws. This massive consolidation
aims to simplify compliance while expanding social security.
Key Points:
- Consolidation: The Code on Wages, Industrial Relations Code,
Social Security Code, and OSH Code are now in effect.
- Universal Appointment Letters: It is now mandatory to issue formal
appointment letters to all employees, promoting workforce
formalization.
- Unified Compliance: Multiple registrations and returns have been
replaced with a single licensing and return mechanism.
- HR takeaway: Immediate review of all employment contracts and
standing orders is necessary to align with the new codes.
Source: Ministry of Labour & Employment Notification /
The Economic Times
HR Action Plan:
- Wage Structure Audit: Review current salary breakups. Ensure
"Basic Pay" constitutes at least 50% of the CTC (Cost to
Company) to comply with the new definition of wages.
- Contract Updates: Revise all employment contract templates to
include the statutory clauses required by the OSH Code.
- Policy Harmonization: Merge separate policies for Leave, Gratuity,
and Maternity into a single "Statutory Benefits Policy" manual
as per the new codes.
2. Gig Economy: First-Ever Formal Social Security Net
For the first time in
India’s history, gig and platform workers (e.g., delivery partners,
ride-hailing drivers) are legally recognized and covered under social security.
Key Points:
- Legal Definition: "Gig worker" and "Platform
worker" are now legally defined terms.
- Aggregator Contribution: Platform aggregators must contribute 1–2%
of their annual turnover (capped at 5% of amount paid to workers)
towards a social security fund.
- Benefits: This fund will support health, maternity, and
disability benefits for gig workers.
- HR takeaway: Organizations utilizing gig talent must budget for
this new statutory liability and update vendor contracts immediately.
Source: Business Standard – Gig workers get formal safety
net
HR Action Plan:
- Vendor Review: Identify all third-party vendors (logistics,
delivery, temporary staffing) who fall under the "Aggregator"
definition.
- Cost Impact Analysis: If your company operates a platform model,
calculate the financial impact of the 1-2% turnover levy immediately.
- Contract Addendums: issue contract addendums to gig partners
clarifying their eligibility for these new social security benefits.
3. Corporate Watch: Pune Labour Commissioner Summons TCS
In a major development
regarding workforce rights, the Pune Labour Commissioner’s office summoned Tata
Consultancy Services (TCS) on 18th November 2025.
Key Points:
- The Issue: The summons followed complaints filed by the
Nascent Information Technology Employees Senate (NITES) alleging
"unlawful terminations" and layoffs without due process.
- NITES Action: The union claimed it assisted employees in
filing formal complaints regarding abrupt terminations and denial of
statutory dues.
- HR takeaway: Even in a performance-driven culture, documentation
and due process in separations are non-negotiable to avoid legal and
reputational risks.
Source: Live Mint / Times of India – Pune Labour
Commissioner summons TCS.
4. Policy Update: Gratuity Eligibility Reduced to 1 Year for Fixed-Term Employees
Under the newly
implemented Industrial Relations Code, the rules for Fixed-Term Employment
(FTE) have been significantly relaxed to encourage direct hiring over
contract labour.
Key Points:
- Gratuity Change: Fixed-term employees are now eligible for
gratuity if they render service for 1 year, reducing the previous
5-year threshold.
- Parity: FTEs are entitled to the same hours of work, wages,
allowances, and statutory benefits as permanent workers doing the same
work.
- HR takeaway: This makes FTE a more attractive model for
project-based hiring but increases the long-term cost of short-term hires.
Source: The Economic Times – Fixed-term employees to get
gratuity after 1 year.
HR Action Plan:
- Budget Re-forecasting: Add a 4.81% (Gratuity component) provision to
the budget for all Fixed-Term Contracts exceeding 12 months.
- Offer Letter Revision: Update FTE offer letters to explicitly
mention Gratuity eligibility after one year of continuous service.
- Identify Risks: Review current FTEs approaching the 1-year
mark; ensure their tenure extensions are based on business need, not just
to avoid gratuity liability (which creates legal risk).
5. Compliance Corner: EPFO 'Amnesty' & Section 14B Amendment
To support the Employees'
Enrolment Scheme 2025 (valid from Nov 1, 2025, to April 30, 2026), the
government has amended Section 14B and 14AC of the EPF Act via notification.
Key Clarifications:
- Damages Capped: Employers who voluntarily declare previously
unenrolled employees (joining between July 2017 and Oct 2025) will face a
maximum penalty (damages) of only ₹100.
- Employee Share Waiver: The employee’s share of contribution is waived
for the past period if it was not deducted from wages earlier.
- Action Required: Employers must use this window to regularize
any "missed" employees to avoid heavy penalties later.
- HR takeaway: This is a golden opportunity to clean up past
compliance gaps with minimal financial impact.
Source: EPFO Notification S.O. 4920(E) & 4921(E) dated
19/11/2025.
HR Action Plan:
- Gap Analysis: Run a VLOOKUP between your "Total
Headcount Register" and "PF Monthly Challan Data" for the
last 7 years to find missing names.
- Contractor Audit: Ask your manpower contractors to submit a
"Nil Declaration" or "Correction Report" under this
scheme to protect principal employer liability.
- File Immediately: Initiate the declaration process on the
unified portal before the year-end rush begins.
The Week in One Line
This week marked the end
of an era and the start of a new one: with the Labour Codes live, HR is no
longer just managing people, but managing a fully formalized, legally
compliant, and social-security-backed workforce ecosystem.
What is your immediate
priority with the new Labour Codes? Share your thoughts in the comments!
By Mit HR Professional
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