The Long Road to Reform: The Historic Journey of India’s Labour Codes (2002–2025)

For over 70 years, India's labour landscape was governed by a complex web of 29 Central laws and over 100 State laws. Many of these, like the Workmen's Compensation Act (1923) or the Factories Act (1948), were drafted for a different era.

On November 21, 2025, this era officially ended. But this change didn't happen overnight. It was a 23-year legislative marathon. Here is the step-by-step history of how India’s labour laws were consolidated into four unified Codes.

Phase 1: The Genesis (2002)

The seed for reform was planted not in 2019, but in 2002.

• The Event: The 2nd National Commission on Labour, submitted a landmark report to the Government of India.

• The Recommendation: They argued that existing labour laws were archaic, contradictory, and difficult to enforce. They suggested consolidating these laws into broader "groups" (Wages, Safety, Welfare, Relations) to improve the Ease of Doing Business while ensuring worker safety.

• The Outcome: For nearly 15 years, this report remained in the discussion phase, with various governments attempting piecemeal reforms but failing to pass a comprehensive bill.

Phase 2: The Legislative Action (2019 – 2020)

The real legislative momentum began in 2019 when the Ministry of Labour & Employment decided to push for total codification.

Step 1: The First Pillar (August 2019)

• Bill Introduced: The Code on Wages Bill, 2019 was introduced in Lok Sabha.

• Passing: It passed in Lok Sabha on July 30, 2019, and Rajya Sabha on August 2, 2019.

• Presidential Assent: On August 8, 2019, the President of India gave his assent.

• Result: The first Code became Law, repealing 4 historic Acts (Minimum Wages Act, Payment of Wages Act, Bonus Act, Equal Remuneration Act).

Step 2: The Remaining Three (September 2020)

In the midst of the global pandemic, the Government expedited the remaining reforms to boost industrial growth.

• Bills Introduced: Three bills (Social Security, Industrial Relations, and OSH) were introduced in Lok Sabha on September 19, 2020.

• Parliamentary Approval: In a historic session, both houses passed the bills by September 23, 2020.

• Presidential Assent: On September 28, 2020, the President signed them into law.

• Result: The legislative framework was now complete. 29 Acts were legally subsumed into 4 Codes.

Phase 3: The Implementation Struggle (2021 – 2024)

If the laws were passed in 2020, why did enforcement wait until 2025?

The "Concurrent List" Challenge

In the Indian Constitution, "Labour" is on the Concurrent List. This means:

• The Central Government makes the Code (The Act).

• State Governments must frame the Rules (The implementation procedures).

For reforms to work, both Centre and States needed to be aligned. Between 2021 and 2024, the Centre waited for major industrial states (Maharashtra, Gujarat, Tamil Nadu, Karnataka) to publish their draft rules to ensure a uniform business environment.

Phase 4: The Final Enforcement (November 2025)

After years of drafts and stakeholder consultations, the final trigger was pulled.

• Notification: The Ministry of Labour & Employment issued the official Gazette Notification announcing the "Appointed Date."

• Enforcement Date: November 21, 2025.

On this day, the transition was absolute. The old "Inspector Raj" mechanism was legally replaced by a "Facilitator-based" digital compliance system.

Summary: The 4 New Pillars

The 29 Laws have been reorganized into these four functional pillars.

The New Code	Focus Area	Key Laws Repealed
1. Code on Wages, 2019	Salary, Bonus, Deductions	Minimum Wages Act, Payment of Wages Act
2. Social Security Code, 2020	PF, ESI, Gratuity, Maternity	EPF Act, ESI Act, Payment of Gratuity Act
3. IR Code, 2020	Unions, Disputes, Layoffs	Industrial Disputes Act, Trade Unions Act
4. OSH Code, 2020	Safety, Licenses, Working Hours	Factories Act, Contract Labour Act

Read on for our detailed deep-dives into each of these codes to understand exactly what has changed for your organization.

Summarized by MIT - HR Professional