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The Corporatization of Indian Labour Law: A Constitutional Contradiction
While the government celebrated the fact that four Labour Codes were implemented in India on November 21, 2025, as path-breaking reforms that integrated 29 disparate labour laws into a neat framework, beneath this simplification narrative lies a deep restructuring of the employer-worker relationship that systematically privileges corporate interests over constitutional guarantees of dignity, livelihood, and social security. The Codes are not about administrative rationalization but about a conscious ideological shift toward looking at labour as a flexible market commodity rather than as a human right entitled to robust protection.
From Enforcement to Facilitation: Diluting Accountability
The most striking transformation appears to be in the enforcement architecture itself. The Occupational Safety, Health and Working Conditions Code, 2020 supplants the traditional labour inspector with an “inspector-cum-facilitator” whose primary mandate is to advise and guide rather than enforce compliance. This trust-based model discards an unannounced inspections and mandates that first-time violators be given opportunities to the remedy violations before prosecution can commence.
This is basic violation of ILO Convention No. 81 on Labour Inspection, which India ratified in 1949. The Convention categorically states that inspectors shall retain the right to make surprise inspections and initiate prosecutions without prior warnings. In effect, subordinating enforcement to facilitation has changed India’s statutory violations from criminal wrongs to administrative inconveniences. Non-compliance now becomes a calculated business risk, more often than not, rather than a serious deterrent for corporations with large legal departments, especially when first-time offences could be compounded through monetary settlements accounting for a fraction of operational costs.
Job Security Eroded Through Numerical Thresholds
The Industrial Relations Code, 2020 increases threshold for mandatory government approval of layoffs, retrenchments, and the closures from the 100 to 300 workers. This apparently technical amendment has far-reaching consequences for job security. The overwhelming majority of the formal sector establishments in India employ between 100 and 299 workers, a population now explicitly denied the benefit of prior-permission requirements.
This numerical shift creates what can be termed a “just-in-time workforce” wherein employers possess unilateral authority to the adjust labour strength based on market conditions with minimal legal friction. More concerningly, Section 77(2) of the Code allows state governments to increase this threshold further through executive notification without parliamentary oversight. This creates perverse incentives for states competing for investment to engage in these regulatory arbitrages and progressively weaken worker protections through administrative fiat rather than democratic deliberation.
The constitutional implications are far-reaching. Articles 39, 41, and 43 of the Constitution direct the State in the direction of securing just and humane conditions of work and a living wage. In leaving the determination of job security thresholds to executive discretion, the Codes undermine the very constitutional vision of labour as a question of social justice rather than economic expediency.
Collective Bargaining Constrained Through Procedural Complexity
The right to collective bargaining is not enumerated but has been judicially recognized as part of the freedom of association under Article 19(1)(c) of the Constitution. This Code substantially restricts this right by heavy procedural prescriptions. Section 62 imposes the notice periods of 14 to 60 days for strike action and all industrial establishments, not just public utilities. Conciliation automatically begins following the receipt of notice, with any strike during conciliation being illegal.
This framework removes them tactical component that would ensure collective action. Furthermore, Section 14, in requiring unions to gain 51% for recognition as sole negotiating agents or to establish multiple 20% unions councils the, creates structural fragmentation. Employers can subtly induce union proliferation as a means of blocking majority formation, thereby neutering collective bargaining without formally proscribing unionization.
Symbolic Recognition Without Substantive Rights
The Codes have been hailed as a pathbreaking development because, for the first time, recognition has been accorded to gig and platform workers. This, however, is essentially symbolic. While the Social Security Code empowers governments to “frame schemes” for gig workers, it does not stipulate timelines or compulsory funding. Crucially, gig workers are not classified as employees, excluding them from retrenchment protections, minimum wage guarantees for waiting time, trade union rights, and access to industrial tribunals.
Aggregators shall contribute up to 5% of payments to workers for social security, though the exact rate is subject to future notification about the mechanism. It institutes a welfare containment zone that offers limited discretionary benefits and denies rights that are enforceable. The differentiation is fundamental: welfare can be taken away administratively, and rights must be enforced judicially.
Constitutional Reckoning Ahead
The Labour Codes represent an internally consistent philosophy, which views labour flexibility as a precursor to economic growth. This growth-centric model is inherently in that tension with the constitutional imperative of social and economic justice enshrined in the Directive Principles. As India strives to become a five-trillion-dollar economy, them pertinent question will always be the: can economic progress premised on the structural dismantling of labour protections ever be constitutionally legitimate? That question will be finally settled not in the boardrooms but in the lived reality of India’s 500 million workers, whose constitutional dignity now hangs precariously in the balance.
