New Labour Codes: Minister Sivankutty to meet trade unions for discussions, what’s at stake?

The Kerala government has begun fresh consultations on the Centre’s newly notified Labour Codes, with state Labour Minister V Sivankutty convening a meeting of central trade union representatives on November 27. The online meeting, scheduled at noon, will examine Kerala’s concerns and areas of disagreement regarding the Codes, according to an official statement issued on Monday.

The minister will also engage with labour ministers from other states to build consensus on key provisions. A proposal to hold a labour conclave in Thiruvananthapuram in the third week of December is under consideration.

At a meeting convened earlier in the day by the Union Labour Secretary, Kerala reiterated its reservations over several aspects of the Codes. State Labour Special Secretary Shanavas S informed the Centre that detailed objections would be submitted in writing.

The union government recently notified all four Labour Codes, pending since 2020, marking the biggest overhaul of India’s labour regulation in decades through the merger of 29 laws into four simplified codes. The Codes promise universal social security for gig workers, statutory minimum wages, written appointment letters for all employees, and cleaner compliance systems.

Sivankutty has assured that the state will not adopt an anti-worker approach while implementing the Codes.

What it means for employees and employers

Changes in take-home pay
The new uniform definition of wages caps allowances at 50 per cent of total compensation. This will increase basic pay, raising contributions to provident fund and gratuity. While take-home pay may fall slightly, retirement benefits will grow.

Experts say this could also raise compliance costs for employers, many of whom split compensation into multiple allowances to reduce tax and statutory contributions.

A senior official told PTI that the new wage definition came into effect immediately after the notification of the Code on Wages 2019 on November 21.

Impact on employers
Employers will now have to restructure cost-to-company packages to meet the 50 per cent basic-pay requirement. This will increase their contributions to PF and gratuity.

The 50 per cent basic-wage mandate will now apply to the calculation of social security benefits.

Officials noted that the threshold for contribution to the Employees’ Pension Scheme remains ₹15,000 per month, with 8.33 per cent of this amount continuing to flow into the pension fund. Any remaining employer contribution will go to the Employees’ Provident Fund, increasing employees’ EPF balances.

Job security
Fixed-term employees will gain entitlement to the same statutory benefits as permanent staff, including gratuity if they meet tenure conditions.

Clearer dispute-resolution mechanisms are expected to strengthen job protection.

For employers, the threshold for layoffs and closures has been raised to 300 workers, giving firms more flexibility in workforce planning.

Working hours and safety
The Codes introduce a standardised 48-hour weekly work limit, with clearer rules on overtime and leave. The new safety and welfare provisions are designed to improve workplace conditions.

Social security expansion
The Codes formally recognise gig, platform, and unorganised workers, extending access to EPF, ESI, maternity benefits, and injury compensation.

Digital registration is expected to simplify benefit claims. Platforms may need to contribute to dedicated social security funds for gig workers.

Compliance
For workers, simplified rules make rights easier to enforce. Employers will benefit from fewer registers and simplified returns.

Labour authorities noted that the Employees’ Provident Fund Organisation has repeatedly warned companies to maintain the 50 per cent basic-pay norm when calculating contributions.

Mandatory health check-ups
One of the most consequential changes is the requirement for annual health check-ups for all employees aged 40 and above, which will add a new layer of workplace welfare oversight.

Concerns 
The Labour Codes have drawn sharp criticism from labour groups and farmer bodies. The Samyukt Kisan Morcha, which led the 2020 to 21 farmers’ protests, said claims that the Codes ensure minimum wages and social security for all workers are unsubstantiated, arguing that more than 90 per cent of India’s workforce lies in the unorganised sector and remains outside the Codes’ practical protection.

The SKM said the Codes dilute labour rights by tightening restrictions on forming trade unions and imposing stringent strike conditions, including a mandatory 60 day notice period and a ban on protests during conciliation. It also criticised provisions that it believes allow 12-hour workdays in violation of the eight-hour norm, describing this as a rollback of constitutional guarantees of humane working conditions.

The umbrella farmers’ body said large sections of workers have been excluded from meaningful safeguards. It pointed to the Industrial Relations Code, which now exempts units with fewer than 300 workers from seeking prior government permission for lay-offs, retrenchment and closures, up from the earlier threshold of 100 workers. Provisions under the Occupational Safety, Health and Working Conditions Code also exempt units with fewer than 20 or 40 workers, depending on power use, from several requirements, including factory registration.

Citing the Annual Survey of Industries 2021 to 22, the SKM noted that nearly 80 per cent of factories employ fewer than 100 people, making the exemptions significant in scale.

The SKM said the absence of an enforcement mechanism for minimum wages in the unorganised sector undermines worker protection and reiterated its demand for raising the national minimum wage to ₹26,000. It also accused the union government of sidelining trade unions by not convening the Indian Labour Conference since 2015.

The organisation called on workers, agricultural labourers and the public to participate in nationwide protests planned for November 26.