Since the enactment of the new labour codes between 2019 and 2020, India has witnessed a surge in workers' protests across various sectors, notably manufacturing, logistics, and services. These protests, occurring predominantly in industrial hubs such as Maharashtra, Tamil Nadu, and West Bengal during 2022-23, reflect growing discontent among organised and informal workers alike. The protests test the practical efficacy of the Code on Wages, 2019 and the Industrial Relations Code, 2020, which aim to balance employer flexibility with worker security. Their frequency and intensity expose gaps in implementation, particularly regarding collective bargaining rights and social security coverage.

Constitutional and Legal Framework Governing Labour Rights

Article 19(1)(c) of the Constitution guarantees the right to form associations and unions, underpinning workers’ collective action. The Code on Wages, 2019 consolidates four laws related to minimum wages and timely payment, with Sections 6 and 20 mandating minimum wage fixation and penalty for delayed wages. The Industrial Relations Code, 2020 replaces the Industrial Disputes Act, 1947, regulating trade unions, dispute resolution, and strikes; Sections 10-14 specify trade union recognition criteria, while Section 62 restricts strikes in public utility services without prior notice. The Occupational Safety, Health and Working Conditions Code, 2020 addresses workplace safety and health standards. Landmark Supreme Court rulings, such as Bangalore Water Supply v. A. Rajappa (1978), clarify the scope of industrial disputes and protect lawful strikes.

• Article 19(1)(c): Right to form associations/unions
• Code on Wages, 2019: Minimum wages (Section 6), timely payment (Section 20)
• Industrial Relations Code, 2020: Trade union recognition (Sections 10-14), strike regulation (Section 62)
• Occupational Safety Code, 2020: Worker safety standards
• Bangalore Water Supply v. A. Rajappa: Defines industrial dispute and lawful strike

Economic Context: Organised vs Informal Labour and Impact of Reforms

India’s organised labour force constitutes approximately 7% (~30 million) of the total workforce, as per the Periodic Labour Force Survey (PLFS) 2021-22. Over 80% of workers remain in the informal sector, lacking formal contracts or social security. Labour reforms aim to improve the Ease of Doing Business, with India ranked 63rd in 2023 by the World Bank. Post-reform data shows a 12% increase in registered factories in 2022-23 (Ministry of Labour & Employment Annual Report 2023), indicating formalisation gains. Wage growth averaged 6.5% annually between 2019-2023 (Economic Survey 2023). The Union Budget 2023-24 increased labour welfare allocations by 15% to INR 4,500 crore, targeting social security schemes.

• Organised sector: 7% of workforce (PLFS 2021-22)
• Informal sector: >80% workforce (PLFS 2021-22)
• 12% rise in registered factories post-reforms (MoLE Annual Report 2023)
• 6.5% average annual wage growth (2019-2023, Economic Survey)
• Labour welfare budget up 15% to INR 4,500 crore (Union Budget 2023-24)
• India’s Ease of Doing Business rank: 63rd (World Bank 2023)

Key Institutional Players in Labour Reforms and Industrial Relations

The Ministry of Labour and Employment (MoLE) formulates and implements labour laws and reforms, supported by the Labour Bureau, which collects labour market data. The Central Industrial Relations Machinery (CIRM) mediates industrial disputes and facilitates conciliation. Trade unions represent workers’ interests, though their influence varies by region and sector. The International Labour Organization (ILO) provides international labour standards and technical guidance, influencing India’s labour policy reforms.

• MoLE: Policy formulation and enforcement
• Labour Bureau: Labour statistics and analysis
• CIRM: Industrial dispute mediation
• Trade unions: Worker representation and collective bargaining
• ILO: International labour standards and advisory role

Comparative Analysis: India vs Germany on Worker Participation and Industrial Peace

Germany’s co-determination model mandates worker representation on company supervisory boards, institutionalising worker participation in management decisions. This has resulted in lower strike incidences, with only 2.5 days lost per 1,000 workers in 2022, and higher labour productivity, measured at GDP per hour worked of $65 in 2023 (OECD data). In contrast, India experiences frequent strikes due to weaker institutional mechanisms for worker participation and limited collective bargaining rights, especially in the informal sector.

Critical Gaps in Labour Codes and Their Impact on Workers’ Protests

The labour codes inadequately address the informal sector and gig economy workers, who constitute the majority of India’s workforce. Absence of explicit social security and collective bargaining rights for these groups fuels grievances. The Industrial Relations Code restricts strike actions in public utility services but lacks clarity on informal workers’ rights to organise. These gaps undermine the reforms’ inclusiveness and contribute to unrest manifested in protests demanding minimum wages, job security, and social protection.

• Informal and gig workers excluded from collective bargaining provisions
• Social security schemes under Social Security Code yet to be fully implemented
• Ambiguity in strike regulations for informal sector workers
• Resultant protests highlight exclusion and demand for rights

Significance and Way Forward

The surge in workers’ protests reveals the tension between labour market flexibility and worker security embedded in recent reforms. Addressing the exclusion of informal and gig workers from social security and collective bargaining is critical to reducing unrest. Strengthening institutional mechanisms for worker participation, such as mandatory representation and dispute resolution forums, can improve industrial peace. Enhanced implementation of existing provisions and increased budgetary support for welfare schemes will reinforce the reforms’ objectives.

• Expand social security coverage to informal and gig workers under Social Security Code
• Clarify and safeguard rights to organise and strike for informal sector
• Institutionalise worker participation in enterprise governance
• Increase funding and monitoring of labour welfare schemes
• Strengthen dispute resolution through CIRM and state-level bodies

Mains Question

Analyse how the recent surge in workers’ protests in India tests the effectiveness and inclusiveness of the new labour reforms, particularly the Code on Wages, 2019 and the Industrial Relations Code, 2020. Suggest measures to address the challenges faced by informal and gig economy workers within this framework.