New Labour Codes Simplify Compliance and Enhance Employee Protections

The new labour code along with the central government rules has introduced several practical changes that are beneficial for employees. One such change is the removal of distinct rules for each central law. Now, all the regulations are combined into a single act, which simplifies things and makes it easier for employees to look up the relevant law and its rules.

Moksha Bhat, Managing Partner, AP & Partners, told ET Wealth Online that the rules framed under the four labour codes, at a basic level, make it easier for employers to comply. Instead of having to navigate through different sets of rules for each Central Act, employers now have to refer to one set of Rules for each Code.

Three practical aspects that the new labour code and central government rules have made easier for employees

Here's how the new labour code have made some practical changes:

Single registration

Bhat mentions that the new labour codes have simplified compliance requirements by introducing a single registration system under the OSH framework, replacing the multiple registrations that were previously required under the Factories Act, Contract Labour (Regulation and Abolition) Act, Inter-state Migrant Workmen Act, BOCW Act, and other laws.

Electronic filings

Bhat says that both the new labour code and central government rules encourage a move towards electronic filings and electronic maintenance of unified registers, rather than numerous statute?specific paper registers and returns.

Replacement of old fragmented law into a unified framework

Preetha Soman, Partner, JSA Advocates & Solicitors, said to ET Wealth Online that the central government labour code rules put into action the Labour Codes, that collectively replace 29 fragmented central labour laws with a unified and coherent framework.

According to Soman, the unified framework of the new labour code and rules bring in a much-needed procedural clarity to compliance obligations by prescribing the necessary forms, registers, digital filing requirements, and inspection protocols.

Soman says: "The rules essentially help translate broad statutory intent into implementable obligations; something that had been a significant source of anxiety for industry since the Labour Codes were notified but remained unaccompanied by corresponding rules."

From a business perspective, this is as important as the substantive legal changes themselves as employers now have a clearer compliance roadmap rather than having to navigate an uncertain transitional vacuum. The rules also streamline compliance architecture significantly.

Soman explains how this has resulted in practical convenience. For instance, multiple registrations, licences, and returns across legacy laws have been replaced by consolidated registrations and returns, while inspections have shifted to a risk-based, digital model under the new Inspector-cum-Facilitator framework.

For employees, the new framework brings much-needed clarity and expansion of protection, by recognising gratuity entitlement of fixed-term employees who have completed at least one year of service and by providing for a National Social Security Board and dedicated schemes for gig and platform workers under the Social Security Code. It also ensures that employees receive a formal appointment letter, thus ensuring greater transparency and formalisation of employment.

(Join our ETWealth WhatsApp channel for all the latest updates)