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25 Dec 2025 : New labour codes, the threats to informal workers

 Editorial 1: New labour codes, the threats to informal workers

Context

Unorganised workers have largely been excluded from consideration across all the labour codes, except the one dealing with social security.

 

Introduction

Trade unions and workers’ organisations have consistently opposed the labour codes of 2019 and 2020. The four codes -covering industrial relations, wages, social security, and occupational health and safety- were enacted without tripartite consultation among workers, employers, and the government at the Indian Labour Conference (ILC). With their implementation now underway, many hard-won labour rights across sectors are being undermined or dismantled.

  • While the effects on organised sector workers are being actively discussed, debated, and documented,
  • the labour codes also pose serious risks to unorganised sector workers,
  • who constitute over 90% of India’s workforce and contribute nearly 65% of the GDP,
  • As Tamil Nadu considers framing rules under the Social Security Code,
  • it is crucial to foreground the grave threats these Codes pose specifically to unorganised workers.

 

Myth of Universalisation and Consolidation

  • The Union Government presents the labour codes as a means to consolidate existing laws and universalise social security, but these claims are misleading.
  • Unorganised workers are largely excluded from all codes except the one related to social security.
  • In the name of consolidation, several existing protections available under sector-specific laws have been weakened or repealed.
  • Laws such as the Building and Other Construction Workers (BOCW) Act, 1996, which provided targeted safeguards, have been undermined, leaving informal workers more vulnerable.

 

Erosion of Occupational Safety and Health Protections

  • Nearly 180 safety rules under the BOCW Act ensuring protection at construction sites are absent from the new Occupational Safety, Health and Working Conditions (OSHWC) Code.
  • This dilution is especially dangerous given the hazardous nature of construction work and the high incidence of workplace deaths in the sector.
  • The shift from physical inspections to a web-based system weakens enforcement of workplace safety and minimum wage laws, violating international labour standards.
  • Occupational diseases common among informal workers—such as silicosis in construction, cancer from pesticide exposure in agriculture, and chronic ailments among salt workers—are ignored under the OSHWC Code.
  • The absence of a comprehensive occupational health policy contradicts global norms that require identification, treatment, and rehabilitation of work-related illnesses.
  • With sector-specific laws repealed and ESI coverage unavailable, unorganised workers are left with no state-backed mechanism to address their health and safety concerns.

 

Unequal Social Security Framework

  • Under the Social Security (SS) Code, organised workers are provided with clearly defined social security benefits,
  • while informal workers are relegated to vaguely worded “welfare schemes” with no concrete guarantees.
  • The abolition of sector-specific cesses following GST reforms—without any effective replacement—has dismantled a key funding source for workers in beedi, salt, mining, and other informal sectors.
  • As a result, there are no assured funds, either through employer contributions or Union government support, dedicated to the welfare of informal workers.

 

Centralisation and Threat to State-Level Welfare Boards

  • The SS Code envisages a single welfare board for all unorganised workers, ignoring the diverse sectors in which informal labour is employed, except construction and gig work.
  • Even in construction, the centralised e-Shram registration system raises concerns about the Centre gaining control over accumulated welfare funds, estimated at around ₹1 lakh crore.
  • In Tamil Nadu, the Code threatens the dissolution of 39 existing sector-specific welfare boards that currently provide targeted protections.
  • There are no saving clauses to preserve these State-level boards or their benefits, such as old-age pensions, maternity support, and educational assistance for workers’ children.
  • This serious erosion of established welfare mechanisms, repeatedly flagged by trade unions and worker movements, explains why Tamil Nadu remains cautious and continues to delay framing rules under the SS Code.

 

Threat to State-Level Welfare Architecture

  • Some States, including Andhra Pradesh, have shut down their welfare boards following the introduction of the labour Codes.
  • Tamil Nadu, by contrast, has a robust workers’ welfare framework under the Tamil Nadu Manual Workers Act, 1982,
  • an architecture painstakingly built through sustained union struggles and worker advocacy.
  • The State is estimated to have around three crore informal workers,
  • with nearly two crore workers registered across its sector-specific welfare boards.

 

Conclusion

To safeguard the welfare of informal workers, the State government must protect its welfare boards and State-level labour laws at all costs. Tamil Nadu, following the example of Kerala, should refrain from implementing the labour codes or notifying rules under them. Instead, it must insist on saving clauses that preserve and protect the existing State-level welfare architecture built for workers over decades.