India's new Labour Codes: Which laws remain outside the consolidation

Labour and employment fall in the Concurrent List of the Seventh Schedule to the Constitution (Entries 22 to 24 of List III), so both Parliament and the State legislatures can legislate on them. Historically, both have done so, resulting in several laws on similar subject matters. By Central government estimates on various occasions, there were around 44 central labour laws, and the States have enacted their own set of laws on shops and establishments, holidays, welfare funds and similar matters.

Calls to rationalise India's labour and employment regime date back to the recommendations of the second National Commission on Labour in 2002. Accordingly, after nearly two decades since the recommendations, the Parliament finally enacted four codes in the years 2019 & 2020, consolidating 29 central laws. The enactments, namely: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 (the “OSH Code”) (collectively the “Codes”), were finally notified on 21 November 2025. Even by the Central government count, there are 15 Central legislations that remain outside of the consolidation exercise. Then we have State-level laws that are untouched by the consolidation exercise.

Labour laws can be grouped by who enacts them and who enforces them:

Most Central labour laws sit in categories B and C. Even the EPF and ESI Acts, though administered through central bodies, operated through an “appropriate government” mechanism, and the States were involved in implementation. Category A is therefore small and includes sector-specific welfare laws like the Mica Mines Labour Welfare Fund Act, 1946 and the Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act, 1976.

The Codes mainly consolidate laws in category B and, to some extent, those in category C. Category D laws, since enacted by States, cannot be repealed by the central government.  As the laws that are consolidated were enforced by central and state governments, the Codes also have an enabling provision in the form of “appropriate government” to ensure both central and state governments have the power to enforce them, i.e., the Centre for establishments in the central sphere, such as railways, mines, major ports, telecom, banking and insurance companies and central public sector undertakings, and the State for all others. Most of the definitions across the Codes are uniform, but rules, authorities and some thresholds may differ from State to State on account of rules made by the respective state governments. Where the laws in Category D overlap with the Codes, Article 254 of the Constitution on repugnancy becomes relevant.

Apprentices Act, 1961: The enactment continues to govern the contract of apprenticeship, stipend and designated trades. The Codes generally keep apprentices outside the definitions of worker and employee, so an establishment that engages apprentices attracts two sets of obligations: one under the Apprentices Act and second under the general labour laws.

Boilers Act, 2025: Boiler safety remains outside the Codes. The OSH Code replaced the Factories Act, but boilers are regulated by a separate statute, which is now the Boilers Act, 2025, enacted recently by repealing the Boilers Act, 1923. It covers the registration, inspection and certification of boilers and boiler components during manufacture, erection and use, and applies to boilers belonging to the Central and State governments as well, subject to a few exclusions such as railway locomotive boilers and boilers under the control of the armed forces. The 2025 Act decriminalises certain offences and adds provisions for adjudication and appeal.

Child and Adolescent Labour (Prohibition and Regulation) Act, 1986: This Act prohibits the employment of children below 14 years in any occupation or process, with limited exceptions such as help in a family enterprise, and bars adolescents aged between 14 to 18 years from hazardous occupations. Since the 2016 amendment, an employer faces imprisonment of six months to two years, or a fine of INR 20,000 to INR 50,000, or both.

Other residual enactments: These include certain colonial-era laws and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which wholly sits outside the Codes.

Shops and Establishments Acts: These cover registration, working hours, weekly offs, leave and closing hours, and have been the main source of working-time rules for offices, shops, commercial, and IT/ITES establishments. The OSH Code also deals with registration, hours, leave and welfare, so the two overlap. Until rules/amendments settle the position, employers should offer employees the most beneficial conditions among the overlapping requirements. To some extent, this overlap has now been resolved by certain States, in the following ways:

Exemptions in Karnataka, Maharashtra, Haryana, and Puducherry are tied to OSH Code registration, so they depend on the establishment’s size and on the registration actually being in place.

Outside the specific exemptions/repeals, the State Shops Acts continue in full, and even where registration is dispensed with, an employer must still comply with the rest of the provisions.

Welfare Fund Acts: States require periodic contributions from employers, and in many States from employees. Rates, frequency and the treatment of unclaimed amounts differ between States, and this obligation is unaffected by the Codes.

Professional tax: States levy tax on professions, trades, callings and employments under Article 276 of the Constitution, capped at INR 2,500 per person per annum. Employers’ obligations include deduction, remittance and filing of returns.

The Codes simplify the compliances flowing from the central statute book but do not create a single national regime. A set of general central labour laws, viz., the Apprentices Act, the Boilers Act, 2025 and the child and bonded labour statutes, continues to operate, while the State laws apply to holidays, welfare funds and professional tax. The State Shops and Establishments Acts, which considerably overlap with the OSH Code, are expected to be phased out over time. A periodic, location-wise review should be part of any post-Codes compliance programme for a reasonable period, as States undertake review of overlapping legislation from time to time.

About the authors: Noorul Hassan is an Executive Partner, Kumar Panda is an Associate Partner and Prachi Sharma is an Associate at Lakshmikumaran & Sridharan attorneys.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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