By consolidating 29 central legislations into four labour codes, GoI has ushered in a new era of labour laws. The codes bring in a strategic transformation, providing a framework that aligns India's labour ecosystem with the needs of a modern economy and a new generation of workers, in line with global standards.

Simplification in compliance with single registration and a single licence, replacing multiple overlapping filings, digital filings and global best practices like the inspector-cum-facilitator model, are welcome changes. For example, for a contractor engaging or providing contract labour, an employer can now take a single central licence instead of multiple licences for each project. Similarly, instead of multiple returns under different labour codes, companies can file a single consolidated return covering all four labour codes, enabling predictability and clarity in compliance.

The introduction of the new labour codes comes at a pivotal moment as India positions itself as a manufacturing hub to benefit from globally disrupted supply chains and increase its domestic manufacturing capabilities.

A significant change is the introduction of fixed-term employment and flexibility in daily working hours while retaining overall governance around weekly working hours and overtime payment. For manufacturing enterprises, with fluctuating demand, shifts and seasonal peaks, this will allow employers to optimise shift hours for capacity utilisation without compromising workers' rights.

But to ensure global competitiveness, particularly in comparison with Asian countries, more is needed:

Overtime payment in India is at 200% of wages, compared to 150% in Asian countries, and maximum overtime is limited to 125 hours per quarter. This will continue to give the latter a benefit of agility in responding to demand. Reforms 2.0 should aim to address this.

The impact would also be felt on labour-intensive sectors like textiles and apparel, which need to employ more workers for the same output. Further, a more predictable and transparent environment will help Indian businesses build scale and drive higher capex.

A particularly progressive aspect of reforms is the allowance for women to work night shifts (7 pm to 6 am). But their consent and security must be ensured. Enhanced safety norms, hazard-free environments and establishment of safety committees can foster trust between employers and employees.

These include annual health examinations for workers above 45, the requirement for employers with 500 or more workers to set up a safety committee and specific safety norms for women employees working night shifts, including transportation facilities and the provision of safe, secure, and healthy working conditions.

The codes also strengthen worker protections through streamlined retrenchment provisions, improved dispute resolution via negotiation and mediation and mandatory minimum wages for all workers. Under the new framework, GoI will set a floor wage, which will serve as a benchmark for states to determine their respective minimum wages.

This is a significant improvement over the current regime, where disparities are stark.

Even within NCR, minimum wages for unskilled workers range from ₹18,456 in Delhi to ₹11,274 in Haryana and ₹11,021 in UP. States will need to adopt a consultative approach to harmonise wage structures and eliminate existing inconsistencies.

Gratuity will be calculated on the new definition of wages that includes basic salary plus allowances, unlike the old regime, where gratuity was calculated on basic salary. So, employees will receive gratuity at the rate of 15 days' 'wages' for each completed year of service, provided they have worked for five years before termination of employment.

Overall gratuity payout continues to be limited to ₹20 lakh, unless this ceiling is increased. There is a retrospective impact on gratuity cost for organisations, as any employee leaving will receive gratuity as per the new computation for the entire period of service. Also, fixed-term employees will now be eligible for gratuity even after one year of service. This represents a cultural shift toward a more equitable and transparent labour market.

Centre-state coordination is crucial to implementing the new codes. Uniform rules and aligned shops and establishment laws are essential to avoid the complexity these reforms seek to remove. A formal harmonisation mechanism - with model rules, clear timelines and alignment on working hours, overtime, bonus thresholds, and compliance formats - will help ensure consistency across states.

Lastly, since the new labour codes will raise costs for businesses - especially on gratuity and leave encashment - prospective implementation is essential to preserve certainty. In past reforms like the companies Act and GST, GoI has been consistent, and industry hopes that approach continues.

Just as in cricket, the final runs must be secured to ensure victory. The reforms are a significant step forward. Now, the real challenge lies in their implementation.