The Morning Brief India’s Labour Law Reboot
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Nov 28, 2025 Purvi Jothani, an employment law expert and founder of LawQuest, joins Vandana Gurnani, Secretary of the Ministry of Labour and Employment, to discuss India's major labour law reforms. They explore the consolidation of 29 laws into four, the impact of the new 50% basic pay rule, and parity for fixed-term employees with permanent staff. Jothani highlights recognition for gig workers, while Gurnani addresses compliance challenges and the government's push for universal social security. This insightful conversation provides guidance for both employers and workers navigating the new landscape.
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Consolidation Brings Clarity And New Complexity
- The 29 disparate labour laws are now consolidated into four codes, clarifying previously conflicting definitions.
- This consolidation should simplify compliance but state-level rules will still create a patchwork across India.
50% Basic Pay Raises Benefit Bases
- The new codes tighten the definition of basic pay by requiring basic wages to be at least 50% of total compensation.
- This raises wages used to calculate benefits like gratuity and maternity pay, increasing social-security-linked payouts.
Higher Retrenchment Threshold Aims To Formalise
- The retrenchment approval threshold rises from 100 to 300 employees, aiming to reduce reliance on contractors.
- The change is pitched to promote formalisation but also gives firms more flexibility to scale down without government permission below 300.