The landscape of Indian industrial relations has undergone its most significant overhaul in decades. On November 21, 2025, the Union Government officially notified four major Labour Codes: the Code on Wages, the Occupational Safety, Health and Working Conditions (OSH) Code, the Social Security Code, and the Industrial Relations (IR) Code.

While corporate circles have largely welcomed these changes as essential "reforms," trade unions view them as a fundamental shift in how the State mediates the relationship between capital and labour. To help our readers in the automotive sector, from Tier-1 suppliers to assembly plant managers, understand what has changed, Autocar Professional's Shahkar Abidi spoke with Advocate Maitreyi Krishnan of the All India Central Council of Trade Unions (AICCTU). Krishnan warns that these codes represent an "abdication by the State" of its responsibility to protect the vulnerable

According to Krishnan, the new framework essentially creates a "dictatorship of the private employer," pushing millions of workers outside the protection of the law. Here is a breakdown of the "Earlier vs. Now" in simple terms:

1. Hiring, Firing, and Plant Closures (The IR Code)
For mid-sized automotive units, the rules regarding business agility versus job security have shifted dramatically.

Earlier: Establishments with 100 or more workers needed prior government permission to lay off staff or close down operations.

Now: That limit has been tripled to 300 workers.

Simplified Context: If you run a component plant with 250 employees, you can now retrench (cut jobs) or shut down without any prior government approval or public scrutiny.

2. Employee Handbooks/Service Rules (Standing Orders)
These are the rules that govern daily conduct, shift timings, and disciplinary actions on the shop floor.

Earlier: Any unit with 100 or more workers had to have "Certified Standing Orders"—rules vetted by authorities to ensure they were fair to workers.

Now: Only establishments with 300 or more workers are required to have these certified rules.

Krishnan’s Take: For units with under 300 staff, service conditions are now left entirely to "employer discretion," which can lead to arbitrary or discriminatory practices.

3. The Contract Labour System
The auto industry relies heavily on contract staffing for non-core tasks. The new codes change the definition of what is "allowable."

Earlier: The law applied to units with 20 or more contract workers, and use of contract labor in "core" production activities was strictly regulated.

Now: The threshold for the law to apply is raised to 50 workers. Furthermore, the definition of "core activity" now specifically excludes sanitation, loading/unloading, canteen services, and maintenance.

Simplified Context: These essential factory tasks are now legally "non-core," which Krishnan argues institutionalizes an exploitative system where marginalized workers are denied the benefits of permanent employment.

 4. Women on the Shop Floor
While the codes are marketed as progressive, Krishnan highlights concerns regarding wage parity and safety.

Earlier: Night shifts for women were generally prohibited under the Factories Act to ensure safety.

Now: Women can work night shifts, provided they "consent".

The Concern: Krishnan argues that in a workplace with a high power imbalance, this "consent" is often illusory and exposes women to unsafe conditions. Additionally, a new, narrower definition of "wages" (excluding various allowances) may lead to lower maternity benefit payouts and "indirect" pay discrimination.

5. Trade Union Autonomy and the "Deregistration Weapon"
In large-scale automotive manufacturing, the relationship between management and registered trade unions is a cornerstone of the shop floor. The new code changes how these unions are regulated.

Earlier: Under the Trade Unions Act, 1926, union office-bearers enjoyed statutory immunity from civil and criminal prosecution for actions taken to achieve legitimate union goals. While registration could be cancelled, the grounds were relatively narrow.

Now: The Industrial Relations Code gives the Registrar of Trade Unions significantly broader discretion to cancel a union's registration based simply on "information received" regarding any violation of the Code.

The Impact for Auto Plants: Once a union’s registration is cancelled, its members lose all legal immunity from prosecution. Krishnan warns that this creates a "climate of fear," where the threat of deregistration can be used to intimidate workers and prevent them from challenging management decisions.

6. The "Wage Redefinition" and Social Security Payouts
The way "wages" are calculated has been completely overhauled, affecting everything from maternity leave to provident fund liabilities.

Earlier: Laws like the Equal Remuneration Act and the Maternity Benefit Act used a broader understanding of what constituted a worker's pay to ensure they received fair compensation.

Now: The Code on Wages redefines "wages" to exclude various allowances. This allows employers to "split" a worker's salary into many different heads to keep the official "wage" low.

The "Hidden" Change: Because benefits like maternity payouts are calculated based on this narrow definition of "wages," women workers in the industry will likely see a reduction in their actual cash benefits. Krishnan argues this effectively legitimises indirect wage discrimination, as employers can structure pay scales to avoid their full social security liabilities.