INTRODUCTION

India’s four Labour Codes mark the extensive reform and compilation of the nation’s labour laws in 70 years. The Codes consolidate 29 Central Labour Laws into four primary codes: 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 enactment of the Codes in Parliament is incomplete pending notification and adoption by the Central Government. States have variously compiled or published draft Codes. As of now, the BRSR transformed what was previously a voluntary, managementlevel mechanism to an obligatory and reputational framework. Top 1,000 entities listed by the SEBI in 2022-23 must comply with the BRSR, which is aligned to the NGRBC.1 BRSR Guidelines include nine pillars of accountability in a corporate context: governance, product responsibility, employee accountability and fulfilment, the promotion of the welfare of concerned parties, the justice and promotion of detractors’ rights, the promotion of the environment and the legislative process. It incorporates accountability themes on inclusiveness, growth and governance.2

The statutory elements of the Labour Codes impact the BRSR’s disclosure obligations within the dynamic compliance framework. This means the BRSR’s disclosure requisites, in addition to the other laws, do impose compliance obligations. Connecting the Labour Code’s compliance requisites of definitional wage, social security (including the gig and platform economy), occupational safety, grievance, and industrial relations will shape the kind of disclosure that will be expected under BRSR’s and Section B, specifically, Principles 3, 5, and 9 of the Management and Process Disclosures, respectively.

In this context, this article breaks down the Labour Codes in detail, beyond the sub-series, and argues that the Labour Codes once implemented will require the BRSR to alter the compliance and sustainability disclosure obligations that will be in force.

PART I: THE FOUR NEW LABOUR CODES — AN OVERVIEW

1.1 The Legislative Architecture

The Labour Codes consolidate 29 central labour laws into four thematic statutes. The key structural changes relevant to BRSR disclosures are:

Labour Code

Laws Consolidated

Primary BRSR Relevance

Code on

Wages 2019

Minimum Wages Act, Payment

of Wages Act, Payment of Bonus

Act, Equal Remuneration Act

P5 (Wages/Gender Pay), P8

(Inclusive Growth), BRSR Sec A

— Employee/Worker data

Industrial

Relations

Code 2020

Industrial Disputes Act,

Trade Unions Act, Industrial

Employment (Standing Orders)

Act

P3 (Employee Wellbeing), P5

(Workers’ Rights), BRSR Sec A —

grievance data

Code on

Social

Security 2020

EPF Act, ESI Act, Maternity

Benefit Act, Gratuity Act,

Building & Construction Workers

Act

P3 (Social Security coverage),

P5 (Benefits), BRSR Sec A —

Benefits disclosures

OSH Code

2020

Factories Act, Mines Act,

Contract Labour Act, Building

Workers Act (+ others)

P3 (Safety), P5 (Safe

Conditions), BRSR Sec A

— Safety KPIs, contractor

Management

1.2 The BRSR Framework at a Glance

The BRSR is structured into three sections:

BRSR Structure

• Section A — General Disclosures:

Company identity, operations, employees, holding structures, CSR, transparency & grievances

• Section B — Management & Process

Disclosures:

Policies, governance, targets and performance on each NGRBC Principle

• Section C — Principle-wise Performance Disclosures:

Essential + Leadership indicators across all 9 Principles

This article focuses on Sections A and B, which serve as the governance and policy foundation for Section C disclosures.

PART II: IMPACT ON THE NINE NGRBC PRINCIPLES

The New Labour Codes intersect with all nine NGRBC Principles.3 They have a direct and substantive impact on Principle 3 (Employee Wellbeing), Principle 5 (Human Rights), and Principle 8 (Inclusive Growth and Equitable Development). Additionally, they indirectly reinforce Principles 1 (Ethics, Transparency & Accountability), Principle 2 (Product Sustainability), Principle 4 (Stakeholder Engagement), Principle 6 (Environmental Protection), Principle 7 (Public Policy), and Principle 9 (Consumer Value) by strengthening governance structures, compliance frameworks, and responsible business conduct. Below, each Principle is examined in detail.

Principle 1 — Ethics, Transparency and Accountability

Principle 1 of the National Guidelines on Responsible Business Conduct (NGRBCs) under the SEBI’s BRSR framework mandates that companies act and govern themselves with integrity, transparency, and accountability. Fulfilment of this principle can be seen in the statutory compliance obligations that operate under different kinds of corporate and regulatory compliance laws. There are the Labour Codes like the Code on Wages, 2019, and the Industrial Relations Code, 2020. As far as the transparency of standing orders and wage payments provisions in these codes, there are advances that emphasize labour rights, rights of employees, and governance of the working environment and these can be most closely associated with the employee well-being and Responsible Business Conduct (RBC) principles.

1.1 Wage Transparency under Code on Wages 2019

The Code on Wages, 2019 introduces a uniform and standardised definition of “wages,” which has been adopted across all four Labour Codes.4 This harmonised definition reduces ambiguities arising from varying wage interpretations under earlier labour laws. By limiting exclusions and introducing a 50% threshold for wage components, the Code curbs excessive structuring of salary packages designed to minimise statutory contributions such as provident fund, gratuity, and bonus.5 Consequently, it promotes greater transparency, uniformity, and compliance in wage-related statutory calculations.

Illustrative Impact on P1

BEFORE: A company structured salaries with large allowances (HRA, conveyance, special pay) kept outside ‘basic wages’, artificially suppressing EPF and gratuity contributions.

AFTER (Code on Wages): Wages must comprise at least 50% of CTC; allowances cannot collectively exceed 50%. This compels a restructuring that is more transparent to employees and auditors — and must be disclosed as part of BRSR P5 disclosures on ethics in remuneration.

BRSR Disclosure Trigger:

Section B (P1): Policy on equal and fair remuneration; whether wage computation methodology is disclosed to workers.

1.2 Standing Orders — Formalising Workplace Rules

The Industrial Relations Code, 2020 increases the applicability threshold for standing orders to industrial establishments employing 300 or more workers, up from 100 or more workers under the earlier Industrial Employment (Standing Orders) Act, 1946. Under the Code, establishments with 300+ workers must draft and certify standing orders based on model standing orders issued by the government, ensuring rules on classification of workers, attendance, leave, termination, misconduct, and other service conditions are formalised. Smaller establishments are not required to have certified standing orders but remain governed by model standing orders. This change reduces compliance burden for smaller firms while mandating greater transparency of workplace conduct rules in larger entities information that aligns with BRSR Principle 1 disclosures on governance of workplace conduct.

Principle 2 — Sustainable and Safe Products and Services

Principle 2 of the SEBI BRSR framework focuses on sustainable and safe products and services, responsible sourcing, and minimizing environmental and social risks across the value chain. While the Occupational Safety, Health and Working Conditions Code, 2020 primarily governs workplace health and safety standards, it also indirectly supports Principle 2 objectives. The Code includes specific provisions relating to hazardous processes, safety standards in factories, engagement and regulation of contract labour, and employer accountability mechanisms. These provisions strengthen risk management within operational facilities, extend oversight to contractors, and supply chain partners, thereby contributing to responsible value chain management and sustainable production practices.

2.1 Hazardous Processes and Product Safety

The Occupational Safety, Health and Working Conditions Code, 2020 consolidates and rationalizes provisions relating to hazardous processes that were previously contained under the Factories Act, 1948 and the Mines Act, 1952. The Code, read with its First Schedule, identifies industries involving hazardous processes and prescribes enhanced safety obligations, including medical examination, health surveillance, worker protection measures, and mandatory safety standards. While the OSH Code itself does not impose sustainability disclosure requirements, compliance with its safety and risk management provisions becomes relevant for disclosures under SEBI’s Business Responsibility and Sustainability Reporting (BRSR), particularly under Principle 2, which requires companies to assess and disclose the environmental and social risks associated with their products and processes.

Illustrative Impact on P2

BEFORE: A chemical manufacturer disclosed product safety under Factories Act hazardous process rules without integrating contractor and third-party supply chain obligations.

AFTER (OSH Code): The Code explicitly covers inter-state migrant workers and contract workers in hazardous processes. The principal employer must ensure safety standards extend to contractors — creating a supply chain safety obligation disclosed under BRSR P2.

BRSR Disclosure Trigger: Principle 2 Whether safety assessment extends to supply chain; proportion of inputs from sustainable/audited suppliers.

Principle 3 — Employee Wellbeing and Worker Rights

India’s Labour Codes significantly impact principle 3 of the Business Responsibility and Sustainability Reporting (BRSR) framework aligned with the National Guidelines on Responsible Business Conduct (NGRBC). Principle 3 requires companies to respect and promote the well-being of all employees and workers, including those engaged through value chains and contractual arrangements. The four Labour Codes namely the Code on Wages, 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020 consolidate and rationalize multiple labour laws and expand employer obligations relating to minimum wages, timely payment, social security coverage, occupational safety, health standards, working conditions, industrial relations, and grievance redressal. Together, these Codes substantially influence corporate disclosures under Principle 3 by strengthening compliance expectations and formalizing employer responsibilities across wages, social protection, workplace safety, and employee welfare.

3.1 Expanded Definition of ‘Worker’ and ‘Employee’

The Labour Codes adopt broader and more inclusive definitions of workers and establishments. The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) generally applies to establishments employing 10 or more workers, though specific chapters (such as those relating to factories) may apply different thresholds—for example, 10 workers with power and 20 workers without power in the case of factories.6

Further, the Code on Social Security, 2020 explicitly recognizes and provides a framework for gig workers, platform workers, and inter-state migrant workers, significantly expanding the formal ambit of social protection.

This broadened definitional scope substantially increases the category of persons and establishments that may fall within compliance and policy obligations, thereby widening the regulatory reach of labour governance frameworks.7

Category

Pre-Code Coverage

Post-Code Coverage (BRSR Implication)

Gig /

Platform

Workers

No formal social

security coverage

Code on Social Security: Gig/platform

workers to be covered under a separate

Social Security Fund. BRSR must disclose

benefits extended to this category.

Contract

Workers

Limited under

Contract Labour Act

— often excluded

from ESI/EPF of

principal employer

OSH Code: Principal employer responsible

for safety of all workers on premises. BRSR

P3 must reflect contractor worker KPIs.

Inter-State

Migrant

Workers

Building & Other

Construction Workers

Act coverage only

Code on Social Security + OSH Code:

Mandatory registration, portability of

benefits. BRSR P3 disclosure on migrant

worker welfare.

Fixed-Term

Employees

No statutory parity

with permanent

employees

IR Code: Fixed-term employees entitled

to same wages and statutory benefits

as regular employees. BRSR pay-gap

disclosures impacted.

3.2 Social Security — Broadened Scope and New Funds

The Code on Social Security 2020 introduces several changes material to BRSR P3:

Employees’ Provident Fund (EPF): The threshold for EPF applicability is expected to be lowered over time, companies must disclose the proportion of workers covered.
Employees’ State Insurance (ESIC): Extended to all establishments with 10+ workers (from 20+); coverage of hazardous establishments regardless of workforce size.
Gratuity: Continuous service definition now includes fixed-term and contract workers, altering liability computations and benefits disclosures.
Maternity Benefit: Unchanged in substance but now consolidated — creches mandatory for 50+ women workers.
New Social Security Funds: For unorganised workers, gig workers, and platform workers — to be funded by aggregators (up to 1–2% of turnover or 5% of worker payout). BRSR must reflect whether company participates and the extent of coverage.

Illustrative Impact on P3 — Social Security♦

Scenario: A logistics company employs 3,000 delivery executives as ‘gig workers’ through an app-based platform.

BEFORE: No statutory social security coverage — no disclosure required in BRSR.

AFTER (Code on Social Security): The company (as ‘aggregator’) must register workers and contribute to the Social Security Fund.

BRSR P3 Impact: Section A must now disclose these workers in the ‘other than permanent’ category. Section B (P3) must report on social security coverage for gig workers. Section C (P3, Essential Indicator 4) — welfare measures for permanent and non-permanent workers must be updated.

3.3 Occupational Safety — OSH Code 2020

The OSH Code 2020 consolidates 13 laws and introduces a uniform safety framework. Key BRSRrelevant provisions:

OSH Code Provision

BRSR P3 Disclosure Impact

Annual Health Check: Establishments with

500+ workers must conduct annual health

check-ups

BRSR P3 (Essential Indicator 5): Proportion of

workers covered by health/accident welfare

measures — annual check-ups now mandatory

disclosure

Safety Committee: Mandatory for hazardous

processes and large establishments

BRSR Section B (P3): Governance structure

for occupational safety — safety committee

constitution and functioning

Working Hours: 8-hour workday, 48-hour week;

overtime limited to 125 hours per quarter

BRSR P3 disclosure on working hours;

deviations from OSH Code norms are a

governance red flag in BRSR Section B

Leave Encashment: Carry-forward of earned

leave (180 days max), with encashment rights

BRSR benefits disclosures — leave policies

aligned to Code obligations

Contract Labour: Principal employer

responsible for wages, amenities of contractor

workers

BRSR P3 Section C — worker statistics must

now include contractor workers for whom

principal employer is liable

3.4 Illustrative Mapping: P3 BRSR Section C (Essential Indicators)

BRSR P3 Essential

Indicator

Labour Code Change

New Disclosure Requirement

EI 1: Employee count by

type (permanent, other

than permanent)

Fixed-term employment

now has statutory

recognition under IR

Code

Fixed-term employees must

be separately enumerated;

benefits parity with permanent

employees disclosed

EI 2: Differently-abled

employees/workers

OSH Code: Accessibility

provisions in workplace

safety plans

Workplace adaptation measures

for differently-abled under OSH

framework must be disclosed

EI 4: Welfare measures

for permanent and nonpermanent

Code on Social Security:

Gig workers covered;

portability of benefits

Welfare measures for gig/

platform/migrant workers now

required

EI 5: Accidents,

occupational diseases,

near-misses

OSH Code: Unified

accident reporting

framework; DISH

(Database of Industrial

Safety & Health)

Notified

All reportable incidents under

OSH Code must align with

BRSR disclosures

EI 6: Employees/workers

covered under social

security schemes

Code on Social Security:

Broader coverage, new

Funds

Coverage percentages for EPF,

ESIC, NPS, Gratuity by worker

category required

Principle 4 — Stakeholder Engagement

Principle 4 of the National Guidelines on Responsible Business Conduct (NGRBC) requires businesses to respect the interests of and be responsive to all stakeholders, particularly those who are disadvantaged, vulnerable, and marginalized. It mandates companies to identify stakeholders systematically and establish structured engagement mechanisms. In this context, the Industrial Relations Code, 2020 strengthens formal employee management engagement frameworks by introducing provisions relating to grievance redressal committees, trade union recognition, and dispute resolution mechanisms, thereby reinforcing structured stakeholder participation within organizations.

New Labour Codes 2025 and Impact on BRSR: A Governance – Disclosure Convergence Analysis - Part 1

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ABOUT AUTHORS

ABHIJEET KASHYAP

SONAL VERMA