Labour reforms or labour retreat?

The Draft Industrial Relations (Karnataka) Rules, 2026, mark a significant moment in the state’s labour governance. Framed under the Industrial Relations Code, 2020, they are presented as part of a simplified, modern, investment-friendly labour framework. For trade unions in Karnataka, however, the draft revives a long-standing concern: that labour reforms are steadily diluting workers’ collective voice in the name of ease of doing business.

Union unease has not yet translated into a statewide agitation, but it is deep and structural. The anxiety stems less from individual provisions than from the broader philosophy underpinning the new labour codes.

A central concern relates to the framework for recognition of negotiating unions and councils. The prescribed thresholds are seen as weakening collective bargaining, particularly in establishments with multiple or fragmented unions.

For organised labour, recognition is not a technicality but the cornerstone of negotiating power. Any dilution is viewed as a systemic tilt towards employers.

Unions are equally wary of the dispute resolution framework. Faster conciliation and adjudication are projected as efficiency gains, but rigid timelines and procedural compliance may privilege administrative convenience over substantive justice. There is apprehension that disputes will be pushed to closure rather than resolved on merit.

The right to strike remains intact in principle. Yet notice requirements and cooling-off periods embedded in the Code—and reflected in the draft rules—continue to draw criticism. Trade unions argue that excessive procedural barriers neutralise the strike as an effective instrument, reducing a constitutional freedom to a largely symbolic right.

These concerns have been reinforced by the Draft Occupational Safety, Health and Working Conditions (OSH) Rules, 2026, notified earlier this year. The OSH Rules revive the contentious proposal of a longer workday. Although daily working hours are capped at 10.5 and weekly hours at 48, the state government is empowered to extend shifts up to 12 hours for specified factories or categories of workers.

The draft OSH rules also expand permissible overtime. While overtime wages are fixed at twice the ordinary rate, the quarterly ceiling has been raised to 144 hours—nearly three times the existing 50-hour limit. For unions, this risks normalising extended work hours by turning overtime from an exception into a routine feature.

Another flashpoint is the revised definition of “factory” under the OSH Code, which subsumes 13 earlier labour laws, including the Factories Act, 1948. Raising the threshold from 10 to 20 workers could incentivise outsourcing from larger factories to smaller units beyond stringent regulatory coverage, potentially fostering sweatshop-like conditions where safety protections and overtime safeguards become uncertain.

Concerns also surround the inspector-cum-facilitator regime. By prioritising advisory compliance over strict enforcement, the framework may weaken deterrence against violations, particularly in smaller and high-risk establishments. In Karnataka, these changes directly affect the Factories, Boilers, Industrial Safety and Health Department, traditionally tasked with enforcing labour safety laws. A shift from inspection to facilitation risks eroding deterrent authority at a time when vigilance remains critical.

The OSH Rules further dilute protections for interstate migrant workers by omitting displacement allowances mandated under earlier legislation. At a time of widespread and costly labour migration, reducing migration to a mere administrative category marks a retreat from welfare-oriented regulation.

The State Labour Department maintains that the rules simply operationalise central legislation and that state discretion is limited. Though objections and suggestions have been invited, unions argue that states retain enough latitude to introduce worker-friendly safeguards. Recent debates in Karnataka over extended working hours and labour flexibility have already strained relations between organised labour and the government, deepening a trust deficit.

There are positive elements. Penalties for violations have been enhanced, the duties of employers and workers more clearly defined, free medical check-ups for workers above 40 introduced, and licence consolidation with deemed approval promises administrative efficiency. Yet these measures do not address organised labour’s core concern: the steady recalibration of power away from collective worker agency.

At its heart, the debate over Karnataka’s Draft Industrial Relations Rules, 2026, is not about technical clauses alone. It is about balance and trust. .

(The writer is a retired deputy director of boilers)