Globalisation of capital has weakened trade unions by facilitating a shift towards flexible labour markets where job security is diminished. It encourages policies that prioritize ease of doing business, often at the expense of workers' rights. The power dynamics have shifted towards capital, making it difficult for unions to maintain influence, as enterprises are no longer constrained by stringent labour regulations for hiring and dismissing workers. These trends are institutionalized by global indices like the World Bank's Ease of Doing Business, which incentivizes deregulation that undermines trade union protections .

The Wages Code introduces two categories of wages: minimum wage and national floor wage, leading to a divergence that effectively dilutes the minimum wage concept recommended by government authorities. Enforcement is weakened as inspector-cum-facilitators cannot conduct surprise inspections; web-based inspections and electronic submissions are now allowed. The Social Security Code limits benefits to establishments with ten or more workers, excluding the unorganised sector, and although it includes provisions for a social security fund for gig workers, it does not extend comprehensive social security to the unorganised sector, which represents a significant missed opportunity to expand coverage .

The divergence between the minimum wage and the national floor wage results in significant variations in wage standards across different states, exacerbating regional economic inequalities. States may adopt the lower national floor wage to attract investment, leading to a race to the bottom in labour costs. This divergence can undermine living standards and widen income disparities by allowing employers to pay wages insufficient for sustaining basic livelihoods, thus perpetuating poverty and inequality. It reflects a structural inequality embedded within the wage policy, highlighting the prioritization of competitive business environments over fair wage standards .

One could argue that the neoliberal influence on labour law reforms in India manifests in the prioritization of capital interests and deregulation. Labour laws have been revised to facilitate private investment, aligning with the neoliberal agenda of minimizing state intervention and enhancing market efficiency. These reforms include weakening workers' rights, reducing job security, and improving the business environment at the cost of labour protections. This shift mirrors global neoliberal trends pushing for market-oriented policies, reflecting a broader ideological alignment rather than purely domestic economic strategy .

Allowing state governments to exempt new factories from code provisions, as seen in the Factories Act, undermines workers' safety and rights by enabling relaxed compliance with safety standards, such as exposure limits to chemical and toxic substances. This exemption can create a race to the bottom among states to attract investment by offering minimal regulatory constraints, potentially compromising workers' health and safety. It indicates a significant tilt towards prioritizing capital over labour, undermining the balancing of interests between them .

The Industrial Relations Code severely restricts the ability of workers to strike by requiring a 14-day notice period before a legal strike can be initiated. Additionally, mass casual leave by at least 50% of workers is considered a strike, making it nearly impossible for workers to engage in spontaneous or collective action without violating the legal framework. This demonstrates a curtailment of workers' rights to protest and collectively bargain, reflecting a shift in favour of employers' interests over workers' collective action .

The changes to the Contract Labour Act mandate regulations only for firms and contractors employing twenty or more contract workers, excluding those employing between twenty to forty-nine. This loosens control over smaller firms, likely increasing exploitation and reducing job security for contract workers. Fixed-term workers face greater insecurity, as their termination upon contract expiry is not considered retrenchment under the IR Code, facilitating the use of such contracts without accountability or obligation for continuity. This exposes an increasing segment of the workforce to job instability and exploitation risks .

The Occupational Safety, Health and Working Conditions Code establishes new thresholds, requiring twenty or more workers (using power) or forty or more workers (without power) for an establishment to fall under its purview. This excludes smaller establishments from complying with critical safety regulations, potentially lowering overall safety standards for many workers who are not sufficiently covered. It risks leaving a significant number of workers without essential protections for occupational safety and health, highlighting a prioritization of business flexibility over workers' safety .

The new labour codes modify protections against arbitrary dismissals by increasing the threshold for establishments from 100 to 300 workers, allowing firms with fewer than 300 employees to implement 'hire and fire' policies without government permission. Sundar (2020a) estimates that this would leave 44% of workers without protection against arbitrary dismissal. Fixed-term employment is also permitted without it being considered retrenchment, leading to potential deregulation of the labour market and undermining job security .

Three main factors facilitated the fast-tracking of labour reforms in India: the dominance of neoliberal ideas, Prime Minister Modi's efforts to improve India's ranking in the Ease of Doing Business index, and the BJP's position as a single-majority government which reduced the constraints of coalition politics. The COVID-19 pandemic further enabled the expeditious implementation of reforms as trade unions were caught off guard by lockdown restrictions. These reforms significantly weakened trade unions, as globalisation of capital had already diluted their power, and the new labour codes further undermined secured jobs and hindered union membership by increasing the threshold for government permission for layoffs and enabling 'hire and fire' policies .