When the ink dried on the India-European Union Free Trade Agreement (FTA) in January 2026, the establishment in New Delhi heralded it as the ‘Mother of All Deals.’ Much of the self-congratulation centered around increased market access and visa quotas for Indian professionals. However, buried in the fine print was a historic capitulation: the inclusion of a binding Trade and Sustainable Development (TSD) chapter. For the first time, India had bowed to ‘non-trade issues,’ agreeing to the International Labour Organisation’s (ILO) fundamental conventions. To the casual observer, it appeared the protective umbrella of international human rights had finally been extended over the Indian factory floor.But to read the texts of the four new Labour Codes – and their accompanying rules implemented in late 2025 – alongside this international treaty is to witness a profound legal contradiction. While diplomats from Brussels signed binding commitments to uphold the rights of workers, the Indian State finalised the most systematic dismantling of worker protections in its independent history. The new codes do not merely “simplify” the law for the ease of doing business; they structurally engineer a captive, legally disempowered Reserve Army of Labour.To understand the scale of this collision between international promises and domestic reality, one must examine the micro-physics of power codified in the new rules.The economics of disposabilityThe EU treaty demands fair compensation and the elimination of discrimination (ILO Convention 111). Yet, the domestic architecture actively subsidises a ‘hire and fire’ regime.Consider Rule 34 of the Social Security Rules, which introduces pro-rata gratuity for Fixed-Term Employees (FTEs). By legally validating a structure where the “basic wage” is suppressed, the rule anchors gratuity calculations solely to a shrunken core, partitioning the pay check to ensure the corporate entity retains a larger share of the value produced. The worker’s deferred earnings are legally diminished.Simultaneously, the State has constructed a “Floor Wage” framework seemingly designed to trigger a race to the bottom. Rule 4(2) of the Wage Code rules decouples the traditional criteria of sustenance – calories, clothing, rent, fuel, and education, which the Supreme Court previously treated as a “Right to Life” under the Raptakos Brett norms – from the statutory formula. Instead, it leaves the floor wage to a “technical committee,” allowing for a five-year freeze in revisions.To keep this wage artificially low, the State relies on the legal fiction of the “Standard Family” as a nuclear unit (three consumption units), erasing the sociological reality of the Indian working class where the burden of caring for ageing parents falls entirely on the worker.Also read: Is Go-slow ‘Misconduct’ or a Right of Factory Workers? Latest Rules Criminalise Being HumanThis extraction extends to the worker’s very time. Rule 9(c) of the Wage Code legalises the uncompensated appropriation of employee time by defining “waiting periods” as non-working hours if the worker is not strictly “at the disposal” of the employer. Read alongside the Occupational Safety, Health and Working Conditions (OSH) Code’s overtime waivers and Rule 6’s ambiguous “spread-over” limits, the law effectively permits a de facto 12-hour workday.Even the gig economy is trapped in this statutory instability. Rules 49 and 50 replace the traditional concept of the “Employer” with the “Aggregator,” constructing a welfare model based on a nominal cess (1-2% of turnover) rather than rights. By mandating Aadhaar for registration, the State deploys digital gatekeeping against migrant workers, while simultaneously allowing 16-year-olds to enter the algorithmic loop of delivery work – securing a fresh supply of young labour while absolving platforms of liability.The eradication of the collectiveThe most glaring collision lies in the EU’s binding requirement for Freedom of Association and the Right to Collective Bargaining (ILO Conventions 87 & 98).Under the new Industrial Relations (IR) Code, the State has effectively written the legal strike out of existence. Section 62 mandates a 14-day strike notice for all industrial establishments, not just public utilities. However, Rule 23 (Section 53(1) of the IR Code) dictates that the moment this notice reaches the Conciliation Officer, conciliation proceedings begin automatically. Crucially, strikes are illegal during the pendency of conciliation. The rules thus operationalise a bureaucratic loop: to strike legally, one must give notice; giving notice triggers conciliation; conciliation makes the strike illegal.When workers do attempt to organise, Rule 9(6) (Section 14 of the IR Code) sets an imposing threshold: a single union must command 51% of the workforce to be recognised as the sole negotiating agent. Failing this, they are forced into a “Negotiating Council,” fracturing the collective voice and allowing the employer to divide and rule.The ideological shift is perhaps best captured by Form XXVI, the “Employment Information Return,” which requires employers to detail “Manpower Shortages.” It frames human beings not as citizens requiring livelihoods, but as inventory stock – like coal or steel – signalling a shift from welfare to corporate supply.Criminalising the human conditionIn 2022, the EU explicitly added Occupational Safety and Health (OSH) as a fundamental binding commitment (ILO Conventions 155 and 187). Yet, the domestic rules actively deregulate the factory floor.Rule 41 signals the retirement of the traditional “Labour Inspector,” replacing them with an “Inspector-cum-Facilitator.” This semantic pivot from deterrence to “regulatory facilitation” is compounded by Rule 78, which allows a contractor to obtain a single, pan-India license. A contractor registered in Gujarat can now exploit workers in Odisha, and the local inspector is powerless to intervene. It is the centralisation of impunity.Furthermore, Rule 26 mandates a Safety Committee only for establishments with 500 or more workers, deliberately ignoring the MSME sector where the vast majority of accidents occur. In the construction sector, the new Cess Rules have dangerously privatised the audit of welfare funds, allowing self-assessment by chartered engineers. Meanwhile, the draft rules weaken maternity rights by allowing employers to opt out of physical crèche facilities for a nominal fee, a structural deterrent to retaining female workers that directly violates the spirit of the EU’s anti-discrimination mandate.But the quietest, most pervasive violence operates within the Model Standing Orders (Schedule B). By expanding the definition of “misconduct” to include “go-slow,” the rules weaponise exhaustion. In an era where production targets are algorithmically pushed to physiological limits, slowing down is often the body’s only defence against collapse. By categorising this biological reality as a firing offence, the law sides with the machine against the metabolism of the worker. Under these orders, to be tired is to be guilty.The sanctions trapHow does this system of total subjugation square with an international treaty binding India to ILO conventions?It is a constitutional trap. Under Article 253 of the Constitution, the Union government has the power to legislate on any subject – even those on the concurrent List, like labour – to implement an international treaty. If a progressive state government attempts to amend its laws to genuinely empower local inspectors or protect striking workers, the Centre can invoke its binding commitments to the EU—citing the need for “predictability” for foreign capital – to strike the state law down. The FTA effectively becomes a weapon to bypass federalism.The European Union is not blind to this contradiction; German auto-manufacturers and French textile giants require the cheap, flexible, and easily disposable labour that these new Codes guarantee. But by demanding a binding TSD chapter, the EU has secured a non-tariff “punitive mechanism.” If Indian exports suddenly become too competitive, Brussels can point to India’s Labour Codes, accurately claim that our laws on strikes and safety violate ILO standards, and legally slap punitive tariffs on Indian goods under their 2022 sanctions policy. New Delhi has handed them the remote control to our export economy.When viewed in totality – alongside policies like the new VB-GRAM G Bill, which bans rural work during harvest seasons to force a statutory flush of distress migration to the cities – the grand design is unmistakable. The State destroys rural bargaining power to flush the poor into the urban trap, where the Labour Codes wait to strip them of their rights and legalise their precarity.In signing the “Mother of All Deals,” we did not elevate the rights of the Indian worker to meet the world. We simply codified their exploitation on a global scale.