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Wednesday, May 20, 2026

Director’s Liability under the Labour Codes - Cyril Amarchand Mangaldas

Summary: The Labour Codes provide for a more uniform framework for director liability, harmonising the previously fragmented provisions under the erstwhile labour statutes. We have evaluated director liability under the Labour Codes, how the Courts have historically determined director liability, and outlined key safeguards and risk mitigation measures for organisations.

The implementation of the Labour Codes, namely, the Code on Wages, 2019 (“Wage Code”), the Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”), the Industrial Relations Code, 2020, the Social Security Code, 2020 (collectively, the “Codes”), has significantly reshaped India’s labour law landscape.

The introduction of the Codes has brought renewed focus to the treatment of director liability. Beyond consolidation, the Codes reflect a move towards greater uniformity in enforcement standards and accountability across the subsumed labour laws. Under the earlier regime, the scope and basis of director liability varied across statutes, leading to fragmented and sometimes inconsistent exposure. The Codes seek to harmonise the approach to director liability across the subsumed laws, reducing ambiguity around thresholds for liability and circumstances in which enforcement action may be initiated. In this context, this article outlines the statutory framework governing director liability under the Codes and highlights certain practical considerations for managing exposure of board members and...



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