Labour Markets form an essential element for the growth of economy in the country. It had been over decades that the country had been following old and stringent labour laws where flexibility was a very vague concept. The paper focuses on the need for flexibility in the Labour markets. The old Labour Laws had very little scope for flexibility in the Labour Markets and such had grievous result on the growth of economy. Due to the stringent laws the employers kept less number of employees and the size of the establishment also used to be small, which in turn attracted less investment. All in all, the whole market was falling. Hence reforms in the Labour laws were very much needed and thus the following paper also outlines the recent reforms of the Labour Law code by the Union Government. The reforms have been made keeping in both the employee as well as the employer in mind. Also the reforms have been made with the aim to simplify the complex labour laws by merging various state and central labour laws, with the aim of have more growth of employment as well as investment. The paper also deals with the former labour laws and how they were different when compared with the new Labour Laws.

Keywords: reforms, Labour Laws, investment, employer, employee