THE INDUSTRIAL RELATIONS CODE 2020

A comprehensive legislation consolidating and amending laws relating to trade unions, conditions of employment, and industrial dispute resolution in India.

Overview

The Industrial Relations Code, 2020 is a significant piece of legislation in India, enacted to consolidate and amend laws relating to trade unions, conditions of employment in industrial establishments, and the investigation and settlement of industrial disputes. It is one of the four labour codes introduced by the Government of India to streamline and simplify the country's labour laws, replacing 29 existing central labour laws.

Amalgamated Laws

📜Industrial Disputes Act, 1947
🏛️Trade Unions Act, 1926
⚖️Industrial Employment (Standing Orders) Act, 1946

Key Objectives

🎯Simplify and rationalize labour laws to facilitate ease of doing business
🤝Promote harmonious employer-employee relationships
🛡️Protect workers' rights to form unions and engage in collective bargaining
⚖️Streamline the resolution of industrial disputes
⚡Provide flexibility to employers while ensuring worker protections

Key Provisions

Trade Unions

📋
Registration:A trade union can be registered with seven or more members. To be recognized, a trade union must have at least 10% of workers or 100 workers (whichever is less) in an establishment.
🤝
Negotiating Union/Council:If multiple unions exist, the union with at least 51% of workers as members is recognized as the negotiating union.

Industrial Disputes

⚖️
Resolution Mechanisms:Conciliation, Arbitration, and Industrial Tribunals for dispute resolution.
🏛️
Works Committee:Employers with 100 or more workers must constitute a Works Committee with equal representation.

Standing Orders

📋
Threshold:Industrial establishments with 300 or more workers must prepare standing orders.
📄
Coverage:Worker classification, work hours, holidays, wage rates, termination, and grievance redressal mechanisms.

Layoffs, Retrenchment, and Closure

📊
Threshold Increase:The threshold for requiring government permission increased from 100 to 300 workers.
💰
Severance Benefits:For retrenchment, employers must provide one month's notice or equivalent pay, plus 15 days' wages for each year of continuous service.
🎓
Reskilling Fund:Employers must contribute an amount equal to 15 days' wages to a reskilling fund for retrenched workers.

Chapters and Sections

CHAPTER I: PRELIMINARY

1
Short title, extent and commencement
2
Definitions

CHAPTER II: BI-PARTITE FORUMS

3
Works Committee
4
Grievance Redressal Committee

CHAPTER III: TRADE UNIONS

5
Registrar of Trade Unions
6
Criteria for registration
7
Provisions to be contained in constitution or rules of Trade Union
8
Application for registration, alteration of name and procedure thereof
9
Registration
10
Cancellation of registration
11
Communications and notices to Trade Unions
12
Incorporation of registered Trade Union
13
Certain Acts not to apply to registered Trade Unions
14
Recognition of negotiating union or negotiating council
15
Objects of general funds, composition of separate fund and membership fee of Trade Union
16
Immunity from civil suit in certain cases
17
Criminal conspiracy in furtherance of objects of Trade Union
18
Enforceability of agreements
19
Right to inspect books of Trade Union
20
Rights of minor to membership of Trade Union
21
Disqualification of office-bearers of Trade Unions
22
Adjudication of disputes of Trade Unions
23
Proportion of office-bearers to be connected with industry
24
Change of name, amalgamation, notice of change and its effect
25
Effect of dissolution
26
Annual returns
27
Recognition of Trade Unions at Central and State level

CHAPTER IV: STANDING ORDERS

28
Application of this Chapter
29
Making of model standing orders by Central Government and temporary application
30
Preparation of draft standing orders by employer and procedure for certification
31
Certifying officer and appellate authority have powers of civil court
32
Appeals
33
Date of operation of standing orders and its availability
34
Register of standing orders
35
Duration and modification of standing orders
36
Oral evidence in contradiction of standing orders not admissible
37
Interpretation, etc., of standing orders
38
Time-limit for completing disciplinary proceedings and liability to pay subsistence allowance
39
Power to exempt
40
Notice of change
41
Power to exempt

CHAPTER V: NOTICE OF CHANGE

42
Notice of change
43
Power to exempt

CHAPTER VI: VOLUNTARY REFERENCE OF DISPUTES TO ARBITRATION

44
Voluntary reference of disputes to arbitration

CHAPTER VII: MECHANISM FOR RESOLUTION OF INDUSTRIAL DISPUTES

45
Conciliation officers
46
Industrial Tribunal
47
National Industrial Tribunal
48
Constitution of National Industrial Tribunal
49
Decision of Tribunal or National Industrial Tribunal
50
Disqualifications for members of Tribunal and National Industrial Tribunal
51
Procedure and powers of arbitrator, conciliation officers, Tribunal and National Industrial Tribunal
52
Powers of Tribunal and National Industrial Tribunal to give appropriate relief in case of discharge or dismissal of worker
53
Transfer of pending cases
54
Adjustment of services of presiding officers under repealed Act
55
Conciliation and adjudication of dispute
56
Reference to National Industrial Tribunal
57
Form of award, its communication and commencement of operation

CHAPTER VIII: STRIKES AND LOCK-OUTS

58
Payment of full wages to worker pending proceedings in higher Courts
59
Persons on whom settlements and awards are binding
60
Period of operation of settlements and awards
61
Recovery of money due from employer
62
Commencement and conclusion of proceedings
63
Certain matters to be kept confidential
64
Prohibition of strikes and lock-outs
65
Illegal strikes and lock-outs
66
Prohibition of financial aid to illegal strikes or lock-outs

CHAPTER IX: LAY-OFF, RETRENCHMENT AND CLOSURE

67
Application of sections 67 to 69
68
Definition of continuous service
69
Right of workers laid-off for compensation
70
Duty of an employer to maintain muster rolls of workers
71
Workers not entitled for compensation in certain cases
72
Conditions precedent to retrenchment of workers
73
Procedure for retrenchment
74
Re-employment of retrenched worker
75
Compensation to workers in case of transfer of establishment
76
Sixty days' notice to be given of intention to close down any undertaking
77
Compensation to workers in case of closing down of undertakings
78
Effect of laws inconsistent with this Chapter

CHAPTER X: SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE IN CERTAIN ESTABLISHMENTS

79
Application of this Chapter
80
Prohibition of lay-off
81
Conditions precedent to retrenchment of workers
82
Procedure for closing down an undertaking
83
Duty of an employer to maintain muster rolls of workers
84
Certain provisions of Chapter IX to apply to industrial establishment to which this Chapter applies

CHAPTER XI: WORKER RE-SKILLING FUND

85
Worker re-skilling fund

CHAPTER XII: UNFAIR LABOUR PRACTICES

86
Prohibition of unfair labour practice

CHAPTER XIII: OFFENCES AND PENALTIES

87
Power of officers of appropriate Government to impose penalty in certain cases
88
Penalties
89
Penalty for closure without permission
90
Cognizance of offences
91
Offences by companies
92
Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings
93
Where employer contravenes provisions of section 90
94
Power to transfer certain proceedings
95
Protection of persons
96
Representation of parties
97
Removal of doubts in interpretation of award or settlement
98
Power to exempt
99
Jurisdiction of civil courts barred
100
Protection of action taken in good faith
101
Power of appropriate Government to make rules
102
Delegation of powers
103
Power to amend Schedules
104
Amendment of Act 7 of 2017
105
Power to remove difficulties
106
Repeal and savings

Implementation Status

Passed by Parliament

Lok Sabha: September 22, 2020

Rajya Sabha: September 23, 2020

Presidential Assent

Received on September 28, 2020

Official Gazette notification pending

State Implementation

Draft rules being prepared

Implementation expected soon

Critical Analysis and Implications

Employer Flexibility

✅Increased thresholds provide greater flexibility in hiring and firing
✅Legal basis for fixed-term employment
✅Potential boost to industrial growth and ease of doing business

Worker Protections

🛡️Reskilling fund for retrenched workers
🛡️Strengthened dispute resolution mechanisms
🛡️Support for trade union recognition and collective bargaining

Criticisms

⚠️May undermine job security for informal workforce
⚠️Stricter conditions for strikes may weaken bargaining power
⚠️Exclusion of informal sector limits broader impact

Economic Context

📈Aligns with Second National Commission on Labour recommendations
📈Aims to balance employer flexibility with worker protections
📈Success depends on effective implementation and transparent rule-making

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