Introduction

The Industrial Relations Code, 2020 (Act No. 35 of 2020) consolidates and amends the laws relating to trade unions, conditions of employment in an industrial establishment or undertaking, and investigation and settlement of industrial disputes. Presidential assent: 28 September 2020, the same day as the Social Security Code and the OSH Code.

It folds three parent statutes into 14 chapters and 104 sections: the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; and the Industrial Disputes Act, 1947. The design brief came from the Second National Commission on Labour (2002): fewer forums, clearer recognition of a bargaining agent, fixed-term employment on the statute book, and higher thresholds so that small units are not run through the full standing-order and prior-permission machinery.

Implementation status

• 28 September 2020 — assent.
• 21 November 2025 — principal provisions brought into force (the IR Code was the 2020 Code whose commencement notification was the cleanest of the three).
• 8 May 2026 — Industrial Relations (Central) Rules, 2026 notified; States have been notifying their own rules through 2026.

Certified standing orders under the 1946 Act continue by the savings clause even where the present headcount is below 300.

Three Acts subsumed

Together with Wages (4), Social Security (9) and OSH (13), this is the “29 Central laws into 4 Codes” set. IR is the smallest of the four by parent-Act count and the most politically argued.

Key definitions — high-yield

Structure of the Code

Three schedules: First — matters in standing orders; Second — unfair labour practices; Third — conditions of service whose change needs notice.

Chapter-wise notes

Chapter II — Bi-partite forums

• Works Committee (s. 3): appropriate Government may require it in an industrial establishment with 100 or more workers. Equal employer and worker representation. Duty: amity, matters of common interest, compose differences.
• Grievance Redressal Committee (s. 4): mandatory in every industrial establishment with 20 or more workers. One or more committees. Equal employer and worker members, not exceeding ten in a committee. Women members in proportion to women workers. Individual grievances; a decision window commonly tested as 30 days, with an onward step to the conciliation officer.

Chapter III — Trade unions

• Application for registration: the union must have as members at least 10% of the workers or 100 workers, whichever is less, subject to a floor of 7 workers. The 1926 Act’s 7-member floor is not abolished; a size test is added on top.
• Registrar, cancellation, appeal, amalgamation and dissolution follow the 1926 architecture, cleaned up.
• Negotiating union / council (s. 14):
  • Only one registered union in the establishment → that union is the sole negotiating union (subject to the prescribed membership floor in the rules).
  • More than one union → the union with 51% or more of the workers on the muster roll is the sole negotiating union.
  • Nobody at 51% → a negotiating council of unions that each have at least 20% support, with seats in proportion to membership.
• The 2019 Bill had used 75% / 10%. The 2020 Code lowered the sole-union bar to 51% and raised the council entry bar to 20%. Recognition is typically for a three-year term in the rules.
• Central and State Governments may recognise unions at the federal / State level as negotiating bodies for that sphere.

Chapter IV — Standing orders

• Applies to industrial establishments with 300 or more workers (was 100 under the 1946 Act). The appropriate Government may notify a lower figure; it cannot quietly lower the statutory floor without a notification power being used.
• Central Government issues model standing orders. Employer prepares a draft, consults the negotiating union / council, and files for certification.
• First Schedule matters: classification of workers, manner of informing hours / holidays / pay days / wage rates, shift working, attendance, leave, termination, suspension, record of service, grievance redressal.
• Certified standing orders bind until modified. They do not fall away merely because headcount later dips under 300.

Chapter V — Notice of change

No employer shall change conditions of service relating to Third Schedule matters without giving the prescribed notice (classically 21 days under the ID Act habit — confirm the notified period for the paper year). Settlements and awards sit above a unilateral change.

Chapters VI–VII — Arbitration and tribunals

• Employer and workers may refer an existing or apprehended dispute to arbitration in writing.
• Machinery: conciliation officers, Industrial Tribunals, National Industrial Tribunal. The Code collapses the old Labour Court / Tribunal split into a cleaner tribunal model.
• An individual dismissal / discharge / retrenchment / termination is an industrial dispute. After conciliation fails, the worker may apply to the Tribunal (a 45-day figure is commonly tested for that application).
• Awards become enforceable after the prescribed publication window.

Chapter VIII — Strikes and lock-outs

This is the headline change from the 1947 Act. The public-utility notice regime is extended to every industrial establishment.

• No strike / lock-out without a notice given within 60 days before the action.
• No strike / lock-out within 14 days of giving that notice.
• The notice is alive only for 60 days.
• Also barred: during conciliation and for 7 days after it concludes; during Tribunal / National Tribunal / arbitration proceedings and for 60 days after they conclude; during the period of operation of a settlement or award.
• Mass casual leave by 50% or more workers on a day = strike.
• A strike or lock-out in breach of these rules is illegal. Wages for an illegal-strike period are not a free gift.

Chapter IX — Lay-off, retrenchment and closure (the ordinary regime)

• Lay-off compensation: 50% of basic wages plus dearness allowance for a worker with one year of continuous service. A 45-day cap in a 12-month period can apply where there is agreement.
• Retrenchment conditions: one month’s written notice or pay in lieu; compensation of 15 days’ average pay per completed year of continuous service (or part exceeding six months); notice to the appropriate Government.
• Last-in-first-out is the default, subject to agreement. Retrenched workers get preference in re-employment.
• Closure of an undertaking: 60 days’ notice to the appropriate Government. Compensation mirrors retrenchment for eligible workers.
• Chapter IX lay-off compensation provisions switch on at a 50-worker floor for the establishments they name. Seasonal and intermittent establishments have carve-outs.

Chapter X — Special provisions for 300+ establishments

Applies to mines, factories and plantations (and other notified industrial establishments) that are not seasonal / intermittent and that employ 300 or more workers. This is the old Chapter V-B of the ID Act, with the threshold moved from 100 to 300.

• Lay-off, retrenchment and closure need prior permission of the appropriate Government.
• Retrenchment notice to the worker: three months or pay in lieu.
• Closure: 90 days’ notice of intended closure plus the permission application.
• If the Government does not communicate a decision on permission within 60 days, permission is deemed granted.

Chapter XI — Worker Re-skilling Fund

• Set up by the appropriate Government.
• On every retrenchment the employer contributes an amount equal to 15 days’ last-drawn wages of that worker (or such other number of days as the Centre notifies), within 10 days of the retrenchment.
• The Fund credits the equivalent of 15 days’ last-drawn wages to the worker’s account within 45 days.
• This is in addition to statutory retrenchment compensation. It is not a substitute.

Chapters XII–XIV — ULP, penalties, miscellaneous

• No employer, worker or trade union shall commit an unfair labour practice listed in the Second Schedule (interference with unionisation, victimisation, refusal to bargain in bad faith, illegal strike / lock-out as a practice, etc.).
• Penalties are mostly fines, with imprisonment reserved for specified and repeat defaults. Compounding is available for a defined set of offences.
• Section 104 repeals the three parent Acts with savings for proceedings, standing orders and recognitions already in train.

Threshold map

Old law versus the Code

Quick revision sheet

The four-code set: Wages, 2019 · IR, 2020 · Social Security, 2020 · OSH, 2020

30 Questions Test

Single-best-answer MCQs at UPSC EPFO / APFC pitch. Submit to score and reveal explanations.