Industrial Relations Code, 2020

The Industrial Relations Code, 2020 consolidates central laws on trade unions, standing orders and industrial disputes. It regulates relations among workers, employers and government, including collective bargaining, dispute resolution, strikes, retrenchment and closure. Its definition of industry identifies the employer-worker activities covered by this framework.

Statutory meaning of industry

An industry is any systematic activity carried on through cooperation between an employer and workers, whether employed directly or through an agency, including a contractor. The activity must involve the production, supply or distribution of goods or services to satisfy human wants or wishes, except wants that are merely spiritual or religious.

• An activity may qualify whether or not capital is invested and whether or not it is carried on for gain or profit.
• The definition excludes institutions owned or managed by organisations wholly or substantially engaged in charitable, social or philanthropic service; government activities relatable to sovereign functions, including Central Government departments dealing with defence research, atomic energy and space; domestic service; and any activity notified by the Central Government.

Coverage and matters regulated

The Code repeals and replaces the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947, and extends to the whole of India.

• A worker includes persons employed in manual, skilled, technical, operational, clerical or supervisory work, subject to statutory exclusions. Persons mainly performing managerial or administrative functions, and specified supervisors drawing above Rs 18,000 per month or another notified amount, are excluded.
• The Code regulates trade-union registration, negotiating unions or councils, works committees, grievance redressal committees, standing orders and fixed-term employment.
• It provides for conciliation, voluntary arbitration, Industrial Tribunals and the National Industrial Tribunal, and regulates strikes, lockouts, lay-off, retrenchment, transfer and closure.
• It also establishes a worker re-skilling fund.

Threshold-based application

Different chapters have different employment thresholds, so the 300-worker threshold does not govern the entire Code.

• The standing-orders chapter generally applies where at least 300 workers were employed on any day during the preceding twelve months.
• Specified industrial establishments averaging at least 300 workers during the preceding twelve months generally require prior government permission for lay-off, retrenchment and closure.
• Trade-union regulation and industrial-dispute machinery operate according to their own applicability provisions.