Industrial Relations Code, 2020

The Industrial Relations Code, 2020 consolidates the central laws governing trade unions, conditions of employment and industrial disputes. Its statutory scope covers relations among workers, employers and the government, including collective bargaining, standing orders, dispute resolution, strikes, retrenchment and closure.

Laws consolidated and persons covered

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

• Its definition of worker includes persons employed in manual, skilled, technical, operational, clerical or supervisory work, subject to statutory exclusions.
• It excludes persons mainly performing managerial or administrative functions, and supervisors drawing more than Rs 18,000 per month or another notified amount, or exercising mainly managerial functions.

Matters regulated

The Code establishes a common legal framework for both collective representation and the management of industrial conflict.

• It regulates the registration of trade unions and provides for recognition of a negotiating union or negotiating council.
• It provides for works committees, grievance redressal committees and certified standing orders, while also recognising fixed-term employment.
• It governs conciliation, voluntary arbitration, Industrial Tribunals and the National Industrial Tribunal for resolving industrial disputes.
• It regulates strikes and lockouts, lay-off, retrenchment, transfer and closure of undertakings, and creates 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 to an industrial establishment employing at least 300 workers on any day during the preceding twelve months.
• Industrial establishments averaging at least 300 workers during the preceding twelve months generally require prior government permission for lay-off, retrenchment and closure under the special provisions.
• Other provisions, including trade-union regulation and industrial-dispute machinery, operate according to their own definitions and applicability clauses.

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