This blog is written by Hargun Kaur, a 4th year BBA LL.B. student of Lovely Professional University, under the supervision of Dr. Awnish Kumar Sir. This blog will cover a detailed explanation of the Industrial Relations Code, 2020, its key objectives, and how it aims to reshape the landscape of labour laws in India. It will explore the major provisions introduced in the Code, including changes related to strikes and lockouts, trade union recognition, retrenchment policies, standing orders, and grievance redressal mechanisms. In addition, this blog offers a comparative analysis of the new Code with the earlier laws it consolidates—namely, the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. The blog will also touch upon the judicial outlook by citing landmark case laws that continue to shape the interpretation of industrial laws in India. The insights and analysis in this blog are supported by a range of credible legal and policy sources, ensuring both depth and authenticity.
1. INTRODUCTION
The framework of industrial relations in India has long been governed by a complex tapestry of laws, rules, and judicial precedents, many of which were inherited from colonial times. The nature of labour itself has undergone a dramatic transformation—from the rigid factory-based employment models of the 20th century to the flexible, service-driven, gig-oriented structures of the 21st. However, for decades, the country continued to operate under three major pieces of legislation enacted before India’s independence or in its early post-independence era: the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. While these laws served a foundational role in structuring employer-employee relationships, over time they began to show signs of fragmentation, legal overlaps, and administrative delays, creating uncertainty and inefficiency in industrial governance.
In an effort to address these longstanding challenges and make India’s labour laws more employer-friendly, growth-oriented, and investor-attractive—while still retaining worker protections—the Government of India introduced a sweeping set of labour reforms in 2020. These reforms consolidated 29 central labour laws into four comprehensive Labour Codes, one of which is the Industrial Relations Code, 2020. The IR Code, as it is popularly known, aims to harmonize and streamline the legal provisions relating to trade unions, conditions of employment in industrial establishments, mechanisms for dispute resolution, and regulations on strikes, lockouts, layoffs, and retrenchments.
The Industrial Relations Code, 2020 is not merely a consolidation of earlier laws—it is also a reflection of India’s shifting economic landscape, global labour standards, and the increasing importance of balancing flexibility for employers with security for workers. With the ease of doing business becoming a central policy agenda and India aspiring to become a global manufacturing hub under initiatives like Make in India and Atmanirbhar Bharat, the government found it imperative to simplify the procedural complexities and reduce regulatory burdens that deterred job creation in the formal sector.
One of the most debated aspects of the Code is its impact on workers’ rights to strike, especially in establishments with a larger workforce. While the Code makes provisions for protecting the interests of workers in terms of recognition of trade unions and avenues for conciliation and arbitration, critics argue that it also tilts the balance slightly in favour of industrial flexibility and employer convenience. Thus, the Code becomes a site of contestation between economic efficiency and social justice—making it all the more important to analyze its structure, spirit, and implications in detail.
In this blog, we will explore not only what the Industrial Relations Code, 2020 entails but also how it differs from the legacy laws it replaces. Through this analysis, we seek to understand whether this Code truly represents a new vision for industrial harmony or merely a restructured version of old laws in a new bottle. With references to landmark judicial decisions and expert commentary, this article aims to provide a holistic and critical examination of India’s new industrial relations regime.
1.1 HISTORICAL BACKGROUND
The evolution of industrial relations in India has been shaped by a long history of colonial rule, post-independence economic goals, and changing industrial needs. Under British colonial rule, India had little to no regulation of labour, and the primary concern of the colonial administration was to maximize productivity from the workforce without any significant worker protections. The Trade Disputes Act, 1929, introduced by the British government, marked the first attempt to address industrial unrest, though it largely favored employers and imposed heavy restrictions on workers’ rights to strike. Along with this, the Trade Unions Act, 1926 was enacted, which legalized trade unions but provided minimal support for their collective bargaining rights and did not mandate employer recognition. After India gained independence in 1947, the country’s industrial landscape began to change. The newly formed government, inspired by socialist ideals and the principles laid out in the Directive Principles of State Policy, aimed to protect workers’ rights while fostering industrial growth. The post-independence period saw the introduction of significant labour legislation, notably:
Though these laws were progressive, they became cumbersome over time due to procedural delays, legal overlaps, and challenges in application, particularly in the face of growing industrial diversity and the expansion of the informal sector. In the 2000s, the need for simplified and modernized labour laws became evident, driven by both domestic and international calls for reform. The Second National Commission on Labour (2002) recommended consolidating existing law. It took nearly two decades for this recommendation to materialize, culminating in the passage of four new Labour Codes in 2020, namely:
The Industrial Relations Code, 2020, in particular, marks a significant step in reshaping how industrial peace and justice are maintained in India. It consolidates the three major statutes into one unified framework to reduce legal complexity, improve compliance, and enhance transparency in industrial management. It attempts to resolve longstanding tensions between rigid labour protections and the need for ease of doing business, offering a more centralized, digitized, and flexible structure to handle employment disputes and industrial harmony.Thus, the historical trajectory of labour laws in India reflects a gradual movement—from colonial control to constitutional protection, and now, to modernization and simplification—shaped by economic needs, political ideologies, and evolving industrial realities.
1.2 KEY OBJECTIVES OF THE CODE
2. RECOGNITION OF TRADE UNIONS AND NEGOTIATING BODIES
2.1 CONSTITUTION OF WORK COMMITTEE
An Industrial Establishment having or employed 100 or more workers during 12 months, may be required to constitute a Work Committee to promote protective measures for securing and preserving sensible relations between the employer and workers.The committee is intended to foster cooperation and address grievances, ensuring mutual understanding and improving overall productivity in place.
2.3 RECOGNITION OF NEGOTIATING TRADE UNION
3. STRIKES AND LOCKOUTS
Strike: Defined as the cessation of work by a body of workers acting in combination, or a concerted refusal to work, or a refusal to continue to work by a body of persons employed in an industrial establishment.
Lockout: The temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
3.1 PROHIBITION OF STRIKES AND LOCKOUTS
The Code prohibits strikes and lockouts in the following circumstances:
3.2 NOTICE REQUIREMENTS
Strike Notice: Workers intending to strike must give a notice to the employer:
Lockout Notice: Employers intending to lockout must give a notice to the workers:
4. GRIEVANCE REDRESSAL COMMITTEE
An Industrial Establishment having 20 or more workers shall constitute one or more Grievance Redressal Committees with a maximum of 10 members for resolution of disputes arising out of individual grievances.
5. STANDING ORDERS
Industrial Establishment having or employed 300 or more workers on any day during 12 months, must prepare the standing orders on the following matters:
The employers will be required to prepare a draft of standing orders, based on the Central Government model standing order, within 6 months from the code start date, in consultation with recognized bargaining unions or members of the negotiating council concerning the same and it must be certified by the certifying officer.
6. RETRENCHMENT
7. LAY-OFF
Lay-off occurs when an employer is unable to provide work to a worker due to various factors like a shortage of materials (e.g., coal or power) or equipment failure.
8. CLOSURE
9. EXEMPTIONS
10. COMPARATIVE CHART : EARLIER VS NEW PROVISIONS
This comparative analysis highlights the significant changes introduced by the Industrial Relations Code, 2020, aiming to streamline labor laws, enhance worker rights, and provide clearer guidelines for employers :
Subject Matter | Earlier Provisions | New Provisions (Industrial Relations Code, 2020) |
Definition of ‘Employee’ | The term ’employee’ was not defined in the previous laws. | The Code introduces a comprehensive definition of ’employee’ encompassing all workers, including skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, or clerical work for hire or reward. |
Definition of ‘Worker’ | The term ‘workman’ was used, which excluded certain categories like supervisory and managerial staff. | The term ‘worker’ replaces ‘workman’ and includes all employees, including working journalists and sales promotion employees, thereby broadening the scope of coverage. |
Negotiating Union | No specific provision for the recognition of a negotiating union. | The Code mandates the recognition of a ‘Negotiating Union’ or ‘Negotiating Council’ in industrial establishments. If there is only one trade union, it is recognized as the sole negotiating union. In establishments with multiple trade unions, the union with at least 51% support from workers is recognized. |
Standing Orders | Applicable to industrial establishments with 100 or more workers. | The threshold for applicability is increased to 300 or more workers. Employers are required to prepare standing orders within six months from the commencement of the Code, in consultation with recognized trade unions or members of the negotiating council, and get them certified by the certifying officer. |
Grievance Redressal Committee | No mandatory provision for the constitution of a Grievance Redressal Committee. | Industrial establishments employing 20 or more workers are required to constitute one or more Grievance Redressal Committees, each with a maximum of 10 members, to address and resolve disputes related to individual grievances. |
Retrenchment | Provisions for retrenchment were less detailed, with varying requirements across different laws. | The Code provides detailed procedures for retrenchment, including requirements for notice or compensation in lieu of notice, and mandates re-employment opportunities for retrenched workers if the employer hires new employees within a year. |
Lay-off | Provisions for lay-off were specified in the Industrial Disputes Act, 1947, with certain thresholds and conditions. | The Code specifies that non-seasonal industrial establishments with 50 to 300 workers must pay 50% of basic wages and dearness allowance to a laid-off worker. Establishments with at least 300 workers require prior approval from the central or state government before implementing lay-off, retrenchment, or closure. |
Closure | Provisions for closure were outlined in the Industrial Disputes Act, 1947, with certain thresholds and conditions. | Employers intending to close an industrial establishment are required to serve 60 days advance notice to the government. Compensation provisions for workers with continuous service of not less than one year are specified in case of closure. |
Exemptions | Exemptions were provided under certain circumstances but lacked a comprehensive framework. | The Code allows the central or state government to exempt any new establishment or class of establishments from all or any provisions of the Code in the public interest. |
Strike and Lock-out | Provisions for strikes and lock-outs were specified in the Industrial Disputes Act, 1947, with certain thresholds and conditions. | The Code prohibits strikes and lock-outs in any establishment unless a prior notice of 14 days is provided. This provision, which previously applied only to public utility services, is now extended to all industrial establishments. |
11. CONCLUSION
In conclusion, the Industrial Relations Code, 2020, modernizes India’s labor laws by consolidating key provisions and introducing clearer procedures for trade union registration, grievance redressal, and dispute resolution. Compared to previous laws, it raises thresholds for standing orders and union recognition, aiming for a balance between worker protection and industrial stability. With more specific guidelines on issues like retrenchment, lay-offs, and closure, the Code offers a more structured, worker-friendly framework, fostering fairness and industrial harmony, unlike the fragmented provisions of earlier laws.
REFERENCES
- • JSTOR, A Critical Review of the Industrial Relations Code, 2020, https://www.jstor.org/stable/ (last visited Apr. 25, 2025).
