Industrial Relations Code, 2020 received Presidential Assent on 28-09-2020.

The Industrial Relations Code, 2020

Industrial Relations Code has been introduced for amalgamating, simplifying and rationalising the relevant provisions of ––

(a) the Trade Unions Act, 1926;

(b) the Industrial Employment (Standing Orders) Act, 1946; and

(c) the Industrial Disputes Act, 1947.

Purpose and Objective

The said legislation provides a broader framework to protect the rights of workers to form unions, to minimise the friction between the employers and workers and to provide provisions for investigation and settlement of industrial disputes.

The object of the proposed legislation is to achieve industrial peace and harmony as the ultimate pursuit in resolving industrial disputes and to advance the progress of the industry by bringing about the existence of harmony and cordial relationship between the employers and workers.

Salient Features:

(i) to define “workers” which includes the persons in supervisory capacity getting wages up to eighteen thousand rupees per month or an amount as may be notified by the Central Government from time to time;

Fixed-Term Employment

(ii) to provide for fixed-term employment with the objective that the employee gets all the benefits like that of a permanent worker (including gratuity), except for notice period after the conclusion of a fixed period, and retrenchment compensation. The employer has been provided with the flexibility to employ workers on a fixed-term basis on the basis of requirement and without restriction on any sector;

Definition of “Industry” Revised

(iii) to revise the definition of “industry” that any systematic activity carried on by co-operation between the employer and workers for the production, supply or distribution of goods or services with a view to satisfying human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature) with certain exceptions;

Concerted Casual Leave under “STRIKE”

(iv) to bring concerted casual leave within the ambit of the definition of strike;

Adequate Representation of Women Workers

(v) to provide the maximum number of members in the Grievance Redressal Committee up to ten in an industrial establishment employing twenty or more workers. There shall be an adequate representation of the women workers therein in the proportion of the women workers to the total workers employed in the industrial establishment;

Negotiating Union

(vi) to provide for a new feature of recognition of negotiating union and negotiating council in an industrial establishment by an employer for the purpose of negotiations. The criterion for recognition of negotiating union has been fixed at fifty-one per cent. or more workers on a muster roll of that industrial establishment. As regards the negotiating council, a Trade Union having support every twenty percent. of workers will get one seat in the negotiating council and the fraction above twenty per cent. shall be disregarded;

Appeal for Cancellation of Trade Union

(vii) to provide for an appeal against non-registration or cancellation of registration of Trade Union before the Industrial Tribunal;

Recognition of Trade Union

(viii) to empower the Central Government and the State Governments to recognise a Trade Union or a federation of Trade Unions as the Central Trade Union or State Trade Unions, respectively;

Standing Order

(ix) to provide for the applicability of threshold of three hundred or more workers for an industrial establishment to obtain certification of standing orders, if the standing order differ from the model standing order made by the Central Government;

(x) to provide that if the employer prepares and adopts a model standing order of the Central Government with respect to the matters relevant to the employer’s industrial establishment, then the model standing order would be deemed to be certified. Otherwise, the industrial establishment may seek certification of only those clauses which are different from the model standing orders;

Industrial Tribunal

(xi) to set up an Industrial Tribunal consisting of a Judicial Member and an Administrative Member, in place of only Judicial Member who presently presides the Tribunal. For certain specified cases, the matters will be decided by the two-member Tribunal and the remaining shall be decided by a single-member Tribunal as may be provided for in the rules;

(xii) to set up Industrial Tribunals in the place of existing multiple adjudicating bodies like the Court of Inquiry, Board of Conciliation and Labour Courts;

(xiii) to remove the reference system for adjudication of Industrial Disputes, except the reference to the National Industrial Tribunal for adjudication;

Conciliation Proceedings

(xiv) to provide that the commencement of conciliation proceedings shall be deemed to have commenced on the date of the first meeting held by the conciliation officer in an industrial dispute after the receipt of the notice of strike or lock-out by the conciliation officer;

Strikes & Lock-Outs | 14 days notice required

(xv) to prohibit strikes and lock-outs in all industrial establishments without giving notice of fourteen days;

Industrial Establishments Obligation

(xvi) to provide for the obligation on the part of industrial establishments pertaining to mine, factories and plantation having three hundred or more workers to take prior permission of the appropriate Government before lay-off, retrenchment and closure with flexibility to the appropriate Government to increase the threshold to higher numbers, by notification;

Re-skilling fund | Retrenched Workers

(xvii) to set up a re-skilling fund for training of retrenched workers. The fund shall, inter alia, consist of the contribution of the employer of an amount equal to fifteen days wages last drawn by the worker immediately before the retrenchment or such other number of days, as may be notified by the Central Government, in case of retrenchment only. The fund shall be utilised by crediting fifteen days wages last drawn by the worker to his account who is retrenched, within forty-five days of the retrenchment as may be provided by rules;

Compounding Offences

(xviii) to provide for compounding of offences by a Gazetted Officer, as the appropriate Government may, by notification, specify, for a sum of fifty per cent. of the maximum fine provided for such offence punishable with fine only and for a sum of seventy-five per cent. provided for such offence punishable with imprisonment for a term which is not more than one year, or with fine;


(xix) to provide for penalties for different types of violations to rationalise with such offences and commensurate with the gravity of the violations;

(xx) to empower the appropriate Government to exempt any industrial establishment from any of the provisions of the Code in the public interest for the specified period.

Read the detailed Act, here: Industrial Relations Code, 2020

Ministry of Law and Justice

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