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As a latest update, the Government of India has officially
notified today the Industrial Relations Code, 2020 ("IR
Code") vide Notification bearing No. F. No. S-11025/07/2025-
IR(PL), consolidating and repealing three key central labour laws
— The Trade Unions Act, 1926, Industrial Employment (Standing
Orders) Act, 1946, and Industrial Disputes Act, 1947.
Key Features at a Glance
- The IR Code brings fixed-term employees at par with permanent employees for statutory entitlements. They are now eligible for statutory benefits such as ESI, PF, bonus, and even gratuity, proportionate to their tenure.
- The applicability threshold for standing orders has been enhanced to three hundred (300) workers. The expansion also covers commercial establishments, widening the scope significantly.
- To support workers affected by retrenchment, the IR Code mandates the creation of a 'Worker Re-skilling Fund'. Employers must contribute an amount equivalent to fifteen (15) days' last drawn wages for every retrenched worker within forty-five (45) days.
- The IR Code strengthens the adjudication mechanism by
establishing Industrial Tribunals with clearer processes and
time-bound resolution norms. Workers facing discharge, dismissal,
retrenchment, or termination may directly approach a tribunal after
forty-five (45) days of conciliation, provided the dispute is
raised within two (2) years.
- Maximum of ten (10) members;
- Equal representation of employer and worker representatives;
- Mandatory proportionate representation of women;
- Rotational chairpersonship between employer and worker representatives; and
- All individual grievance-related issues must be filed within one (1) year
- The IR Code formalises collective bargaining by mandating recognition of a sole negotiating union supported by at least 51% of workers. Where multiple unions exist without majority support, a negotiating council will be formed.
- The IR Code brings clarity by defining timelines relating to conciliation proceeding and individual grievances.
- Trade unions must now provide a fourteen (14) day advance notice before going on strike.
- For the first time, the Code allows certain offences to be
resolved through compounding:
- 50% of the maximum fine for offences punishable with fine only; and
- 75% for offences punishable with imprisonment up to one year plus fine
- Penalties overall have been increased significantly up to INR 2,00,000, with additional fines (INR 2,000 per day) for continued non-compliance. Repeat offences may attract fines up to INR 4,00,000 and even imprisonment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
