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INTRODUCTION
India's labour law framework has undergone a significant transformation with the consolidation of 29 central labour enactments into four labour codes. One of the most consequential among these is the Industrial Relations Code, 2020 ("Code"), which subsumes the Industrial Disputes Act, 1947 ("IDA"), the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. The stated objectives of the "Code" include simplification of compliance, promotion of ease of doing business, and modernization of industrial relations, while continuing to safeguard workers' rights.
However, the transition from the erstwhile regime to the "Code" has raised institutional and constitutional concerns. These issues were brought into sharp focus by the order of the Delhi High Court in N.A. Sebastian & Anr. v. Union of India (order dated 3 December 2025)1, where the Court, at a prima facie stage, highlighted the consequences of enforcing the "Code" without simultaneously operationalizing the adjudicatory mechanisms contemplated under it.
This article analyses the legal and institutional issues arising from the transition from the "IDA" to the "Code", examines the Delhi High Court's observations, and evaluates the subsequent executive response.
EVOLUTION OF INDUSTRIAL ADJUDICATION UNDER INDIAN LABOUR LAW
The Industrial Disputes Act, 1947: A Foundational Framework
The "IDA" formed the cornerstone of industrial dispute resolution in post-independence India. It established a structured, multi-tier adjudicatory system comprising Conciliation Officers, Labour Courts, Industrial Tribunals, and National Tribunals. These bodies adjudicated disputes relating to dismissal, retrenchment, closure, wages, service conditions, and collective bargaining.
A defining feature of the "IDA" regime was the continuity and accessibility of adjudicatory forums. Labour Courts and Tribunals were permanently constituted, with well-defined jurisdiction and procedure. Over time, this framework generated a substantial body of jurisprudence and became integral to maintaining industrial peace.
Rationale for Consolidation under the Industrial Relations Code, 2020
The "Code" seeks to rationalise and consolidate the law relating to trade unions, conditions of employment, and investigation and settlement of industrial disputes. One of its key structural reforms is the reconfiguration of the adjudicatory framework by replacing Labour Courts and Industrial Tribunals with Industrial Tribunals having both Judicial and Administrative Members.
Adjudicatory Mechanism Under the Industrial Relations Code, 2020
Section 442 of the "Code" empowers the appropriate government to constitute one or more Industrial Tribunals for adjudication of industrial disputes. Each Tribunal is to consist of one Judicial Member and one Administrative Member. This represents a departure from the exclusively judicial composition of Labour Courts under the "IDA" and reflects a policy intent to incorporate administrative expertise into industrial adjudication.
Sub-section (4) of Section 44 makes the appointment, qualifications, tenure, salaries, and service conditions of Tribunal Members subject to rules framed under Section 184 of the Finance Act, 2017.This linkage aligns the "Code" tribunal framework with the broader tribunal reform jurisprudence evolved by the Supreme Court.
Further, Section 513 of the "Code" provides that upon its commencement, all cases pending before Labour Courts and Industrial Tribunals constituted under the "IDA" shall stand transferred to the corresponding Industrial Tribunals under the "Code", and cases pending before National Tribunals shall stand transferred to the National Industrial Tribunal under the "Code".
While this provision appears to ensure continuity, its effective operation is contingent upon the prior constitution and functioning of Industrial Tribunals under the "Code".
Enforcement of the IRC and The Resulting Institutional Vacuum
By notification dated 21 November 2025, issued under Section 1(3) of the "Code", the Central Government appointed the said date as the date on which the provisions of the "Code" came into force. This triggered the statutory transfer mechanism under Section 51.
At the time of enforcement, Industrial Tribunals under Section 44 had not been constituted. Further, the rules governing appointment and service conditions of Tribunal Members under Section 184 of the Finance Act, 2017 had not been notified. In the absence of these rules, the constitution of Tribunals under the "Code" was legally untenable.
Observations of The Delhi High Court
In NA Sebastian & Anr. v. Union of India4, the Delhi High Court, while issuing notice, made significant prima facie observations. The Court noted that the enforcement of the "Code" without operational adjudicatory bodies resulted in a denial of access to justice and reflected inadequate transition planning. The Court emphasized that statutory transfer of cases is meaningless unless the transferee forums are in existence and capable of functioning.
These observations underscore the constitutional dimensions of labour adjudication, particularly the right to access justice and the need for functional judicial mechanisms.
THE INDUSTRIAL RELATIONS CODE (REMOVAL OF DIFFICULTIES) ORDER, 2025
Following the High Court's observations, the Central Government issued the Industrial Relations Code (Removal of Difficulties) Order, 2025, ("Order") notified on 8 December 2025. The Order seeks to address the transitional vacuum arising from the enforcement of the "Code". It provides that the pending industrial disputes as on 21 November 2025 shall continue before the existing Labour Courts and Tribunals until the Industrial Tribunals under the "Code" are constituted. Such cases may thereafter be transferred and decided by the Industrial Tribunals under the "Code", either from the stage already reached or de novo, as deemed appropriate.
Legal And Practical Significance
The "Order" serves as an acknowledgment of gaps in the transition to the "Code". By permitting existing adjudicatory forums to continue functioning, it ensures continuity of industrial justice and mitigates the risk of prolonged litigation and uncertainty for employers and workmen alike.
For effective implementation of the "Code", it is imperative that the Industrial Tribunals under Section 445 are constituted without delay and transitional arrangements are clearly communicated to stakeholders.
A phased and institutionally prepared rollout is essential to ensure that labour law reform enhances, rather than disrupts, access to justice.
CONCLUSION
The order in N.A. Sebastian & Anr. v. Union of India6 highlights the practical challenges of implementing large-scale labour law reforms. While the "Code" represents a significant step towards modernizing industrial relations, its enforcement without operational adjudicatory bodies exposed serious transitional deficiencies.
The Delhi High Court's intervention reinforces the principle that access to justice is central to labour jurisprudence and that legislative reform must be accompanied by robust institutional readiness. The episode offers valuable lessons for the future implementation of labour codes in India.
Footnotes
1. (W.P.(C) 18325/2025
2. Section 44 - Industrial Tribunal; INDUSTRIAL RELATIONS CODE, 2020
3. Section 51 - Transfer of pending cases; INDUSTRIAL RELATIONS CODE, 2020
4. Supra 1
5. Supra 2
6.
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