Industrial Relations Code

Industrial Relations Code

All provisions of the Industrial Relations Code, 2020 came into force on 21st November, 2025.

Key Effects of the Industrial Relations Code, 2020

• 1. Definitions & Coverage
• Revised definition of “industry” based on Supreme Court’s triple-test guidelines.
• Supervisory personnel earning above ₹18,000 per month excluded from the category of “workers.”
• Standing Orders applicable once an establishment reaches 300 workers.
• Higher thresholds for applicability:
• CLRA: 20 to 50 workers
• Factories (with power): 10 to 20 workers
• Factories (without power): 20 to 40 workers
• 2. Strikes, Lockouts & Notices
• Mass casual leave of 50% or more employees deemed a strike.
• Mandatory 60-day notice for initiating a strike or declaring a lockout.
• Mandatory 14-day notice period introduced for certain strike/lockout situations.
• Definition of “strike” expanded to include mass casual leave.
• 3. Worker Rights & Committees
• Grievance Redressal Committee expanded from 6 members to 10.
• Limitation period for filing grievance applications reduced from 3 years to 1 year.
• Fixed-Term Employees (FTE) to receive full benefits and gratuity after 1 year of service.
• 4. Trade Union & Negotiation Framework
• A union with 51% worker membership recognised as the Sole Negotiating Union.
• Negotiating Council applicable where no union meets the 51% threshold.
• 5. Retrenchment, Lay-off & Closure
• Threshold for retrenchment/lay-off/closure raised from 100 to 300 workers.
• Revised definition of “wages” may affect computation of retrenchment compensation.
• 6. Reskilling Fund
• Employers must deposit an amount equal to 15 days’ wages per retrenched worker into the Reskilling Fund at the time of retrenchment.
• 7. Licensing & Compliance Ease
• Single All-India License valid for 5 years.
• Deemed approval and renewal of licenses to promote ease of doing business.
• Third-party certification allowed for start-ups and selected establishments.
• Provision for faster adjudication via a Two-Member Tribunal.