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.
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