Labour Codes in India – An Overview – Industrial Relation Code

The year 2019 and 2020 saw the unification of the Indian labour laws into 4 labour codes segregating 29 central laws into 4 segments. This consolidation of laws as we know aims at bringing in ease of doing business.

As India nears the implementation of the codes in the coming financial year, we bring to you a snapshot of the codes in the next couple of weeks.

Industrial Relations Code, 2020

The Industrial Relations Code, 2020 provides a broader framework to protect the rights of workers to make unions, to reduce the friction between the employers, and workers and to provide regulations for the settlement of industrial disputes by consolidating the following 3 Centrals labour Acts.

  1.   The Trade Unions Act, 1926
  2.   The Industrial Employment (Standing Orders) Act, 1946
  3. The Industrial Disputes Act, 1947

Please find the highlights of the code below.


Salient Features of the Industrial Relations Code, 2020

  1. The definition of “Worker” has been revised to include persons in supervisory capacity getting wages up to eighteen thousand rupees per month.
  2. Concept of “Re-skilling fund” has been introduced.
  3. Registered trade unions may be recognized by the Centre/State as Centre/State trade unions as per necessity.
  4. Concept of Negotiating Trade Union and Negotiating Trade Councils has been introduced to streamline negotiations with the employer.
  5. The definition of “Strike” includes casual leave taken by more than fifty per cent of the employees on a given day. Trade union have to give notice of 14 days before going on strike.
  6. Provisions with respect to Standing Orders apply to Industrial Establishments with more than 300 employees only.
  7. The establishment with less 300 workmen can be laid-off, retrenched, closed without government approval.
  8. An industrial dispute can be voluntarily referred to arbitration by the employer as well as the workers

Compliance Requirement

Works Committee100 or more workersConstitution of Works Committee consisting of representatives of employer and workers
Grievance Redressal Committee20 or more workersConstitution of Grievance Redressal Committees for consisting of equal number of members representing employer and workers
Preparation of draft standing orders by employer300 or more workersEmployer must prepare draft Standing Orders within a period of six months from the date of commencement of this Code
Notice of change in condition of service300 or more workersEmployers who propose to effect any change in conditions of service applicable to any worker in respect of any matter under the Third Schedule shall affect such change by giving 21 days’ notice to workers
Duty of employer to maintain muster roll of worker50 or more workersIt shall be the duty of every employer for the purposes of this Chapter to maintain a muster roll and to provide for making of entries therein by workers who present themselves for work
Contribution to worker re skilling fundContribution of the employer of an industrial establishment that is equal to fifteen days wages last drawn by the work-er immediately before

Grievance Redressal Mechanisms Under the Code


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