What Does the Industrial Relations Code 2020 Require of Employers?

The Industrial Relations Code, 2020 is Act 35 of 2020, and it has been in force since 21 November 2025, by S.O. 5320(E), for the provisions the Centre notified. It comprises 14 chapters, 104 sections and three schedules. Two of those chapters bind an employer whatever its size. Section 16, in Chapter III, bars a civil suit against a registered trade union, its office-bearers or its members for an act done in contemplation or furtherance of an industrial dispute to which a member of that union is a party, where the only complaint is that the act induced a breach of an employment contract or interfered with someone's trade, business or employment. Chapter V, sections 40 and 41, imposes the 21 days' notice you owe before changing a service condition listed in the Third Schedule. Chapters II, IV, IX and X instead apply according to headcount. Ritu runs a 140-worker engineering unit in Pune, so Chapters III and V already apply to her and she owes a Grievance Redressal Committee; her next job is to date the day her headcount crosses 300.

Sections 16 and 69 govern different issues. Section 16 gives a registered trade union immunity from civil suit. Section 69 lists the three situations in which a laid-off worker loses compensation, and it is not the conditions precedent to retrenchment, with which employers often confuse it.

The Industrial Relations (Central) Rules, 2026 were notified as G.S.R. 342(E) on 8 May 2026 and carry the forms, the portal and the periods the Code left to be prescribed. Each provision started on the date its commencement order appointed for it.

As originally enacted, section 104(1) authorised repeal to be specified in the commencement notification. That wording has since been amended. The Industrial Relations Code (Amendment) Act, 2026, Act 1 of 2026, substituted section 104(1) and inserted section 104(1A), deemed in force from 21 November 2025. Apply the substituted repeal provision. If your problem turns out to arise under a different statute, which of the four Labour Codes applies is the prior question.

The Code applies to any establishment carrying on an "industry", which section 2(p) defines as a systematic activity carried on by co-operation between an employer and workers for the production, supply or distribution of goods or services. That definition excludes an institution wholly or substantially charitable, social or philanthropic; the sovereign functions of government including defence research, atomic energy and space; domestic service; and any activity the Central Government notifies. The definition determines the scope of the Industrial Relations Code, 2020: it includes an office carrying on a systematic service activity and excludes an institution that is wholly or substantially charitable. Section 2(r) then calls the unit an industrial establishment or undertaking, and a severable unit carrying on an industry counts as one on its own. Your duties then depend on who is a "worker" under section 2(zr): a person doing manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. The worker definition excludes five groups. An apprentice under the Apprentices Act, 1961 is excluded at the head of the definition. Anyone subject to the Air Force Act, the Army Act or the Navy Act is out, and so is anyone in the police service or employed at a prison. Two of those five determine most private-sector classifications: staff employed mainly in a managerial or administrative capacity, and a supervisor drawing wages above ₹18,000 a month or above an amount the Central Government notifies. For everyone else, pay does not affect the classification.

Meera is a machine operator at Ritu's unit on ₹22,000 a month. She is a worker, because she does operational work and no wage threshold applies to her classification. Arjun is a shift supervisor on ₹19,500 a month. He is not a worker, because supervisory work above ₹18,000 takes him out of section 2(zr). Neither their pay ordering nor a job title settles the question. You apply the nature of the work first, and the wage threshold only to a supervisor. Section 2(zr) expressly includes three groups: a working journalist under the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, a sales promotion employee under the Sales Promotion Employees (Conditions of Service) Act, 1976, and, for a proceeding about an industrial dispute, a person already dismissed, discharged, retrenched or otherwise terminated in connection with that dispute. Establish worker status and its consequences before using that classification in a headcount.

A fixed-term employee is a worker on the same footing. Section 2(o) requires the same wages, hours of work, allowances and other benefits as a permanent worker doing the same or similar work, and statutory benefits in proportion to the period served, with gratuity on a fixed term carrying its own trigger under the Social Security Code.

Count on a dated muster roll and record which establishment you counted. Section 2(r) defines that boundary for a mixed campus: a severable unit carrying on an industry is its own industrial establishment, and where the predominant activity of a unit is an industry the whole unit counts as one.

Twenty workers makes a Grievance Redressal Committee compulsory, 100 lets the appropriate Government order a Works Committee, and 300 brings certified standing orders. Section 4(1) is unconditional: every industrial establishment employing twenty or more workers shall have one or more Grievance Redressal Committees, and nobody has to order it. Section 3(1) works the other way. At one hundred or more workers employed, or employed on any day in the preceding twelve months, the appropriate Government may by general or special order require you to constitute a Works Committee, so your duty begins with that order and not with the headcount. Section 28(1) applies the standing-orders chapter where three hundred or more workers are employed, or were employed on any day of the preceding twelve months. The 20-worker grievance committee and the 300-worker standing-orders duty are separate rules, and several duties in this Code use the figure three hundred on counts that differ. Count each threshold separately, and record the date and the muster roll you counted from.

Ritu's Pune unit employs 140 workers, so she owes a Grievance Redressal Committee and nothing more from this table. A Works Committee is required only if the appropriate Government orders one. On 4 March 2026 a second plant takes the unit to 320 workers, and the standing-orders chapter applies from that day. It keeps applying afterwards, because section 28(1) looks back over twelve months at workers employed on any day, so a later fall below 300 does not end its applicability within the year.

The two three hundreds are not the same test. Section 28(1) counts workers employed on any day of the preceding twelve months, in any industrial establishment. Section 77(1) counts an average per working day over the preceding twelve months, excludes an establishment of a seasonal character or one in which work is performed only intermittently, and by section 77(3) covers only a factory, a mine or a plantation. So a single spike day can put an establishment inside Chapter IV and leave it outside Chapter X, and an office, a shop or a warehouse stays outside Chapter X at any headcount. The Chapter X permission duties and the related monetary obligations depend on that narrower test.

The file behind every count holds the dated muster roll, the date on which you counted, the establishment you counted as one unit under section 2(r), and the name of the officer who signed it off.

Every industrial establishment employing twenty or more workers must have one or more Grievance Redressal Committees for disputes arising out of individual grievances, under section 4(1). Employer and worker members sit in equal numbers, the total may not exceed ten, and women workers get representation at least in proportion to the women employed. The chairperson is chosen from the employer's side and the workers' side alternately, on rotation every year. An aggrieved worker files within one year from the date the cause of action arose, and the committee may complete its proceedings within thirty days of receiving the application. A decision needs a majority, and it stands only if more than half of the members representing the workers agreed to it. Where that condition fails, section 4(7) deems that no decision could be arrived at. How long a member serves is fixed by Rule 6(4) of the Industrial Relations (Central) Rules, 2026 at three years.

A dispute about who the workers chose does not stall the committee. Rule 6(5) requires referral to the concerned Regional Labour Commissioner (Central), who hears the parties and decides, and that decision is final. The nomination method depends on whether a union has been recognised, and recognition of a negotiating union is determined by the thirty, fifty-one and twenty per cent tests in section 14.

Rule 7 fixes what an application must carry, and an incomplete one is where employers manufacture their own disputes. The worker states his name, designation, worker code or token number, the department where he is posted, his length of service in years, his category of worker, an address for correspondence, a contact number, the details of the grievance and the relief sought. The application may be sent electronically or otherwise, and it must reach the committee within one year of the cause of action.

Section 4(9) matters more than its length suggests. Where an employer discharges, dismisses, retrenches or otherwise terminates the services of an individual worker, the dispute is an industrial dispute even though no other worker and no trade union is a party to it. Such an individual termination dispute is therefore an industrial dispute under the Code and subject to the applicable conciliation and Tribunal procedures.

Standing orders bind you once three hundred or more workers are employed, or were employed on any day of the preceding twelve months, under section 28(1). They are the certified written service rules covering the eleven matters in the First Schedule. Section 28(2) takes out only establishments whose workers are governed by specified government service rules: the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Services Regulations, the Civilians in Defence Services (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code, or rules the appropriate Government notifies. A company handbook is not one of those. How long each step of certification runs is fixed by the Code, and the Industrial Relations (Central) Rules, 2026 supply the forms and the periods around it. An industrial establishment that missed the initial period can still obtain certification through another procedure.

The eleven First Schedule matters are the audit list to run against your current handbook. Classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed term employment. The manner of intimating periods and hours of work, holidays, pay-days and wage rates. Shift working. Attendance and late coming. The conditions of leave, the procedure for applying and the authority that grants it. The requirement to enter by certain gates and liability to search. Closing and reporting of sections, temporary stoppages of work, and the rights and liabilities that follow. Termination of employment and the notice each side gives. Suspension or dismissal for misconduct, and the acts or omissions that constitute misconduct. The means of redress against unfair treatment or wrongful exactions. And any other matter the appropriate Government notifies.

There are two methods for obtaining certified standing orders. Adopting the Central Government's model orders certifies them at once; certification of your own draft may take up to sixty days. Section 30(3) lets you adopt the Central Government's model standing order, which is then deemed to have been certified, subject to informing the certifying officer of the date of adoption. The Model Standing Orders, 2026 were made under section 29 on 8 May 2026 and cover the mining, manufacturing and service sectors, and Rule 10 requires the employer to tell the certifying officer the specific date from which they were adopted. Where that officer observes that the establishment is engaged in activities other than those the adopted orders cover, Rule 10(4) gives thirty days from receiving the information to direct the employer to include the relevant provisions, and a further thirty days to comply and send a compliance report. The alternative is your own draft. Section 30(2) requires you to consult the trade unions, the recognised negotiating union or the members of the negotiating council before you forward it.

Ritu crosses 300 on 4 March 2026, inside the section 30(1) window, so she prepares a draft based on the Model Standing Orders, consults the union, and forwards it. If the certifying officer says nothing for sixty days, her draft is certified as she filed it. Copies follow within seven days, the orders start thirty days later, and section 35(1) then restricts modification for six months. An establishment that crosses 300 after the window has closed is not left without rules in the meantime: section 29(2) deems the model standing order adopted from the date the chapter becomes applicable until certified orders come into operation, and section 30(3) converts that adoption into certification once the officer is informed. The applicable forms depend on your State's rule status.

Section 38 is the chapter's disciplinary half. Where a worker is suspended pending an investigation or inquiry into misconduct, both the investigation and the inquiry are to be completed ordinarily within ninety days of the suspension. The certified standing orders must provide for subsistence allowance during that suspension: fifty per cent of the wages the worker was entitled to immediately before the suspension for the first ninety days, and seventy-five per cent for the remaining period where the delay is not directly attributable to his own conduct.

An unsettled individual grievance goes to a conciliation officer before it can reach a Tribunal, and each period is measured from the relevant documented event. Section 4(8) gives the worker sixty days from the committee's decision, or from the expiry of the thirty-day period, to apply for conciliation through the trade union of which he is a member. Rule 8 puts that application on the Ministry of Labour and Employment's designated portal, by speed post or in person. The conciliation officer sends his report to the parties and the appropriate Government within forty-five days of the commencement of the proceedings, under section 53(5). Where the report records that no settlement was reached, section 53(6) gives either concerned party ninety days from receiving it to apply to the Tribunal. Two shorter periods replace parts of that sequence in specified circumstances.

Direct application under section 4(10) is not limited to termination cases. It is available to any worker who could apply to the Grievance Redressal Committee, forty-five days after applying to the conciliation officer. Section 4(11) is the sub-section tied to termination: an application under section 4(10) must reach the Tribunal before two years expire from the date of the discharge, dismissal, retrenchment or other termination described in section 4(9).

How many members hear it depends on the subject. Section 44(2) constitutes every Industrial Tribunal of two members, one Judicial and one Administrative, and section 44(3) lets a bench be both of them or either one sitting alone. Section 44(7) assigns only five categories to a two-member bench: the application or interpretation of a standing order, discharge or dismissal including reinstatement, the legality of a strike or lock-out, retrenchment and closure, and trade union disputes. Everything else goes to a bench of a single Judicial Member or a single Administrative Member. Where the bench has both, section 44(8) puts the Judicial Member in the chair. Section 46 adds a National Industrial Tribunal for disputes the Central Government considers of national importance, or likely to interest establishments in more than one State, and its Judicial Member is or has been a High Court judge and presides.

Most individual disputes go through conciliation and are resolved there. Voluntary arbitration is an alternative to Tribunal adjudication, and section 42 sets four conditions. The employer and the workers agree in writing to refer the dispute, naming the arbitrator or arbitrators. An even number of arbitrators requires the agreement to name an umpire, whose award prevails if they divide equally. A copy of the agreement goes to the appropriate Government and the conciliation officer. And where the appropriate Government is satisfied that the persons referring represent the majority of each side, it may notify the reference, after which employers and workers who did not sign get an opportunity to present their case.

Section 57 specifies who is bound. A settlement made outside conciliation binds only the parties to the agreement. A settlement reached in the course of conciliation, an enforceable arbitration award or a Tribunal award binds all parties to the dispute, everyone summoned as a party, the employer's heirs, successors and assigns, and every worker employed in the establishment on the date of the dispute together with everyone subsequently employed there. One event on the workforce side is a dispute before anyone files anything: section 2(zk) counts concerted casual leave on a given day by fifty per cent or more of the workers as a strike, which is why concerted casual leave as a strike needs its own record.

You owe twenty-one days' notice to the workers likely to be affected before you change any service condition listed in the Third Schedule, under section 40. The list runs to eleven items. Changing shift timings and moving the date on which wages are paid are both on it. Rule 19 fixes the mechanics: the notice goes in Form IV, electronically or by speed post or in person, it is uploaded on the establishment's designated portal, and it is displayed conspicuously on the notice board or the electronic board at the main entrance. Where a registered trade union, a negotiating union or a negotiating council exists, a copy also goes to the secretary of each.

Three of Ritu's decisions run through that table. Moving pay day from the 5th to the 7th is item 1, so the notice goes out and the change waits twenty-one days. Adding a third shift is item 6, so it needs notice unless her certified standing orders already provide for shift working, or the situation is emergent and she changes the shift in consultation with the Grievance Redressal Committee. Withdrawing free canteen tea is item 8, the withdrawal of a customary concession, and it needs the same twenty-one days as a pay change.

The four exceptions in the proviso to section 40 are narrow. No notice is needed where the change is made in pursuance of a settlement or award; where the workers affected are governed by the specified government service rules; where an emergent situation requires a change of shift or shift working otherwise than in accordance with standing orders, made in consultation with the Grievance Redressal Committee; or where the change is effected in accordance with an order of the appropriate Government. Section 41 confers a separate power: where the appropriate Government is of the opinion that applying section 40 to a class of establishments or workers would affect employers so prejudicially as to cause serious repercussion on the industry, and public interest requires it, the Government may by notification disapply section 40 to that class or apply it on conditions.

A change that contradicts your certified standing orders needs the section 35 modification route as well as the section 40 notice, and section 35(1) bars any modification for six months after the orders or the last modification came into operation, except by agreement with the workers' side.

An unfair labour practice from the Second Schedule costs ₹10,000 to ₹2,00,000 on a first offence, and section 84 bars every employer, worker and trade union from committing one. Part I of that Schedule lists sixteen practices on the part of employers, from threatening workers with discharge if they join a trade union, through establishing employer-sponsored unions, to refusing to bargain collectively in good faith with a recognised trade union. Part II lists the practices on the part of workers and their unions. The prohibited practices are those the Second Schedule to the Industrial Relations Code, 2020 sets out, and no other conduct is an unfair labour practice. Section 86 runs to twenty sub-sections, and which one applies turns on what you did and, for two of them, on the kind of establishment you run.

The highest penalty band does not apply to Ritu's 140-worker unit. Section 86(1) punishes contraventions of sections 78, 79 and 80, which are the Chapter X permission provisions, and those begin at 300 workers in a factory, mine or plantation on the section 77 count.

Penalties can be imposed through adjudication as well as prosecution, and eligible offences can be compounded. Section 85 lets the appropriate Government appoint an officer, not below the rank of Under Secretary to the Government of India or an officer of equivalent rank in the State Government, to hold an enquiry and impose the penalty under sub-sections (3), (5), (7), (8), (9), (10), (11) and (20) of section 86 and under section 89(7). Section 85(3) prescribes an additional penalty for failing to comply with the order: failing to pay within ninety days of receiving a copy of it costs a fine of ₹50,000 to ₹2,00,000. Section 89 then allows composition at a fixed price: fifty per cent of the maximum fine for an offence punishable with fine only, and seventy-five per cent for one punishable with imprisonment for a term of not more than one year or with fine. An unfair labour practice therefore compounds at ₹1,00,000, being half of the ₹2,00,000 maximum, and the sum is credited to the Social Security Fund established under section 141 of the Code on Social Security, 2020.

Two limits restrict compounding. Section 89 does not apply to an offence punishable with imprisonment only, or with imprisonment and also with fine. Section 89(2) excludes compounding for anyone committing a similar offence a second time within three years of an earlier composition or conviction. Rule 38 contains the mechanics: the compounding officer sends a notice in Form XV through the Ministry's designated portal, and the accused has fifteen days from receiving it to file Part III of that form and deposit the amount electronically. Failing to comply with the compounding officer's order costs a further twenty per cent of the maximum fine under section 89(7).

Most existing documents remain valid. Anything done or any action taken under the three repealed Acts, including a rule, regulation, notification, nomination, appointment, order or direction, is treated by section 104(2) as done under the corresponding provisions of this Code, and stays in force to the extent it is not contrary to the Code. Two provisions do more than that, for two kinds of document. Section 30(11) makes existing standing orders continue and be deemed to be the standing orders certified under sub-section (8), so far as they are not inconsistent with the Code or its rules. Section 57 keeps a conciliation settlement or an award binding on everyone employed at the date of the dispute and everyone employed afterwards. Ask of each document whether the old law that made it can still apply to it, and whether our own copy is still valid. So the work here is a document review rather than a rewrite.

Section 104(1), as substituted by Act 1 of 2026 and deemed in force from 21 November 2025, provides that the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947 stand repealed on and from the date appointed in the notification under section 1(3). The repeal is therefore self-executing on 21 November 2025, and the commencement notification need no longer specify the repeal. Section 104(1A), inserted by the same Act, keeps the Tribunals and statutory authorities functioning under the repealed Acts running until the corresponding bodies become functional under this Code. Section 104(3) applies section 6 of the General Clauses Act, 1897 to the repeal, which preserves accrued rights and pending proceedings.

How long each of those documents binds is settled by section 58. A settlement binds for the period the parties agree, and for six months from the date the memorandum is signed if they agree none. After that it keeps binding until sixty days from a written notice of intention to terminate it. An award stays in operation for one year from the date it becomes enforceable, which the appropriate Government may shorten, or extend by up to a year at a time to a maximum of three years. Section 58(7) adds the requirement that determines who may terminate either one: a termination notice has no effect unless the party giving it represents the majority of the persons bound.

Mark every document in the cupboard one of three ways. It continues, and you cite the section that continues it. It conflicts with the Code, meaning it gives a worker less than the Code requires or assigns a dispute to a forum the Code no longer recognises, and you fix that clause. Or it has expired on its own terms, and you date the expiry. The repealed Acts did not survive as law. Documents made under them did not automatically cease to have effect.