Industrial Relations Code, 2020
The Industrial Relations Code 2020 is one of the most significant labour law reforms introduced in India. It consolidates three major laws, the Trade Union Act, 1926, the Industrial Employment Standing Orders Act, 1946, and the Industrial Disputes Act, 1947, into a single, unified framework.
As part of the broader labour law reforms 2025 India, the repealed provisions have taken effect from 21 November 2025.
This reform directly impacts how industrial relations in India are regulated, particularly in areas such as trade union recognition, dispute resolution, lay-off procedures, and standing orders for larger establishments.
Industrial Relations Code 2020 Summary
The Industrial Relations Code 2020 summary can be understood through three structural changes:
- Consolidation of three central labour laws into one code
- Introduction of uniform definitions across establishments
- Simplified dispute resolution and compliance mechanisms
The goal is to streamline industrial relations and labour laws in India while ensuring protection for workers and operational flexibility for employers.
Repeal of Existing Laws
The Code replaces:
- Trade Union Act, 1926
- Industrial Employment Standing Orders Act, 1946
- Industrial Disputes Act, 1947
Instead of multiple overlapping regulations, businesses and workers now operate under one consolidated legal framework.
Standing Orders and the 300 Workers Rule
One of the most debated reforms is the Standing Orders 300 workers rule.
Under the Code, establishments employing 300 or more workers must clearly define service conditions, employment classifications, disciplinary procedures, and termination policies.
This change aims to reduce regulatory burden for smaller establishments while maintaining structured employment conditions in larger organizations.
Lay-Off and Retrenchment Rules in India
The Code updates lay-off and retrenchment rules India by revising approval requirements for certain establishments before workforce reduction or closure.
Employers above the prescribed threshold must seek government approval before retrenchment or closure. This provision attempts to balance:
- Worker job security
- Employer operational flexibility
Dispute Resolution and Grievance Redressal
The Code strengthens internal grievance redressal committees and promotes conciliation mechanisms to prevent prolonged industrial disputes.
By improving settlement processes, the reform aims to create more stable industrial relations in India, reduce litigation, and promote workplace harmony.
Why the Industrial Relations Code 2020 Matters
The reform is designed to:
- Promote ease of doing business
- Reduce compliance complexity
- Improve transparency in trade union recognition
- Modernize industrial dispute management
In essence, the Industrial Relations Code 2020 seeks to strike a balance between economic growth and worker protection in India’s evolving industrial ecosystem.