The Industrial Relations Code, 2020 is a central legislative Act that consolidates and amends the laws relating to trade unions, conditions of employment, and the investigation and settlement of industrial disputes in India. It is one of the four new Labour Codes enacted by the Government of India to simplify and modernize the country's fragmented labour laws, which previously consisted of over 40 separate central laws. The Code received Presidential assent on September 28, 2020, and came into force on November 21, 2025.
The Code was created to replace and unify three major pre-existing Acts: the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. The primary problem it aimed to solve was the complexity and lack of uniformity in the old framework, promoting ease of doing business while also protecting workers' rights.
Key provisions of the Code include the introduction of fixed-term employment, which grants fixed-term workers the same benefits as permanent workers, including pro-rata gratuity after one year of service. It also raises the threshold for requiring government approval for lay-offs, retrenchment, and closure from 100 workers to 300 workers in an industrial establishment. The Code mandates a 60-day notice period before workers can go on strike or employers can initiate a lockout. Furthermore, it introduces a Workers' Re-skilling Fund, requiring employers to contribute an amount equal to 15 days' wages last drawn by a retrenched worker. The Code connects to the other three Labour Codes: the Code on Wages, 2019, the Occupational Safety, Health and Working Conditions Code, 2020, and the Code on Social Security, 2020.
A significant change is the new definition of "industry" in Section 2(p), which, while borrowing from the 1978 "triple test" established in Bangalore Water Supply v A Rajappa, expressly excludes institutions run by charitable organizations and activities connected to the government's sovereign functions. The Code also provides statutory recognition to a single Negotiating Union or Negotiating Council for collective bargaining in establishments with multiple unions.