Industry always remains a core aspect in the development of any country. In lines to that India has an elaborate cluster of various industries and clearly remains a labour-intensive country. Therefore, laws and policies regarding to this subject is very dynamic and important.

Labour is mentioned under the concurrent list thereby giving powers to both the state and the central governments to enact various laws according to the needs of the area. There were roughly 100 state laws and 40 central laws that regulate various aspects of the Labour like the industrial dispute, workmen’s compensation, social security, minimum wages etc.

The Second Labour Commission (2002), in its study concluded that the existing legislation was too cumbersome, complex and the existing definitions needed to be reviewed and changed. Hence, to ensure the uniformity and ease of grouping and compliance, it was decided to classify these laws under the umbrella of wages, social security, industrial relations, safety and welfare and working conditions.

The breakthrough came in the year 2019, when the Ministry of Labour and employment introduced four bills to consolidate 29 central laws. The code regulated-

  1. Wages
  2. Industrial Relations
  3. Social Security
  4. Occupational Safety, Health and working Conditions.

The three major acts that were amalgamated and simplified to form the Industrial Relations Code, 2020 are namely-

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

All the Bills were passed by the Parliament on September 19, 2020.


  • The central government will be Appropriate Government for certain industries like railways, textiles, mining, telephone and banking. Even if the shareholding of the central government is less than 50 % in any of the central public sector undertaking (PSU), then too the Centre remains the appropriate government for it.
  • The 2020 bill states that the offences punishable worth imprisonment of 1 year are with penalty can be compoundable. For the offenses that attract fine, it would be compoundable to 50% of the maximum amount of fine provided. For offences that include imprisonment, the compounding would be up to 75%. In case of the bill for Occupational Safety, the compounding is 50% where ‘penalty’ will be levied and 75% where there is offence.
  • Standing orders relating to matters of classification of workers, the procedure of informing the workers about the holidays, wages, pay scale, paydays, termination of employment, redressal of grievances have to be prepared in accordance with the code in any establishment that employs at least 300 workers.
  • Retrenchment, layoff and closure in any establishment employing at least 300 workers can only take place by prior permission of the government.
  • The threshold for the negotiation council was lowered to 51% members registered as workers and in case no negotiation council is formed then the trade union with 10% members as workers will be the negotiation council.
  • Individual worker can approach the Industrial tribunal for adjudication of dispute regarding discharge, dismissal, retrenchment or otherwise termination of services.
  • The definitions were broadened to include interstate migrant workers, contract workers, platform workers, then also audio-visual productions were to include talk shows, reality shows, web serials etc.
  • The threshold for workers in factory was increased by stating that there should be 20 workers in premises that use power and 40 workers in a premise that does not use power. In case of hazardous work being carried out then there are no minimum workers specified.
  • The 2020 bill prohibits employment of contract labourers for the core activities of the establishments and the appropriate government is given the power to specify whether the given work id a core activity or not excluding sanitization and security services.
  • The daily work limit is 8 hours per day and in case of women working in hazardous establishments, then the employer may be required to provide adequate safeguard to their employment.


It is very much taken into notice that the laws regarding the labor are very lengthy and cumbersome due to which grouping and making them uncomplicated was a very important task. The laws not only deal with the dispute between the employers and the employee or the employees amongst themselves but also deals with the Social Security, health, safety, compensation, ages rights and duties that are necessary for each worker to work in a safe environment so that it benefits both him and the employer both at the same state.

It is very necessary for both the employer and the employee to know the rules and regulations properly and to know how to interpret the law for the benefit and the wellbeing of both the parties therefore the amalgamation of the cumbersome laws into the industrial relation code simplifies it to a major extent, also the expansion and the widening of the scope of several definitions also brings to welfare too many other classes of workers who were previously exempted from this rights and eligibilities.

This also this code majorly also gives a greater flexibility for the employers in hiring and firing the workers and it also provides a Social Security net to the informal workers though not completely and it also recognizes the new category of workers and also does a little influence on the trade unions.

Therefore with the introduction of the Industrial Relations Code of 2020 we can say that the government has tried to bring in a balance between the rights and duties and the remedies available both for the employers as at the same time to the employees for the smooth functioning of the industry which in turn plays a major part in the strengthening and the development of the economy of the country.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

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We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

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