Act 35 of 2020 · in force 21 November 2025
Industrial Relations Code, 2020
Unions, standing orders, disputes — one code.
Merges the Trade Unions Act, Standing Orders Act and Industrial Disputes Act. It resets how unions are recognised, when standing orders apply, and the thresholds for lay-off, retrenchment and closure.
Industrial establishments and workers as defined in the Code, including a widened definition of ‘worker’ and industry, with notified exclusions.
Armed Forces, police, prison services, and establishments notified as to be treated otherwise. Certain charitable / sovereign functions may fall outside ‘industry’.
What changed
Establishments with 300 or more workers need prior permission of the appropriate Government for lay-off, retrenchment and closure. Standing orders apply from 300 workers (states may lower this).
A union with 51% membership becomes the sole negotiating union. Otherwise a negotiating council of unions with at least 20% membership is constituted.
Fixed-term employees are entitled to the same wages, allowances and statutory benefits as permanents doing the same or similar work, including gratuity on a proportionate basis.
No strike or lock-out without 14 days’ notice. Flash strikes in all industrial establishments — not only public utilities — are restricted.
Section 2(l)
Industry
Industry means any systematic activity carried on by co-operation between an employer and workers for production, supply or distribution of goods or services with a view to satisfy human wants, whether or not any capital has been invested or such activity is carried on with a motive to make any gain or profit.
Charitable purpose is not, by itself, a safe harbour if there is organised employer–worker co-operation.
Section 2(zr)
Worker
A person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms are express or implied. Supervisors drawing wages above a notified ceiling, and persons mainly in a managerial or administrative capacity, are excluded.
Job titles do not decide status. Duties and the wage ceiling do.
Section 6–9
Registration
A trade union may be registered with a minimum of 10% of workers or 100 workers, whichever is less, subject to a floor of 7 workers. The Registrar may require alterations to the name or rules.
Registration is a right, not a favour. Victimising a worker for union activity remains an unfair labour practice.
Section 14
Negotiating union or council
Where there is a registered union with 51% or more workers as members, it is the sole negotiating union. If not, the employer must constitute a negotiating council of unions that have at least 20% membership.
You cannot pick a ‘favourite’ minority union if another holds 51%.
Section 28–30
Application of standing orders
The standing-orders chapter applies to industrial establishments with 300 or more workers (the appropriate Government may lower the threshold). Model standing orders notified by the Government apply until certified standing orders are in place.
If you cross 300 (or a lower state threshold), certify standing orders. Until then, the model orders bind you.
Section 62
Prohibition of strikes and lock-outs without notice
No person employed in an industrial establishment shall go on strike without giving 14 days’ notice. No employer shall lock-out without 14 days’ notice. Strikes during conciliation and tribunal proceedings are restricted.
A surprise lock-out is equally constrained. Serve the notice; keep the proof.
Section 77–80
Lay-off, retrenchment, closure — the 300 threshold
For industrial establishments with 300 or more workers (mines, factories, plantations as specified), prior permission of the appropriate Government is required for lay-off, retrenchment and closure. Compensation rules (15 days’ average pay per completed year for retrenchment, plus notice) continue.
Crossing 299 is a labour-strategy event, not just a headcount. States may notify a different number.
Section FTE
Fixed-term employment
A fixed-term employee is engaged on a written contract for a specified period. They are entitled to the same hours, wages, allowances and statutory benefits as a permanent employee doing the same or similar work, and to gratuity on a proportionate basis if they serve one year.
Do not use rolling FTEs to dodge permanency if the work is perennial — tribunals still look at substance.
Definitions
- Strike
- Cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal under a common understanding to continue to work or to accept employment. Includes stay-in, sit-down, go-slow, and mass casual leave.
- Retrenchment
- Termination by the employer of the service of a worker for any reason other than as a punishment inflicted by way of disciplinary action — with specified exclusions (voluntary retirement, superannuation, non-renewal of contract, continued ill-health).
- Fixed-term employment
- Engagement of a worker on the basis of a written contract of employment for a specified period.
Penalties
| Offence | First | Repeat |
|---|---|---|
| Illegal strike or lock-out | Fine, and in some cases imprisonment, as provided in the Code | Enhanced penalty for subsequent offences |
| Closure / retrenchment without permission where required | Fine which may extend to ₹1,00,000 | Imprisonment and/or higher fine; closure may be treated as illegal |
| Unfair labour practice | Fine up to ₹50,000 (illustrative; see the schedule of ULPs) | Enhanced fine / imprisonment |
Subsumed acts
- Trade Unions Act, 1926Now read inside this code
- Industrial Employment (Standing Orders) Act, 1946Now read inside this code
- Industrial Disputes Act, 1947Now read inside this code
Questions people actually ask
Can my factory of 180 workers close without government permission?
Under the IR Code the prior-permission threshold is 300, unless your state notifies a lower number. Notice and compensation still apply below 300. Always check the state notification.
Is a go-slow a strike?
Yes. The Code’s definition of strike includes go-slow, stay-in and mass casual leave.
Do fixed-term staff get gratuity?
Yes, on a proportionate basis, if they complete one year on a fixed-term contract — see also the Social Security Code.
From the Gazette Library · 3 source documents
Source: Industrial Relations Code (Removal of Difficulties) (Amendment) Order, 2026 — S.O. 464(E) dated 02.02.2026 · ·
Source: Industrial Relations Code (Amendment) Act, 2026 (Act 1 of 2026), assented 16.02.2026 · ·
Source: Industrial Relations Code, 2020 (Act 35 of 2020), with commencement notification S.O. 5320(E) dated 21.11.2025 · ·
- Existing statutory authorities under the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947 continue to function until such authorities are appointed under the Industrial Relations Code, 2020
- Tribunals and statutory authorities under the repealed Acts continue to function until the corresponding Tribunals and authorities under the Code become functional
- 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 under section 1(3) — 21 November 2025, the date S.O. 5320(E) appointed for the whole Code
- The Industrial Relations Code (Amendment) Act, 2026 — Act No. 1 of 2026, assented to on 16 February 2026, deemed in force from 21 November 2025
- All provisions in force from 21 November 2025
- Extends to the whole of India
- The Industrial Relations Code, 2020 — Act No. 35 of 2020, assented to on 28 September 2020
Plain-language guide to the four labour codes, not a substitute for the Gazette, state rules, or advice from an advocate. Thresholds and schemes can still be notified or varied by the appropriate Government.