Effective November 21, 2025, India’s Industrial Relations Code 2020 redefines how employers and employees interact, negotiate, resolve conflicts, and maintain workplace harmony. This legislation focuses on structured dialogue, fair procedures, and mutual respect—not just compliance.
What is the Industrial Relations Code?
This code consolidates and modernizes 3 outdated labour laws into one comprehensive framework governing:
- Trade union formation & operations
- Collective bargaining & negotiations
- Dispute resolution mechanisms
- Strikes & lockouts procedures
- Worker representation & protection
Core Philosophy: Industries thrive when workers feel heard, respected, and treated fairly. This code creates structures for that to happen.
4 Pillars of the Code
PILLAR 1: TRADE UNION RIGHTS
Workers Can Now:
- Form trade unions (10% membership minimum)
- Elect democratic leadership
- Negotiate collectively
- Represent members’ interests
- Access workplace for recruitment
- Demand employer negotiations
Union Rights:
- Official recognition by employer
- Workplace access for organizing
- Protected time for union activities
- Information sharing with employer
- Participation in safety/welfare committees
Employer Cannot:
- ❌Discriminate against union members
- ❌ Interfere with union activities
- ❌ Prevent membership drives
- ❌ Retaliate against union leaders
- ❌ Deny negotiations
Example: If a union wants to represent workers, employer must negotiate, even if it’s inconvenient.
PILLAR 2: COLLECTIVE BARGAINING
What Is Collective Bargaining?
Collective bargaining under the industrial relations code 2020 ensures workers negotiate as a group rather than individually, strengthening fairness and balance. When workers (through union/representation) negotiate as a group with employer on:
- Wages & salaries
- Working hours & shifts
- Leave & holidays
- Safety measures
- Job security
- Benefits & allowances
How It Works:
- Union submits collective demands
- Employer & union negotiate
- Settlement reached (ideally)
- Implementation by specific date
- Grievance resolution if issues
Worker Benefit: Individual workers don’t negotiate alone—collective power ensures fair terms.
Example: Instead of workers accepting whatever salary offered, they collectively demand ₹5% raise, which employer must discuss seriously.
PILLAR 3: DISPUTE RESOLUTION MECHANISM
This structured dispute resolution framework is one of the most impactful reforms introduced by the industrial relations code 2020, reducing timelines drastically.
Step 1: Grievance Raised
- Worker submits written complaint
- Covers any unfair treatment
- Supervisor/HR receives complaint
Step 2: Internal Discussion (7-14 days)
- Informal resolution attempt
- Both parties present views
- Try to find mutual agreement
Step 3: Formal Grievance (If unresolved)
- Written submission to management
- Higher authority reviews
- Investigation if needed
- Response within 7-14 days
Step 4: Conciliation (If still unresolved)
- Neutral third party involved
- Both sides present case
- Mediator suggests solutions
- Binding if both agree
Step 5: Arbitration (Final step)
- Single arbitrator appointed
- Formal hearing
- Evidence presented
- Binding award issued
Timeline: Complete resolution ideally within 21 days (urgent) to 45 days (complex).
Key Improvement: Much faster than previous courts/tribunals (which took 3-5 years).
PILLAR 4: STRIKES & LOCKOUTS
Strikes (Workers’ Right to Strike)
What is a strike?
Workers collectively stop work to pressure employer into accepting demands or protesting unfair treatment.
Legal Requirements:
- 14 days advance notice
- Majority worker support (vote)
- Cannot strike during conciliation
- Cannot strike for political causes
- Cannot strike without legitimate demand
Worker Protection:
- ✅ Cannot be terminated for striking
- ✅ Cannot be discriminated against
- ✅ Protected from lockout retaliation
- ✅ Can return to job after settlement
Illegal Strikes:
- ❌ Without proper notice
- ❌ Without majority support
- ❌ During essential services (partial)
- ❌ For non-work-related causes
Lockouts (Employer’s Right)
What is a lockout?
Employer temporarily closes workplace to pressure workers or prevent more damage.
Legal Requirements:
- 14 days advance notice
- Valid reason (not just avoiding negotiation)
- Cannot be used as harassment
- Must follow due process
Employer Obligations:
- ✅ Give notice & reason
- ✅ Follow dispute procedures first
- ✅ Cannot use indefinitely
- ✅ Must negotiate in good faith
Worker Protection:
- ✅ Still entitled to wages during lockout (in certain cases)
- ✅ Cannot be used punitively
- ✅ Must end when settlement reached
Standing Orders: New Requirement
Standing orders are a mandatory compliance element under the industrial relations code 2020, ensuring transparency in employment conditions.
What Are Standing Orders?
These are written rules covering all employment aspects. Every employer must display them clearly.
Must Include:
- Classification of Workers
- Permanent, temporary, casual, seasonal
- How each classified
- Conditions for each category
- Wages & Payment Method
- How wages calculated
- Deduction rules
- Payment date & method
- Overtime rates
- Working Hours
- Daily hours
- Weekly hours
- Shift timings
- Overtime compensation
- Holidays & Leave
- Weekly rest days
- Public holidays
- Casual leave entitlement
- Sick leave policy
- Annual leave policy
- Special leave (maternity, bereavement, etc.)
- Conduct & Discipline
- Expected behavior standards
- Prohibited conduct
- Dress code (if applicable)
- Punctuality requirements
- Confidentiality obligations
- Suspension & Termination
- Grounds for suspension
- Grounds for termination
- Notice period required
- Severance payment
- Appeal process
- Grievance Procedure
- How to file grievance
- Timeline for resolution
- Authority to decide
- Appeal mechanism
- Overtime & Rest
- Mandatory rest periods
- Compensation for overtime
- Choice of payment/leave
Legal Requirement: Must be displayed in local language where workers can see it.
Penalty for Non-Compliance: ₹1-5 lakh + potential criminal prosecution.
Protected Categories
Workers Cannot Be Discriminated Against For:
- ❌ Union membership or activities
- ❌ Reporting safety issues
- ❌ Filing genuine grievances
- ❌ Attending union meetings
- ❌ Protecting rights under this code
- ❌ Gender, caste, religion, disability (existing protections continue)
- ❌ Whistleblowing on violations
If Discriminated Against:
- ✅ File grievance immediately
- ✅ Protected from termination
- ✅ Get compensation for losses
- ✅ Can demand reinstatement
Unfair Labor Practices (Prohibited)
Employer Cannot:
❌ Against Unions:
- Interfere with formation or activities
- Discriminate in hiring/firing based on union membership
- Force workers to join/not join unions
- Threaten workers for union activities
❌ Against Individual Workers:
- Retaliate for filing grievances
- Refuse to negotiate with union
- Force workers to sign away legal rights
- Penalize for refusing illegal work
- Punish for accidents/injuries
❌ Other:
- Victimize safety complainants
- Refuse access to workplace for union
- Dismiss without due process
- Deny wages for legitimate reasons
Remedy: Workers can file complaint to labor authority for investigation & compensation.
Specific Provisions for Different Sectors
Industrial Establishments (10+ workers):
- Full code application
- Standing orders mandatory
- Safety committee required
- Works committee for grievances
Service Sector (10+ workers):
- Code applies (new)
- Standing orders required
- Grievance mechanism mandatory
- Union recognition allowed
Construction Sector:
- Project-specific provisions
- Worker welfare board involvement
- Portable benefits
- Simplified dispute resolution
Transport and Logistics:
- Shift-specific provisions
- Night work regulations
- Mandatory rest periods
- Emergency provisions
Compliance For Employers: Step – By – Step
MONTH 1: Preparation
- Review current policies
- Identify gaps in compliance
- Prepare standing orders
- Review grievance procedures
- Establish works committee
MONTH 2: Implementation
- Display standing orders (in local language)
- Communicate with all workers
- Train supervisors on new procedures
- Set up grievance mechanism
- Establish union recognition process
MONTH 3: Monitoring
- Ensure compliance in all departments
- Address grievances promptly
- Document all procedures
- Prepare audit trail
- Regular communication with workers
Ongoing:
- Maintain updated records
- Resolve grievances within timelines
- Participate in collective bargaining in good faith
- Follow all dispute procedures
- Regular worker communication
What Workers Should Know
You Have the Right to:
- Organize
- Form/join trade union
- Elect representatives
- Participate in union activities
- Bargain Collectively
- Demand wage negotiations
- Present collective grievances
- Negotiate working conditions
- Grievance Protection
- File formal complaints
- Get fair hearing
- Appeal unfair decisions
- Protected from retaliation
- Strike (Legally)
- Stop work with notice
- Demand fair compensation
- Protected from termination
- Information Access
- Know standing orders
- Understand grievance process
- Access employment records
- Know your rights
Dispute Resolution Timeline
Day 1: Grievance filed
Day 7: Internal discussion
Day 14: Formal grievance if unresolved
Day 21: Conciliation hearing
Day 35: Arbitration hearing begins
Day 45: Award issued (maximum)
Total: Up to 45 days vs. 3-5 years in courts!
Frequently Asked Questions
Q: Can employer prevent workers from forming a union?
A: No. It’s a legal right. Preventing it is an unfair labor practice.
Q: What if employer refuses to bargain?
A: File complaint to labor authority. Failure to bargain in good faith is violation.
Q: Can I be fired for striking?
A: No (if done legally). Firing for legal strike is unfair practice.
Q: How long can a lockout last?
A: Until settlement or 60 days (whichever is earlier), unless extended.
Q: Can non-unionized workers use this code?
A: Yes! Individual workers can file grievances & access dispute resolution.
Building Harmonious Workplaces
Success Formula:
- Transparent Communication
- Regular updates to workers
- Open-door policy
- Clear policies
- Fair Procedures
- Follow standing orders
- Consistent discipline
- Prompt grievance resolution
- Worker Respect
- Acknowledge concerns
- Participate in decisions
- Fair compensation
- Union Engagement
- Recognize legitimate unions
- Negotiate in good faith
- Work toward settlements
- Continuous Improvement
- Act on feedback
- Improve working conditions
- Regular dialogue
Result: Reduced conflict, higher productivity, better reputation, talent attraction.
Conclusion
The Industrial Relations Code 2020 is not anti-business—it is pro-fairness. By introducing clarity, speed, and structured engagement, it reduces uncertainty and enables organizations to focus on growth instead of disputes. The industrial relations code 2020 does not eliminate conflicts; it structures them productively, creating trust-driven and resilient workplaces.
Organizations that embrace this code early build cultures of:
- Trust & respect
- Fair treatment
- Quick problem resolution
- Worker loyalty
- Sustainable growth
The code doesn’t eliminate conflicts—it structures them productively.
ProCURE HR: Your IR Compliance Partner
We help organizations comply with the industrial relations code 2020 by:
- Develop standing orders
- Set up grievance mechanisms
- Train on union recognition
- Prepare for negotiations
- Document compliance
- Handle disputes effectively
Build industrial harmony: sales@procurehr.com
Other Major Labour Codes in India
To ensure end-to-end compliance under the industrial relations code 2020, employers must also understand how this legislation works in alignment with other key labour reforms introduced in India.
- Code on Wages, 2019 – Now Live
- Code on Social Security, 2020 – Now Active
- Occupational Safety, Health & Working Conditions Code, 2020 – Effective Now
Understanding how these labour codes operate together with the Industrial Relations Code 2020 is essential for building compliant, resilient, and future-ready organizations.