SYLLABUS
GS-3: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.
Context: Recently, the parliament passed the Industrial Relations Code Amendment Bill 2026 to remove ambiguity regarding the repeal of earlier labour laws replaced by the Industrial Relations Code 2020.
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- The Bill was introduced on February 11 2026, to amend the Industrial Relations Code, 2020.
- The Lok Sabha and Rajya Sabha passed the Industrial Relations Code Amendment Bill 2026 on February 12 2026.
- The Bill clarifies that the previous three Acts replaced by the Industrial Relations Code 2020 stand repealed from November 21, 2025.
- The government stated that the amendment aims to prevent future legal complications regarding repeal provisions.
Key Provisions of the Amendment
- The Bill substitutes Section 104(1) of the Industrial Relations Code, 2020.
- Section 104(1) of the Industrial Relations Code, 2020, outlines the repeal and savings provisions, specifying that the Central Government can notify the repeal of the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947.
- The amendment clarifies that the repeal occurred by operation of law itself on the date notified under Section 1(3) of the IR Code (i.e., 21 November 2025), not by executive delegation.
- It removes any scope for confusion that the repeal power was delegated to the executive.
The Industrial Relations Code, 2020
- It is a major labour law reform that consolidates and replaces three central statutes, namely –
- The Trade Unions Act, 1926, which dealt with registration and recognition of trade unions.
- The Industrial Employment Standing Orders Act, 1946, which regulated conditions of employment in industrial establishments.
- The Industrial Disputes Act, 1947, which governed the investigation and settlement of industrial disputes.
Key Highlights of the Industrial Relations Code, 2020
- Expanded Definitions:
- Worker: To ensure that more workers have access to basic labour rights, an inclusive definition of ‘worker’ has been established. The definition of ‘worker’ now explicitly includes sales promotion employees, working journalists, and supervisory staff earning up to ₹18,000 per month.
- Strike: The definition has been widened to include “mass casual leave” taken by 50% or more workers on a single day.
- Fixed-Term Employment (FTE): Formally introduces time-bound contracts where workers are entitled to the same wages and benefits as permanent employees, including pro-rata gratuity after one year of service.
- Higher Compliance Thresholds:
- Standing Orders: Only establishments with 300 or more workers (up from 100) are required to prepare formal standing orders governing employment conditions.
- Lay-offs & Retrenchment: Establishments with 300 or more workers must now seek prior government permission for lay-offs, retrenchment, or closure.
- Trade Union Recognition:
- Provides for a “Negotiating Union” or “Negotiating Council.” A union with 51% membership gets sole bargaining rights; if no union reaches this, a council is formed from unions with at least 20% membership.
- Worker Re-skilling Fund:
- A new requirement for employers to contribute an amount equal to 15 days’ wages for every retrenched worker to help them upgrade their skills for future employment.
- Dispute Resolution:
- Replaces single-member tribunals with two-member Industrial Tribunals (one judicial and one administrative member).
- Mandates a 60-day notice period for strikes and lockouts across all industries, not just public utilities.