Industrial Relations Code, 2020
Context:
National Commission on Labour highlighted a need to rationalise and simplify the exiting labour laws with an aim to protects interests of the workers.
Accordingly, the government has consolidated three existing labour laws into the Industrial Relations Code, 2020.
The code amalgamates the following 3 acts:
Key Provisions & Changes
The Code seeks to promote industrial harmony by balancing worker protection with business flexibility and facilitating ease of Doing Business.
Now, the rules has been reduced from 105 to 51, number of forms from 37 to 18 and number of registers from 3 to zero, thereby reducing the overall compliance burden to spur employment.
Uniform Definitions:
“Worker” expanded to include working journalists, sales promotion employees, and supervisory staff earning up to ₹18,000/month.
Wages: A unified definition applies across all labour codes with a 50% ceiling on exclusions (allowances cannot exceed 50% of total pay) to prevent artificial wage splitting.
“Industry” includes any systematic activity involving cooperation between employer and worker (includes non-profit and low-capital activities.)
Statutory recognition to the Trade Unions:
A union with 51% membership in an establishment can be categorised as a Negotiating Union with exclusive rights to represent workers in collective bargaining and grievance redressal.
If no single union meets this, a Negotiating Council is formed with representatives from unions having at least 20% membership.
Fixed-Term Employment (FTE):
Employers can hire workers for a specific duration directly.
These workers are entitled to the same benefits (wages, hours, social security) as permanent employees (including gratuity after one year of service)
Strikes and Lockouts:
The definition of strike now includes mass casual leave by more than 50% of workers.
A mandatory 14-day prior notice is required for strikes in all establishments to prevent flash strikes.
Increased Thresholds:
Industrial establishments with up to 300 workers (previously 100) can now lay off, retrench, or close without prior government permission.
Worker Re-skilling Fund:
Employers must contribute 15 days last drawn wages to a fund for every retrenched worker within 45 days to aid their upskilling.
Significance:
The code aims to balance worker rights with business flexibility.
It reduces compliance burdens (fewer registers and forms) while ensuring social security and faster dispute resolution through two-member Industrial Tribunals.