Comparison Between the Old Labour Laws and the Industrial Relations Code, 2020

The Industrial Relations Code, 2020 represents a major reform in India’s labour regulatory system governing employer-worker relationships. The legislation consolidates three earlier labour laws into a single framework aimed at simplifying compliance while strengthening mechanisms for industrial harmony.

Before the introduction of the Code, industrial relations were governed by separate statutes including the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. While these laws played an important role in protecting worker rights, they also created fragmented regulatory structures.

The Industrial Relations Code, 2020 introduces structural changes such as recognition of negotiating unions, revised thresholds for layoffs and retrenchment approvals, standardized strike procedures, and faster dispute resolution mechanisms.

Understanding how the Industrial Relations Code, 2020 compares with earlier labour laws is essential for employers, compliance professionals, and trade unions preparing for implementation.

Introduction

India’s industrial relations framework has evolved over nearly a century. Earlier labour laws were enacted during different economic and political contexts, each addressing specific aspects of employer-worker relations.

Over time, this resulted in multiple overlapping regulations governing trade unions, employment conditions, and industrial disputes.

For employers, the fragmented legal framework often meant navigating multiple compliance processes. For workers, dispute resolution mechanisms could be slow and complex.

The Industrial Relations Code, 2020 was introduced to address these challenges by integrating several industrial relations laws into a unified regulatory framework. The objective is to create a more balanced system that promotes industrial peace, efficient dispute resolution, and economic growth.

Why Labour Law Reform Was Needed

India’s earlier industrial relations framework created several structural challenges.

Some of the key issues included:

• fragmented legal provisions across multiple statutes
• inconsistent procedures for union recognition
• lengthy dispute resolution processes
• regulatory rigidity affecting workforce flexibility

These challenges often resulted in prolonged litigation and administrative complexity.

The Industrial Relations Code, 2020 attempts to modernize this framework while maintaining worker protection mechanisms.

Earlier Industrial Relations Framework in India

Before the introduction of the Industrial Relations Code, 2020, industrial relations were governed by three separate laws.

Key Laws Governing Industrial Relations

Law	Area Covered
Trade Unions Act, 1926	Registration and regulation of trade unions
Industrial Employment (Standing Orders) Act, 1946	Employment conditions and workplace rules
Industrial Disputes Act, 1947	Dispute resolution, layoffs, and retrenchment

Each of these statutes had its own compliance processes, regulatory authorities, and procedural requirements.

Key Differences Between Old Laws and the Industrial Relations Code, 2020

The Industrial Relations Code, 2020 introduces structural changes aimed at simplifying the regulatory framework

Key Comparison

Aspect	Old Laws	Industrial Relations Code, 2020
Union recognition	Multiple unions without verification	Negotiating union with 51% support
Standing orders	Applicable to smaller establishments	Threshold increased to 300 workers
Layoff approval	Required for 100+ workers	Required for 300+ workers
Grievance mechanisms	Informal or ad hoc	Mandatory committees
Strike rules	Strict only for public utilities	14-day notice for all establishments
Tribunal structure	Multi-member tribunals	Single-member tribunals

These changes aim to streamline industrial relations processes.

Trade Union Recognition: Old vs New Framework

Under the earlier legal framework, multiple unions could operate within the same establishment without clear mechanisms for determining negotiating authority.

This often resulted in rivalry between unions and complicated collective bargaining processes.

The Industrial Relations Code, 2020 introduces a structured mechanism for union recognition.

Negotiating Union Rules

• If only one union exists, it becomes the negotiating union.
• If multiple unions exist, the union with 51% worker support becomes the negotiating union.
• If no union meets this threshold, a negotiating council may be formed.

This system aims to ensure more stable collective bargaining arrangements.

Standing Orders: Changes in Applicability

Standing orders define employment conditions such as working hours, leave policies, and disciplinary procedures.

Under the Industrial Employment (Standing Orders) Act, 1946, establishments employing 100 or more workers were required to maintain certified standing orders.

The Industrial Relations Code, 2020 increases this threshold to 300 workers, except for certain sectors such as mines and plantations.

For smaller establishments, draft standing orders may be deemed to apply.

This change is intended to reduce compliance burdens for smaller businesses.

Industrial Dispute Resolution Reforms

The Industrial Relations Code, 2020 introduces several reforms to improve dispute resolution efficiency.

Key Reforms

• establishment of single-member industrial tribunals
• introduction of time-bound dispute resolution processes
• recognition of disputes related to termination or dismissal

Workers may approach industrial tribunals within 45 days after conciliation proceedings conclude.

The Code also encourages voluntary arbitration, allowing disputes to be resolved without prolonged litigation.

Strike and Lockout Regulations

Another major change introduced by the Industrial Relations Code, 2020 relates to strike and lockout procedures.

Under earlier laws, strike notice requirements primarily applied to public utility services.

The new Code requires 14 days’ prior notice for strikes across all establishments.

Strikes are also prohibited during conciliation proceedings.

These provisions aim to reduce sudden disruptions while preserving workers’ right to collective action.

Worker and Employer Impact

The reforms introduced by the Industrial Relations Code, 2020 affect both employers and workers.

Impact on Employers

Employers may benefit from:

• increased workforce flexibility
• higher thresholds for layoffs and retrenchments
• simplified compliance processes

Impact on Workers

Workers may benefit from:

• structured grievance redressal systems
• faster dispute resolution mechanisms
• clearer union representation frameworks

However, some labour groups have expressed concerns regarding the increased thresholds for regulatory approvals in smaller establishments.