What is the Code on Industrial Relations, 2020?

National Affairs

What is the Code on Industrial Relations, 2020?

29 Jul 2023 Zinkpot 193

Code on Industrial Relations, 2020 is one of the four labor codes that were passed by the Parliament in September 2020 as a part of a measure to consolidate the multitude of labor laws in the country.
The three laws were combined in this code:
- Trade Union Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
This code expands the definition of worker to include people employed in a skilled or unskilled, manual, technical, operational, and clerical capacity.
Besides, persons employed in a supervisory capacity and earning less than Rs. 18,000 per month have been brought under this definition.
The code introduces a new provision for fixed-term employment, giving employers the flexibility to engage a worker on the basis of a written contract. Fixed-term employees will get the same benefits as permanent employees.
The minimum number of workers employed for an establishment to have standing orders has been raised to 300. With the increased threshold, it becomes more flexible and easier to hire and fire, thus leading to increased employment according to the government.
This new industrial relation code allows firms with up to 300 workers to go ahead with layoffs, retrenchment, and closure without government permission.
The code also introduces new conditions for conducting a legal strike. Employees have been prohibited from going on strike without giving a 60-day notice.
Employees are also prohibited from going on strike during the pendency of proceedings before a tribunal or National Industrial Tribunal. They should also not go on strike before 60 days are completed after the tribunal proceedings.
The new code also proposes the setting up of a re-skilling fund for training retrenched workers with a contribution from the employer of an amount equal to 15 days, last drawn by the worker.
As per this code, if there is more than one registered trade union of workers functioning in an establishment, the trade union having more than 51% of the workers as members would be recognized as the sole negotiating union.
In case no trade union is eligible as a sole negotiating union, a negotiating council will be formed consisting of representatives of unions that have at least 20% of the workers as members.
Despite the agreement in the parliament over the four labor codes, the implementation of these codes has been stalled. These codes, striving to bring comprehensive changes to India’s job market, have been both praised and criticised in equal measures.