Introduction

The Industrial Relations Code, 2020 represents a watershed moment in India’s labour law framework, consolidating three major legislations—the Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946, and the Industrial Disputes Act 1947—into a unified code.[1] This legislative consolidation seeks to streamline dispute resolution under the Industrial Relations Code, 2020 through enhanced conciliation, arbitration, and industrial tribunals while balancing the interests of employers and workers in an evolving economic landscape. The Code, passed by the Parliament in September 2020, introduces significant reforms to the adjudicatory and conciliatory frameworks that have governed industrial relations in India for over seven decades.

At the heart of the Industrial Relations Code lies a three-tier dispute resolution architecture designed to address conflicts at various stages before they escalate into protracted legal battles. This system comprises preventive mechanisms through bi-partite forums, conciliatory processes involving government-appointed officers, and adjudicatory bodies empowered to deliver binding awards. Understanding these mechanisms is crucial for employers, workers, trade unions, and legal practitioners navigating the complexities of industrial relations in contemporary India.

Understanding Industrial Disputes Under the Industrial Relations Code, 2020

The Industrial Relations Code defines an industrial dispute as any dispute or difference between employers and employers, between employers and workers, or between workers and workers, which is connected with employment, non-employment, terms of employment, or conditions of labour. Significantly, the Code expands this definition to include disputes relating to the discharge, dismissal, retrenchment, or termination of individual workers, thereby granting them direct access to dispute resolution forums without requiring collective representation.[2] This represents a departure from the previous regime where individual grievances required collective support to be recognized as industrial disputes.

The scope of what constitutes an “industry” under the Code has been shaped significantly by judicial interpretation, particularly the landmark Supreme Court judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa (AIR 1978 SC 548).[3] In this case, a seven-judge Constitution Bench established the “triple test” to determine whether an entity qualifies as an industry: there must be systematic activity, cooperation between employers and workers, and production or supply of goods or services to satisfy human needs. The Court held that the absence of profit motive or the philanthropic nature of an undertaking does not disqualify it from being classified as an industry. This expansive interpretation ensures that workers across diverse sectors, including governmental bodies providing essential services, educational institutions, and hospitals, are protected under industrial relations laws.

The Three-Tier Dispute Resolution Architecture under the Industrial Relations Code, 2020

Preventive Mechanisms: Bi-Partite Forums

The first tier of dispute resolution under the Industrial Relations Code, 2020 emphasizes prevention through internal mechanisms that encourage dialogue between employers and workers before conflicts escalate. The Code mandates the establishment of two critical bi-partite forums that serve as the first line of defense against industrial unrest.

Works Committees are required in industrial establishments employing one hundred or more workers. These committees consist of equal representation from employers and workers, with worker representatives chosen in consultation with registered trade unions where they exist. The primary duty of Works Committees is to promote measures for securing and preserving amicable relations between employers and workers, commenting on matters of common interest and endeavoring to compose material differences of opinion. This forum provides a structured platform for addressing concerns before they develop into formal disputes requiring external intervention.

Grievance Redressal Committees represent an even more accessible mechanism, mandated for every industrial establishment employing twenty or more workers. These committees must have equal representation from employers and workers, with the chairperson alternating between employer and worker representatives on a rotational basis each year. The Code specifically requires adequate representation of women workers proportionate to their employment in the establishment. An aggrieved worker may file an application before the Grievance Redressal Committee within one year of the cause of action arising, and the committee must complete its proceedings within thirty days of receiving the application. If dissatisfied with the committee’s decision or if no resolution is reached within the stipulated timeframe, a worker may approach the conciliation officer within sixty days, either directly or through their trade union.

Conciliatory Processes: The Role of Conciliation Officers

When preventive mechanisms fail to resolve disputes, the second tier of the dispute resolution framework comes into play through conciliation proceedings. The appropriate government appoints conciliation officers who are charged with the duty of mediating and promoting the settlement of industrial disputes. These officers may be appointed for specified areas, specified industries, or for one or more industries, either permanently or for limited periods, providing flexibility in addressing regional and sectoral needs.

Conciliation proceedings are deemed to have commenced on the date when the first meeting is held by the conciliation officer after receipt of notice of a strike or lockout. The conciliation officer must investigate the dispute without delay and all matters affecting its merits and right settlement, with authority to do all things deemed fit for inducing parties to reach a fair and amicable settlement. The officer possesses significant powers under the Code, including the same powers vested in a civil court for enforcing attendance of persons, examining them under oath, and compelling production of documents.[4]

The Code imposes strict timelines on conciliation proceedings. If a settlement is reached, the conciliation officer sends a report to the appropriate government along with a memorandum of settlement signed by the parties. If no settlement is achieved, the officer must send a full report within forty-five days of commencing proceedings, or within fourteen days if the conciliation relates to a notice of strike or lockout. These time limits may be extended only with the written agreement of the concerned parties and approval of the conciliation officer. Importantly, conciliation officers cannot hold proceedings relating to industrial disputes after two years from the date the dispute arose, ensuring that stale grievances do not burden the system indefinitely.

Adjudicatory Bodies: Industrial Tribunals and National Industrial Tribunals

The third and final tier of dispute resolution involves adjudication by Industrial Tribunals and National Industrial Tribunals. The Industrial Relations Code has abolished Labour Courts and Courts of Inquiry, consolidating adjudicatory functions under a streamlined tribunal system designed to deliver faster and more specialized justice in industrial matters.

Industrial Tribunals are constituted by the appropriate government for adjudication of industrial disputes. Each tribunal consists of two members—a Judicial Member and an Administrative Member—appointed by the appropriate government. The qualifications, recruitment methods, terms of office, and other service conditions are specified through rules, with the proviso that only persons who have held posts at the rank of Joint Secretary or above in government are eligible for appointment as Administrative Members. A bench of the tribunal may consist of both members sitting together, or a single Judicial Member or Administrative Member sitting alone, depending on the nature of the dispute.

Complex cases involving standing orders, discharge or dismissal of workers, legality of strikes or lockouts, retrenchment and closure, and trade union disputes are heard by a two-member bench consisting of both Judicial and Administrative Members. Other disputes may be decided by a single-member bench, facilitating expeditious disposal. The Judicial Member presides over benches where both members sit together. Decisions are made by consensus, but if members differ in opinion, the matter is referred to the appropriate government, which appoints a Judicial Member from another tribunal to hear the point in dispute. The decision is then made according to the majority view of all members who have heard the case.

National Industrial Tribunals are constituted by the Central Government for adjudication of disputes involving questions of national importance or where industrial establishments in more than one state are likely to be interested or affected. These tribunals also consist of two members—a Judicial Member who must be or have been a High Court Judge, and an Administrative Member who must be or have been a Secretary to the Government of India or an equivalent rank with adequate experience in labour matters. The National Industrial Tribunal follows procedures similar to Industrial Tribunals but addresses disputes with wider ramifications across state boundaries.

Voluntary Arbitration as an Alternative

Recognizing the benefits of alternative dispute resolution, the Industrial Relations Code introduces provisions for voluntary reference of disputes to arbitration. Where an industrial dispute exists or is apprehended, and both the employer and workers agree, they may refer the dispute to arbitration through a written agreement specifying the arbitrator or arbitrators. If an even number of arbitrators is appointed, the agreement must provide for an umpire who will decide if the arbitrators are equally divided.

A copy of the arbitration agreement must be forwarded to the appropriate government and the conciliation officer. If the appropriate government is satisfied that the persons making the reference represent the majority of each party, it may issue a notification giving non-parties concerned with the dispute an opportunity to present their case before the arbitrator. The Code specifically excludes the application of the Arbitration and Conciliation Act 1996 to arbitrations conducted under its provisions, maintaining a specialized regime for industrial disputes distinct from commercial arbitration.

Arbitration awards become enforceable thirty days after communication to the parties and the appropriate government, unless the government declares that giving effect to the award would be inexpedient on public grounds affecting national economy or social justice. Such declarations must be followed by an order accepting, rejecting, or modifying the award within ninety days, with the order laid before the legislature. This provision, while controversial, balances industrial autonomy with broader public policy considerations.

Regulatory Framework and Procedural Safeguards

Strikes and Lockouts: Enhanced Restrictions

The Industrial Relations Code introduces stricter regulations governing strikes and lockouts compared to its predecessor legislation. Workers must provide notice of strike at least fourteen days but not more than sixty days before striking. Strikes are prohibited during conciliation proceedings and for seven days thereafter, during proceedings before tribunals or arbitrators and for sixty days after conclusion of such proceedings, and during any period when a settlement or award is in operation. Employers face parallel restrictions on lockouts, requiring them to give similar notice and observe the same prohibition periods.

The Code expands the definition of “strike” to include “concerted casual leave on a given day by fifty per cent or more workers employed in an industry,” addressing a practice that previously fell into a grey area of the law. This provision has generated debate regarding its impact on workers’ fundamental right to freedom of association, particularly when proceedings extend for prolonged periods. In B.R. Singh v. Union of India (1989) 4 SCC 710, the Supreme Court had observed that the right to strike is an important weapon in the workers’ armory and that restrictions on this right could considerably reduce the bargaining power of trade unions.[5] The expanded prohibitions under the Code must be viewed against this constitutional backdrop.

Powers and Procedures of Adjudicatory Bodies

Industrial Tribunals and National Industrial Tribunals possess extensive powers to ensure effective adjudication. They have the same powers as civil courts regarding enforcement of attendance, compelling production of documents, issuing commissions for examination of witnesses, and other prescribed matters. All inquiries before these bodies are deemed judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code, providing serious consequences for false evidence or interference with proceedings.

Where a tribunal finds that discharge, dismissal, or termination of a worker was unjustified, it may set aside the order and direct reinstatement on such terms as it deems fit, or grant other relief including award of lesser punishment. During pendency of disputes, tribunals may grant interim relief in the interest of justice, relying only on materials on record without taking fresh evidence. This power ensures that workers are not left in financial distress during prolonged adjudication processes.

The Code mandates that where a tribunal orders reinstatement and the employer appeals to higher courts, the employer must pay the worker full wages last drawn during the pendency of proceedings in the High Court or Supreme Court, provided the worker files an affidavit that he was not employed elsewhere during this period. This provision, upheld in various judicial pronouncements, protects workers from the hardship of prolonged litigation while maintaining an employer’s right to appeal.

Settlements and Awards: Binding Nature and Enforcement

Settlements arrived at during conciliation proceedings or through written agreements between employers and workers outside conciliation proceedings have binding effect once properly recorded and communicated. Similarly, arbitration awards and tribunal awards become enforceable thirty days after communication unless the appropriate government exercises its power to defer enforcement on grounds of national economy or social justice.

Awards remain in operation for one year from the date they become enforceable, though the appropriate government may reduce this period or extend it for additional periods not exceeding one year at a time, with total operation not exceeding three years. Settlements continue in operation for the period agreed by parties, or if no period is specified, for six months from signing, continuing thereafter until sixty days after one party gives notice of intention to terminate.

Both settlements and awards bind all parties to the industrial dispute, parties summoned to appear in proceedings (unless the tribunal records they were summoned without proper cause), successors and assigns of employers, and all workers employed in the establishment on the date of dispute and those subsequently employed. This comprehensive binding nature ensures industrial peace and prevents individual workers from subsequently challenging collective agreements or awards.

The Code provides mechanisms for recovery of money due to workers under settlements or awards. Workers may apply to the appropriate government for recovery, which issues a certificate to the Collector who recovers the amount as an arrear of land revenue. Applications must be made within one year of the money becoming due, though this period may be extended for sufficient cause. Where disputes arise regarding the amount due or the money value of benefits, the tribunal decides such questions within three months, extendable for recorded reasons.

Special Provisions: Individual Worker Disputes

One of the most significant innovations in the Industrial Relations Code, 2020 is the recognition that disputes relating to discharge, dismissal, retrenchment, or termination of individual workers constitute industrial disputes regardless of whether any trade union is party to the dispute. This provision democratizes access to justice for individual workers who previously required collective support to invoke industrial adjudication machinery.

An individual worker aggrieved by termination may first approach the Grievance Redressal Committee in their establishment. If dissatisfied with the committee’s decision or if no decision is reached within thirty days, the worker may approach the conciliation officer within sixty days. Significantly, the worker may directly approach the Industrial Tribunal for adjudication after forty-five days from making an application for conciliation, without waiting for the conciliation process to conclude or requiring the appropriate government to make a reference. This provision removes governmental discretion from individual termination disputes, expediting access to adjudication.

The application to the tribunal must be made within two years from the date of discharge, dismissal, retrenchment, or termination. This limitation period balances the need for timely dispute resolution with workers’ practical difficulties in arranging legal and financial resources immediately after termination. Where workers are represented by negotiating unions or councils, such representatives present the case; in their absence, trade unions represent workers, and if no union exists, workers choose representatives in the prescribed manner.

Critical Analysis and Emerging Jurisprudence

The Industrial Relations Code, 2020 attempts to modernize dispute resolution while retaining proven features of earlier legislation. The abolition of Labour Courts and consolidation under Industrial Tribunals aims to reduce forum shopping and accelerate adjudication. However, concerns have been raised about whether the two-member tribunal structure with both judicial and administrative members might lead to conflicts in decision-making, particularly given the diversity of perspectives such members bring.

The provision allowing the appropriate government to defer or modify tribunal awards on grounds of national economy or social justice has been criticized as potentially violating the separation of powers doctrine. The Madras High Court had struck down similar provisions in the Industrial Disputes Act on constitutional grounds, holding that executive power to modify judicial determinations amounts to sitting in appeal over tribunals and violates the basic structure of the Constitution. The Industrial Relations Code replicates this provision, potentially inviting similar constitutional challenges.

The expanded restrictions on strikes raise questions about compliance with international labour standards, particularly ILO Convention 87 on Freedom of Association. Requiring advance notice of fourteen to sixty days, prohibiting strikes during conciliation and for seven days thereafter, and for sixty days after tribunal proceedings may be seen as excessively restrictive, particularly when proceedings drag on for years. Balancing industrial peace with workers’ constitutional right to freedom of association remains a delicate challenge.

The Code’s recognition of fixed-term employment and increase in thresholds for various provisions (such as standing orders applying to establishments with 300 workers instead of 100, and retrenchment permissions required for establishments with 300 workers instead of 100) reflect efforts to provide greater flexibility to employers. Critics argue this dilutes worker protection, while proponents contend it will encourage formal employment by reducing compliance burdens on smaller establishments.

Conclusion

The Industrial Relations Code, 2020 represents a significant attempt to rationalize and modernize India’s industrial dispute resolution framework. By consolidating three major laws and introducing structured bi-partite forums, streamlined conciliation processes, and specialized tribunals, the Code seeks to balance efficiency with fairness. The recognition of individual worker disputes as industrial disputes, introduction of voluntary arbitration, and emphasis on time-bound resolution are progressive features that could reduce pendency and improve access to justice.

However, the Code’s success will ultimately depend on effective implementation, adequate training of adjudicatory personnel, and development of supporting infrastructure. Ensuring that tribunals function efficiently, conciliation officers are skilled mediators, and grievance redressal committees operate fairly will be crucial. The legal framework, however well-designed, can only be as effective as the institutions and individuals who implement it.

As India continues its economic transformation, the industrial relations system must adapt to accommodate diverse employment forms, technological changes, and evolving worker expectations while maintaining core protections that ensure dignity and fairness in the workplace. The Industrial Relations Code provides a foundation for this evolution, but continuous monitoring, assessment, and refinement based on practical experience will be essential to ensure it serves the interests of both employers and workers in building a harmonious and productive industrial ecosystem.

References

[1] Industrial Relations Code, 2020, Bill No. 120 of 2020. Available at: https://labour.gov.in/sites/default/files/ir_as_introduced_in_lok_sabha.pdf 

[2] PRS Legislative Research, “The Industrial Relations Code, 2020” (2020). Available at: https://prsindia.org/billtrack/the-industrial-relations-code-2020 

[3] Bangalore Water Supply and Sewerage Board v. A. Rajappa, AIR 1978 SC 548. Available at: https://www.casemine.com/commentary/in/defining-‘industry’-under-the-industrial-disputes-act:-comprehensive-analysis-of-bangalore-water-supply-and-sewerage-board-v.-a.-rajappa-and-others/view 

[4] Aditya Gaggar, “Decoding the Industrial Relations Code, 2020,” SCC Times (October 25, 2020). Available at: https://www.scconline.com/blog/post/2020/10/25/decoding-the-industrial-relations-code-2020/ 

[5] B.R. Singh v. Union of India, (1989) 4 SCC 710. Available at: https://www.livelaw.in/columns/the-industrial-relations-code-2020-implications-for-workers-rights-164921 

[6] Lakshmikumaran & Sridharan, “Industrial Relations Code, 2020 – An overview” (2020). Available at: https://www.lakshmisri.com/insights/articles/industrial-relations-code-2020-an-overview/ 

[7] Lexology, “Industrial Relations Code, 2020 – An overview” (October 2, 2020). Available at: https://www.lexology.com/library/detail.aspx?g=9b788606-d4bd-4197-b27f-468ab93f0797 

[8] PMC, “Imbalancing Act: India’s Industrial Relations Code, 2020” National Centre for Biotechnology Information. Available at: https://pmc.ncbi.nlm.nih.gov/articles/PMC9409614/ 

[9] Legal Service India, “Dispute Resolution Mechanisms: Enhancements In The Industrial Relations Code, 2020” (2024). Available at: https://www.legalserviceindia.com/legal/article-21149-dispute-resolution-mechanisms-enhancements-in-the-industrial-relations-code-2020.html 

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Introduction

Industrial relations in India have undergone significant transformation with the enactment of the Industrial Relations Code 2020, which introduces new restrictions and notice requirements for strikes and lockouts across all industries. This landmark legislation consolidates three major labour laws into a single framework, fundamentally altering how strikes and lockouts are regulated in Indian industries. The Code represents one of the most ambitious labour law reforms in recent decades, introducing stricter notice requirements and expanded restrictions that affect both workers and employers. Understanding these changes to strike and lockout regulations is crucial for maintaining industrial harmony while protecting the rights of all stakeholders in the employment relationship.

The regulation of strikes and lockouts has always been a delicate balancing act between protecting workers’ collective bargaining rights and ensuring industrial stability. The new Code attempts to strike this balance by imposing mandatory notice periods, prohibiting industrial action during certain proceedings, and extending restrictions beyond public utility services to all industrial establishments. These provisions mark a departure from the earlier regime under the Industrial Disputes Act, 1947, which had more limited application [2].

Historical Context and Legislative Evolution

The regulation of strikes in India dates back to the Trade Disputes Act of 1929, which first introduced restrictions on the right to strike in public utility services. The Industrial Disputes Act, 1947 further developed this framework by establishing detailed procedures for industrial dispute resolution and placing conditions on when workers could legally resort to strikes. Under the old regime, restrictions on strikes without prior notice applied primarily to establishments classified as public utilities, leaving other industrial establishments with greater flexibility.

The judiciary has consistently held that the right to strike is not a fundamental right under the Indian Constitution. In the landmark case of Kameshwar Prasad v. State of Bihar [3], decided in 1962, the Supreme Court clarified that while peaceful demonstrations fall within the protections of freedom of speech and assembly under Articles 19(1)(a) and 19(1)(b), the right to strike itself does not enjoy constitutional protection. The Court upheld restrictions on strikes by government employees, noting that such limitations serve the larger public interest.

This principle was reinforced in T.K. Rangarajan v. Government of Tamil Nadu [4], where the Supreme Court emphatically stated that government employees have no fundamental, statutory, or moral right to resort to strikes. The Court observed that strikes as a weapon are often misused, resulting in chaos and administrative breakdown, and that the interests of society cannot be held ransom to employee demands. These judicial precedents established the foundation for legislative restrictions on industrial action, recognizing strikes as a statutory right subject to reasonable regulations rather than an absolute entitlement.

The Industrial Relations Code 2020: Consolidation and Reform

The Industrial Relations Code, 2020 consolidates and repeals three central labour laws: the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947 [1]. Receiving Presidential assent on September 28, 2020, the Code aims to simplify compliance, promote ease of doing business, and create a more balanced framework for employer-employee relations. Despite its enactment, the Code awaits notification for its implementation, with the Central Government retaining discretion to bring different provisions into force at different times.

The Code comprises 106 sections organized into 14 chapters, covering various aspects of industrial relations including trade union registration, dispute resolution mechanisms, standing orders, and provisions relating to strikes and lockouts. One of the most significant changes involves redefining key terms and expanding the scope of regulations to encompass all industrial establishments, not merely those classified as public utilities.

The definition of strike under the Code includes cessation of work by a body of persons employed in any industry acting in combination, and significantly, it now encompasses concerted casual leave taken by fifty percent or more workers on a given day. This expanded definition addresses a common tactic where workers would simultaneously take casual leave to exert pressure on employers while technically not engaging in a strike. By bringing such coordinated absences within the ambit of strikes, the Code ensures that these actions are subject to the same notice requirements and restrictions.

Mandatory Notice Requirements for Strikes

One of the most substantial changes introduced by the Industrial Relations Code concerns the notice requirements for strikes. Workers planning to go on strike must now provide their employers with at least fourteen days’ advance notice before commencing any strike action [5]. This notice must specify the intended date of the strike and remain valid for a maximum period of sixty days from the date of notice. If workers wish to strike after the sixty-day validity period expires, they must issue fresh notice and wait another fourteen days.

The notice requirement serves multiple purposes within the industrial relations framework. First, it provides employers with adequate time to prepare for potential disruptions to production and services, allowing them to make alternative arrangements or take mitigating measures. Second, it creates a mandatory cooling-off period during which parties can attempt to resolve their differences through negotiation or conciliation. Third, it ensures that strikes do not occur impulsively but only after deliberate consideration and formal communication.

Under the previous regime of the Industrial Disputes Act, 1947, similar notice requirements existed but applied primarily to public utility services. Public utility services were defined narrowly to include railways, postal services, airports, hospitals, and other essential services where interruption would cause public hardship. The Industrial Relations Code extends these notice requirements to all industrial establishments, regardless of their classification, thereby subjecting a much broader range of employers and workers to these procedural safeguards [2].

The requirement of fourteen days’ notice represents a balance between providing workers sufficient time to organize collective action and giving employers reasonable warning. During this period, conciliation proceedings often commence, with conciliation officers appointed by the government attempting to mediate between the disputing parties. The notice period thus becomes an integral part of the dispute resolution mechanism, encouraging dialogue before resorting to direct action.

Parallel Notice Requirements for Lockouts

The Industrial Relations Code applies symmetrical notice requirements to lockouts initiated by employers. Just as workers must provide fourteen days’ notice before striking, employers must give fourteen days’ advance notice before declaring a lockout [5]. This parallel requirement ensures fairness in the regulation of industrial action, recognizing that lockouts can be as disruptive to workers as strikes are to employers.

A lockout, defined as the temporary closing of a place of employment or suspension of work by an employer, serves as management’s counterpart to a worker’s strike. Historically, employers have used lockouts to pressure workers into accepting management’s terms or to respond to threatened or actual strikes. The notice requirement prevents employers from suddenly closing establishments without warning, thereby protecting workers from unexpected loss of livelihood.

The principle of reciprocal obligations reflects a fundamental tenet of industrial relations law: both parties to the employment relationship bear responsibilities toward maintaining industrial peace. By imposing equivalent notice periods on both strikes and lockouts, the Code acknowledges that industrial harmony requires restraint and good faith from employers and workers alike.

Employers who receive notice of a strike or who issue notice of a lockout must report this fact to the appropriate government authority and the conciliation officer within five days. This reporting requirement enables government authorities to monitor industrial disputes and intervene through conciliation machinery before situations escalate. The involvement of conciliation officers at this early stage increases the likelihood of disputes being resolved through negotiation rather than through protracted strikes or lockouts.

Prohibited Periods for Industrial Action

Beyond the notice requirements, the Industrial Relations Code, 2020 establishes specific periods during which strikes and lockouts are absolutely prohibited. These prohibitions aim to protect the integrity of dispute resolution processes and prevent industrial action from undermining formal mechanisms for settling disputes.

Workers and employers are prohibited from engaging in strikes or lockouts during the pendency of conciliation proceedings before a conciliation officer and for a period of seven days after the conclusion of such proceedings [6]. Under the Industrial Relations Code 2020, these notice requirements and restrictions on strikes and lockouts ensure that parties give conciliation a genuine opportunity to succeed without the threat or actuality of industrial action. Conciliation represents a structured attempt by a neutral third party to help disputing parties reach a voluntary settlement, and this process cannot function effectively if either party can resort to strikes or lockouts while talks are ongoing.

.Similarly, strikes and lockouts are prohibited during proceedings before a Labour Court, Industrial Tribunal, or National Industrial Tribunal, and for sixty days after the conclusion of such proceedings [6]. When disputes are formally referred to adjudication, parties submit themselves to a legal process for determining their rights and obligations. Allowing strikes or lockouts during this period would undermine the authority of these tribunals and create a parallel pressure tactic alongside the legal process.

The prohibition extends to periods when an arbitration proceeding is pending before an arbitrator, and for two months after the arbitration concludes, provided the parties have agreed to arbitration under the Code. Arbitration represents a voluntary dispute resolution mechanism where parties agree to submit their differences to a neutral arbitrator whose decision binds them. Maintaining industrial peace during arbitration respects the parties’ choice to resolve disputes through this alternative forum.

These temporal restrictions on strikes and lockouts existed in the Industrial Disputes Act, 1947, but applied primarily to public utility services and specific categories of disputes. The Industrial Relations Code 2020 significantly expands these prohibitions on strikes and lockouts to all industrial establishments, broadening the circumstances under which industrial action is illegal. This expansion reflects the legislature’s judgment that dispute resolution mechanisms deserve protection from disruptive industrial action across all sectors of the economy.

Consequences of Illegal Strikes and Lockouts

The Industrial Relations Code, 2020 prescribes significant penalties for violations of its strike and lockout provisions. Workers who commence, continue, or participate in illegal strikes face punishment including imprisonment for up to one month, fines up to fifty thousand rupees, or both. Employers who declare or continue illegal lockouts face imprisonment for up to one month, fines ranging from fifty thousand to one lakh rupees, or both [7].

These penalties represent a substantial increase from those prescribed under the Industrial Disputes Act, 1947, where fines for illegal strikes by workers could extend only to fifty rupees, and for employers, to one thousand rupees. The enhanced penalties in the new Code reflect inflation over the decades and signal a stronger deterrent intent. The legislature clearly aims to discourage parties from bypassing legal procedures and resorting to illegal industrial action.

Beyond criminal penalties, illegal strikes and lockouts carry civil consequences. Workers participating in illegal strikes and lockouts under the Industrial Relations Code 2020 lose their entitlement to wages for the strike period and may face disciplinary action, including dismissal from service. The Supreme Court in India General Navigation and Railway Company Ltd v. Their Workmen held that when workers engage in illegal strikes and lockouts, they forfeit any claim to wages or compensation and become subject to punishment through discharge or dismissal [8].

Persons who instigate, incite, or encourage others to participate in illegal strikes or lockouts commit a separate offense punishable with imprisonment for up to six months, fines up to one thousand rupees, or both. This provision addresses the role of union leaders, political activists, or other instigators who may not directly participate in industrial action but who play a crucial role in organizing and promoting it. By making instigation a distinct offense, the Code seeks to deter external interference in employer-employee relations.

The concept of illegality in strikes and lockouts depends on compliance with the statutory framework established by the Industrial Relations Code 2020. A strike or lockout becomes illegal if commenced or declared in contravention of the notice requirements for strikes and lockouts, if continued in violation of government orders, or if initiated during prohibited periods such as conciliation or tribunal proceedings. However, a lockout declared in consequence of an illegal strike, or a strike declared in consequence of an illegal lockout, does not automatically become illegal, recognizing the reactive nature of such actions under the Code [9].

Recognition of Negotiating Unions and Collective Bargaining

The Industrial Relations Code introduces important innovations in trade union recognition and collective bargaining. The Code establishes the concept of negotiating unions and negotiating councils, providing a structured framework for employer-union interactions. Where a single trade union exists in an industrial establishment, the employer must recognize that union as the sole negotiating union if it represents workers employed in the establishment. Where multiple unions exist, a union with support from fifty-one percent or more of the workers on the muster roll gains recognition as the negotiating union [5].

This recognition threshold of fifty-one percent ensures that the negotiating union represents a clear majority of the workforce, thereby strengthening its legitimacy in collective bargaining. Where no single union achieves this threshold, the Code provides for the formation of a negotiating council. Trade unions with support from at least twenty percent of the workers receive representation in the negotiating council, with the number of seats allocated proportionate to their membership strength.

The recognition of negotiating unions and councils creates a formal structure for collective bargaining, reducing confusion about which union or unions have the authority to negotiate with management. This clarity benefits both employers and workers by establishing predictable channels for discussing wages, working conditions, and other employment terms. The negotiating union or council becomes the primary voice of workers in dealings with the employer, including in situations involving potential strikes.

The relationship between union recognition and strike regulation is significant. Recognized negotiating unions typically serve as the entities that issue strike notices on behalf of workers. Their formal status gives them greater responsibility for ensuring that strikes comply with legal requirements, including notice periods and prohibitions during conciliation or adjudication. This institutional framework aims to make strikes more organized and less spontaneous, aligning with the Code’s overall emphasis on structured dispute resolution.

Threshold Changes for Government Approval

The Industrial Relations Code makes significant changes to the threshold at which employers must obtain government approval before implementing layoffs, retrenchment, or closure of establishments. Under the Industrial Disputes Act, 1947, establishments employing one hundred or more workers required prior government permission for these actions. The new Code raises this threshold to three hundred workers, substantially expanding the number of establishments that can implement such measures without government approval [5].

This threshold increase represents one of the most controversial aspects of the Industrial Relations Code. Proponents argue that it provides employers with greater flexibility to respond to market conditions, reducing bureaucratic delays and promoting ease of doing business. They contend that the previous threshold of one hundred workers was too low, particularly for medium-sized enterprises, and that raising it to three hundred workers allows more businesses to make necessary restructuring decisions without government interference.

Critics express concern that the higher threshold reduces protections for workers in establishments employing between one hundred and three hundred workers, who previously enjoyed the security of government scrutiny before layoffs or retrenchment. They argue that this change tilts the balance too far in favor of employers and may lead to increased job insecurity. The debate reflects the ongoing tension between promoting business flexibility and protecting worker rights.

For establishments employing three hundred or more workers, the requirement for prior government approval before layoffs, retrenchment, or closure remains in place. Employers must apply to the appropriate government authority, providing justification for the proposed action and complying with procedural requirements. During the approval process, the government considers factors including the reasons for the proposed action, its impact on workers, and whether the employer has complied with all legal obligations including notice periods and compensation.

Re-skilling Fund for Retrenched Workers

The Industrial Relations Code introduces an innovative provision requiring the creation of a re-skilling fund to support workers who face retrenchment. Employers must contribute to this fund an amount equal to fifteen days’ wages last drawn by each retrenched worker [5]. The fund aims to provide financial support and training opportunities to help displaced workers transition to new employment.

This provision represents a progressive approach to managing the social costs of economic restructuring. Rather than simply allowing employers to retrench workers with payment of statutory compensation, the Code creates a mechanism for investing in workers’ future employability. The re-skilling fund acknowledges that job loss often requires workers to acquire new skills to remain competitive in the labour market, particularly in industries undergoing technological change or economic transformation.

Implementation of the re-skilling fund requires clarification regarding its management, administration, and the specific programs it will support. The Code authorizes the appropriate government to prescribe rules regarding contributions from sources other than employers and the purposes for which the fund may be utilized. Questions remain about how workers will access re-skilling opportunities, what types of training programs will be offered, and how the effectiveness of these programs will be measured.

The creation of the re-skilling fund reflects a shift toward active labour market policies that focus not only on protecting workers from unfair dismissal but also on equipping them with tools for adaptation and mobility. This approach recognizes that in a dynamic economy, some degree of workforce adjustment is inevitable, but that society has an obligation to help workers navigate these transitions successfully.

Increased Penalties and Enhanced Enforcement

The Industrial Relations Code significantly increases penalties for various violations compared to the Industrial Disputes Act, 1947. First-time offenses relating to important provisions such as those governing layoffs, retrenchment, standing orders, and unfair labour practices attract fines up to ten lakh rupees [1]. Repeated offenses may result in fines up to twenty lakh rupees or imprisonment for up to six months, or both.

These enhanced penalties reflect the legislature’s determination to ensure compliance with industrial relations law. The substantial financial consequences of violations create strong incentives for employers to follow proper procedures, particularly regarding notice requirements, government approvals, and payment of compensation. For larger employers, the penalties remain proportionate to their size while for smaller establishments, they represent a significant deterrent.

The Code also addresses enforcement mechanisms by empowering labour inspectors to investigate complaints, examine records, and recommend prosecution for violations. The strengthened enforcement regime aims to move beyond the often-criticized weak implementation of labour laws, where statutory protections existed on paper but received inadequate enforcement in practice. Effective enforcement requires not only strong penalties but also adequate inspection infrastructure and political will to apply sanctions consistently.

However, questions persist about enforcement capacity, particularly given the large number of industrial establishments across India and the limited number of labour inspectors available to monitor compliance. The success of the enhanced penalty regime will depend substantially on whether governments invest in building enforcement capacity and whether they resist pressures to grant exemptions or look the other way when violations occur.

Impact on Industrial Harmony and Worker Rights

The Industrial Relations Code, 2020 provisions on strikes and lockouts generate diverse perspectives regarding their impact on industrial harmony and worker rights. Supporters argue that the Code promotes stability by establishing clear procedures, reducing ambiguity about when strikes are legal, and ensuring that both employers and workers follow structured dispute resolution processes. They contend that mandatory notice periods and prohibitions during conciliation or adjudication protect the integrity of these processes and encourage parties to resolve disputes through dialogue rather than confrontation.

Critics raise concerns that the extensive restrictions on strikes tilt the balance too far in favor of employers, potentially weakening workers’ bargaining power. They point out that extending strike prohibitions to all industrial establishments, rather than limiting them to public utilities, constrains workers’ ability to use collective action effectively. The requirement of fourteen days’ notice, while reasonable in principle, may allow employers to take preemptive measures such as hiring replacement workers or building inventory in anticipation of strikes, thereby reducing the effectiveness of this traditional labour weapon.

The inclusion of concerted casual leave within the definition of strike addresses a real problem where workers would collectively take leave to disrupt production while claiming they were not on strike. However, this provision also raises concerns about potential misuse, where legitimate simultaneous leave-taking by workers due to genuine reasons might be characterized as an illegal strike. The distinction between coordinated leave intended to pressure employers and coincidental leave-taking for legitimate purposes may not always be clear-cut.

From the perspective of industrial harmony, the Code’s emphasis on structured processes and negotiating unions has the potential to channel industrial conflict into more institutionalized and less disruptive forms. By creating clear procedures for union recognition, negotiation, and dispute resolution, the Code may reduce spontaneous or wildcat strikes in favor of more organized industrial action that follows legal requirements. This could benefit employers, workers, and society by making industrial relations more predictable and less prone to sudden disruptions.

Comparative Analysis with International Standards

International labour standards, particularly those established by the International Labour Organization, recognize workers’ right to organize and bargain collectively, including the right to strike as a means of defending their interests. ILO Convention 87 on Freedom of Association and Protection of the Right to Organise and Convention 98 on the Right to Organise and Collective Bargaining establish fundamental principles regarding workers’ collective rights, though they do not explicitly mention strikes.

The ILO’s Committee on Freedom of Association has consistently recognized the right to strike as a corollary of freedom of association, while acknowledging that this right is not absolute and may be subject to certain limitations. Acceptable restrictions include prohibiting strikes in essential services where interruption would endanger life, health, or safety, requiring advance notice and conciliation procedures, and prohibiting strikes during the term of collective agreements.

The Industrial Relations Code’s approach to strikes reflects some alignment with international standards by maintaining notice requirements and prohibiting strikes during dispute resolution processes. However, the expansion of restrictions to all industrial establishments, rather than limiting them to truly essential services, raises questions about compatibility with ILO principles that emphasize limiting strike restrictions to services where interruption would endanger the public.

India has ratified numerous ILO conventions but not Conventions 87 and 98, the core freedom of association conventions. The Industrial Relations Code’s provisions on strikes and collective bargaining should ideally be evaluated against both domestic constitutional principles and international best practices. Achieving an appropriate balance requires recognizing workers’ legitimate interests in collective action while accommodating employers’ need for operational stability and society’s interest in avoiding unnecessary disruption.

Conclusion

The Industrial Relations Code, 2020 represents a significant reform of India’s industrial relations framework, introducing new restrictions and notice requirements for strikes and lockouts that apply across all industrial establishments. By consolidating three major labour laws into a unified framework, the Code aims to simplify compliance, promote ease of doing business, and create clearer procedures for managing industrial conflict.

The mandatory fourteen-day notice requirement for strikes and lockouts, the prohibition on industrial action during conciliation and adjudication, and the enhanced penalties for violations reflect the legislature’s emphasis on structured dispute resolution and industrial stability. These provisions, combined with innovations such as negotiating union recognition and the re-skilling fund, create a modernized framework that seeks to balance the interests of employers, workers, and society.

However, the practical impact of these reforms will depend on implementation, enforcement, and how courts interpret the new provisions when disputes arise. The tension between protecting workers’ collective bargaining rights and promoting industrial harmony will continue to generate debate and require careful balancing in individual cases. As the Code awaits full implementation, stakeholders across the industrial relations landscape must prepare to adapt to this new regulatory environment while advocating for interpretations and applications that serve the ultimate goal of fair and productive workplace relations.

References

[1] Neeti Niyaman. (2025). Industrial Relations Code, 2020 Explained. Available at: https://neetiniyaman.com/industrial-relations-code-2020/ 

[2] iPleaders. (2021). Industrial Relations Code 2020: an overview. Available at: https://blog.ipleaders.in/industrial-relations-code-2020-an-overview/ 

[3] Supreme Court of India. (1962). Kameshwar Prasad and Others vs The State of Bihar and Another, AIR 1962 SC 1166. Available at: https://indiankanoon.org/doc/687159/ 

[4] Supreme Court of India. (2003). T.K. Rangarajan vs Government Of Tamil Nadu & Others, AIR 2003 SC 3032. Available at: https://indiankanoon.org/doc/88909580/ 

[5] Lawrbit. (2025). The Industrial Relations Code, 2020. Available at: https://www.lawrbit.com/article/industrial-relations-code-2020/ 

[6] Lakshmikumaran & Sridharan Attorneys. Industrial Relations Code, 2020 – An overview. Available at: https://www.lakshmisri.com/insights/articles/industrial-relations-code-2020-an-overview/ 

[7] Our Legal World. (2020). Strikes and Lockouts under Industrial Disputes Act, 1947. Available at: https://www.ourlegalworld.com/strikes-and-lockouts-under-industrial-disputes-act-1947/ 

[8] LawBhoomi. (2024). Strike and Lockout. Available at: https://lawbhoomi.com/strike-and-lockout/ 

[9] Legal Service India. Strike And Lock-Out Under Industrial Dispute Act 1947. Available at: https://www.legalserviceindia.com/legal/article-12602-strike-and-lock-out-under-industrial-dispute-act-1947.html 

Authorized and Published by Sneh Purohit

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