Labour Law in India


Labour law reform


The Second National Commission on Labour, which submitted its report in June 2002, had recommended that the existing set of labour laws should be broadly amalgamated into the following groups, namely:—

(a) industrial relations;
(b) wages;
(c) social security;
(d) safety; and
(e) welfare and working conditions.

2- In pursuance of the recommendations of the said Commission and the deliberations made in the tripartite meeting comprising of the Government, employers’ and industry
representatives, it has been decided to bring the proposed legislation. The proposed legislation intends to amalgamate, simplify and rationalise the relevant provisions of the following three central labour enactments relating to industrial relations, namely:—
(a) the Trade Unions Act, 1926;
(b) the Industrial Employment (Standing Orders) Act, 1946; and
(c) the Industrial Disputes Act, 1947.

3. The amalgamation of the said laws will facilitate the implementation and also remove the multiplicity of definitions and authorities without compromising on the basic concepts of welfare and benefits to workers. The proposed legislation, namely, the Industrial Relations Code, 2019 would bring the use of technology in its enforcement. All these measures would bring transparency and accountability which would lead to more effective enforcement. The facilitation for ease of compliance of labour laws will promote in setting up of more enterprises thus catalysing the creation of employment opportunities.

4. The salient features of the Industrial Relations Code, 2019, inter alia, are as follows:—
(a) to define the expression “fixed term employment” to mean engagement of a
worker on the basis of a written contract of employment for a fixed period. The fixed
term employee will get all statutory benefits like social security, wages, etc., at par with
the regular employee who is doing work of same or similar nature;

(b) to define the term “industry” with certain exceptions;

(c) the definition of “strike” is proposed to be modified to include mass casual leave within its ambit;

(d) to define the term “worker” to include persons in supervisory capacity getting wages up to fifteen thousand rupees within its ambit. At present, under the Industrial Disputes Act, 1947, definition of ‘worker’ includes person in supervisory capacity getting salary up to ten thousand rupees per month;

(e) to provide for the obligation on the part of the industrial establishment pertaining to mines, factories and plantation having one hundred or more workers to take prior permission of the appropriate Government before lay-off, retrenchment or closure. However, the appropriate Government is proposed to be empowered to modify such threshold number of workers by notification;

(f) to set up a re-skilling fund for training of retrenched employees, to which the employers will pay a contribution of fifteen days wages or such other days as may be notified by the Central Government in case of retrenchment of workers;

(g) to provide for a sole negotiating union in an industrial establishment for negotiating with the employer of the industrial establishment, on such matters as may be provided by rules. In case of more than one Trade Union of workers, a Trade Union
would be designated as a sole negotiating union if it has support of seventy-five per cent. or more of the workers on the muster roll in an establishment and if no Trade Union has such support strength on the muster roll of an establishment, then a negotiating council will be constituted for negotiation;

(h) to provide for Industrial Tribunal to be the adjudicating body to decide appeals against the decision of the conciliation officer in place of multiple adjudicating bodies like Court of Inquiry, Board of Conciliation and Labour Courts;

(i) the maximum number of members in the Grievance Redressal Committee has
been increased from six to ten;

(j) provisions are being made to have two member Industrial Tribunals, with
second member being from administrative side, in place of single member Labour
Court and Industrial Tribunal at present. Further, the Tribunal will be empowered to
execute the award as a decree of a civil court, which will facilitate speedy disposal of

(k) to provide for continuation of services of Presiding Officers of the existing adjudicating authorities;

(l) to provide that reference by the Government will not be required for Industrial Tribunal, except the National Industrial Tribunal;

(m) to prohibit strikes and lockouts in any industrial establishment without giving notice of fourteen days and also during the pendency of conciliation proceedings;

(n) to provide for penalties for different types of violations to rationalise with such offences and commensurate with the gravity of the violations;

(o) to empower the appropriate Government to appoint officers for holding enquiry and impose penalty in certain contraventions punishable with fine up to fifty thousand rupees;

(p) to provide for compounding of offences which are not punishable with imprisonment.

5.The notes on clauses explain in detail the various provisions contained in the Bill.

6.The Bill seeks to achieve the above objectives.


Old laws repealed

(1) In the notification issued under sub-section (3) of section 1 for the
commencement of any provision of this Code, the Central Government may specify that the provisions of —
(a) the Trade Unions Act, 1926;
(b) the Industrial Employment (Standing Orders) Act, 1946; and
(c) the Industrial Disputes Act, 1947,

shall stand repealed with effect from the date appointed in the notification in this behalf and the remaining provisions of the enactments referred to in clauses (a) to (c) shall remain in force till they are repealed by like notifications in the like manner.


Key Definitions

“industry” means any systematic activity carried on by co-operation between
an employer and worker (whether such worker is employed by such employer directly
or by or through any agency, including a contractor) for the production, supply or
distribution of goods or services with a view to satisfy human wants or wishes (not
being wants or wishes which are merely spiritual or religious in nature), whether or
not, —
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, but does not include—
(i) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service;
(ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or
(iii) any domestic service; or
(iv) any other activity as may be notified by the Central Government;

“industrial dispute” means any dispute or difference between employers
and employers or between employers and workers or between workers and workers
which is connected with the employment or non-employment or the terms of
employment or with the conditions of labour, of any person and includes any dispute
or difference between an individual worker and an employer connected with, or arising out of discharge, dismissal, retrenchment or termination of such worker;


Industrial tribunal for dispute resulation- labour court abolished

The appropriate Government may, by notification, constitute one or more
Industrial Tribunals for the adjudication of industrial disputes and for performing such other functions as may be assigned to them under this Code and the Tribunal so constituted by the Central Government shall also exercise the jurisdiction, powers and authority conferred on the Tribunal, as defined in clause (m) of section 2 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 by or under that  Act.

(2) Every Industrial Tribunal shall consist of two members to be appointed by the
appropriate Government out of whom one shall be a Judicial Member and the other, an Administrative Member.

(3) A bench of the Tribunal shall consist of a Judicial Member and an Administrative
Member or single Judicial Member or single Administrative Member.

(4) A person shall not be qualified for appointment as the Judicial Member of a
Tribunal, unless he—

(a) is, or has been or is qualified to be, a judge of a High Court; or
(b) has, for a period of not less than three years, been a District Judge or an Additional District Judge.



LS passed Industrial Relations Code, Occupational Safety Health & Working Conditions Code, & Social Security Code 2020

Categories: Labour Law in India

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