Industrial Relations Code, 2020: A Complete Overview for Employers & HR Professionals

Introduction

The Industrial Relations Code, 2020 is a landmark reform introduced by the Government of India to consolidate and modernize laws relating to trade unions, employment conditions, and industrial disputes. It replaces and merges key legislations such as the Trade Unions Act, Industrial Employment (Standing Orders) Act, and Industrial Disputes Act into a single framework.

This Code aims to bring simplicity, transparency, and efficiency in managing industrial relations while balancing the interests of employers and workers.

Key Objectives of the Code

• Simplify multiple labour laws into a single unified legislation 
• Promote ease of doing business 
• Ensure fair dispute resolution mechanisms 
• Strengthen trade unions and collective bargaining 
• Enhance industrial harmony and productivity 

Applicability of the Code

The Code applies to all industrial establishments across India, with specific provisions based on employee strength:

Provision	Applicability
Works Committee	100+ workers
Grievance Redressal Committee	20+ workers
Standing Orders	300+ workers

Trade Union Provisions

Registration Criteria

• Minimum 7 members required 
• At least 10% of workers or 100 workers (whichever is less) must be members 

Key Highlights

• Recognition of Negotiating Union/Council 
• A union with 51% support becomes the sole negotiating union 
• If no union meets the threshold, a negotiating council is formed 

Benefits

• Legal recognition 
• Protection from civil and criminal liability in certain cases 
• Structured collective bargaining process 

Grievance Redressal Mechanism

Every establishment with 20 or more workers must form a Grievance Redressal Committee (GRC).

Features:

• Equal representation of employer and employees 
• Maximum 10 members 
• Must include adequate representation of women 
• Resolution timeline: 30 days 

If unresolved, the matter can be escalated to:
Conciliation Officer
Industrial Tribunal

Works Committee

Applicable to establishments with 100 or more workers, this committee:

• Promotes employer-employee harmony 
• Addresses day-to-day workplace concerns 
• Prevents disputes at an early stage 

Standing Orders

Applicable to establishments with 300 or more workers.

Key Requirements:

• Employers must define service conditions in writing 
• Must cover:
  • Work hours 
  • Leave policies 
  • Misconduct rules 
  • Disciplinary procedures 

Timeline:

• Draft standing orders must be submitted within 6 months 

Industrial Dispute Resolution Mechanism

The Code provides a structured approach:

Step-by-Step Process:

1. Grievance Redressal Committee 
2. Conciliation Officer 
3. Industrial Tribunal 
4. National Industrial Tribunal (for national importance cases) 

Arbitration

• Disputes can be voluntarily referred to arbitration 
• Binding award ensures quicker resolution 

Industrial Relations Code 2020 (FAQ)
1	Is a fixed-term employee engaged for 11 months eligible for gratuity upon contract expiry? Is gratuity payable where a fixed-term employee exits before completion of the contracted tenure?	Fixed Term Employee (FTE) will be eligible for gratuity if he/she renders service under the contract for a period of one year (from start of contract).

Conclusion: Industrial Relations Code – A Progressive Step Forward by Pragnaa

The Industrial Relations Code marks a significant evolution in India’s labour law framework, aiming to strike a balanced approach between employer flexibility and employee protection. By consolidating existing laws and introducing clarity in areas such as dispute resolution, union recognition, and retrenchment norms, the Code creates a more structured and transparent industrial environment.

From Pragnaa’s perspective, this reform is not just about compliance—it is about building sustainable industrial harmony. Organizations must view the Code as an opportunity to strengthen workplace relationships, improve communication mechanisms, and adopt fair labour practices. Proactive implementation, supported by strong internal policies and awareness, will be key to unlocking its full potential.

As businesses navigate this transition, the focus should remain on compliance readiness, employee engagement, and risk mitigation. With the right approach, the Industrial Relations Code can serve as a foundation for long-term growth, productivity, and a resilient workforce ecosystem.At Pragnaa, we believe that aligning with evolving labour laws is essential not only for legal adherence but also for fostering a future-ready and people-centric organization.