The Industrial Relations Code, 2020

Which Acts does the Code replace?

The Code replaces three central laws: Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946; and Industrial Disputes Act, 1947.

How are ‘industry’ and ‘worker’ defined under this Code?

‘Industry’ is defined as any systematic activity carried on through the co-operation between an employer and worker for the production, supply or distribution of goods or services, with a ‘view to satisfy human wants or wishes’. 

‘Worker’ is described as any person – except an ‘apprentice’, as defined in the Apprentices Act, 1961 – employed in an industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, and also includes working journalists, as defined in the Working Journalists and other Newspaper Employees and Miscellaneous Provisions Act, 1955.

What does the Code say about Trade Unions?

The Code defines a Trade Union as any organisation, whether temporary or permanent, formed primarily for regulating the relations between workers and employers, workers and workers, or employers and employers, or for imposing restrictive conditions on the conduct of any trade or business.

If more than one Trade Union is registered under this Code as functioning in an industrial establishment, the union with the support of 51 per cent or more workers shall be recognised as the sole negotiating union of the workers. If no such Trade Union has 51 per cent or more of workers, then a negotiating council shall be constituted by the employer. The council shall consist of representatives drawn from the various registered unions, which have the support of at least 20 per cent of workers who are on the establishment’s muster roll.

What is a 'standing order'?

These are orders relating to matters set out in the Code’s First Schedule. Such matters include classifying workers as permanent, temporary, apprentices, probationers, and more; the manner of intimating the periods and hours of work, holidays, pay-days and wage rates, to workers; attendance and coming late; working in shifts; procedures for applying for leave and holidays; closing sections of the industrial establishment, temporary stoppages of work, and the rights and liabilities of the employer and workers arising from such events; termination of employment; suspension or dismissal for misconduct; means of redress for workers against unfair treatment by the employer or their agents; and any other matter which may be specified by the government.

The central government shall make model standing orders relating to conditions of service for every industrial establishment with 300 or more workers.

Employers shall prepare draft standing orders within six months of the date of commencement of the Code. They shall consult the industrial establishment’s Trade Unions or negotiating council in preparing the draft before forwarding it to the certifying officer – as appointed under this Code. The officer may decide whether any modifications are to be made in the order before certifying it.

What is the mechanism for resolving industrial disputes according to the Code?

The ‘appropriate Government’ (centre or state) may appoint conciliation officers – in a specified area or for specific industries in an area – who shall mediate and promote the settlement of industrial disputes.

The government may also constitute one or more Industrial Tribunals for adjudicating industrial disputes and performing other functions assigned to them under this Code. 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. A bench of the Tribunal shall consist of a Judicial and an Administrative Member, or single Judicial or Administrative Member.

The Code says that if the central government feels that certain industrial disputes involve questions of national importance, or if industrial establishments in more than one state are likely to be affected by the dispute, then it may constitute one or more National Industrial Tribunals to adjudicate such a dispute.

What does the Code say about strikes and lock-outs?

The Code defines a strike as a cessation of work by a body of persons employed in any industry ‘acting in combination’, or the concerted refusal of any number of persons who are or have been so employed to continue to work or to accept employment. It also includes instances where 50 per cent or more workers employed in an industry take 'concerted casual leave'.

According to Section 62 of the Code, no person employed shall go on strike without giving a notice within 60 days before striking, within 14 days of giving such notice, before the date of strike specified in the notice, and during any period in which a settlement or award is in operation – among other conditions. If an employer receives any such notice, they shall report it to the ‘appropriate Government’ or an authority appointed by it, within five days.

A strike or lock-out shall be illegal, if it is started or declared in contravention of Section 62, or continued in contravention of an order made under Section 42 (7), which says that the 'appropriate Government' may prohibit the continuance of any strike or lock-out if the industrial dispute has been referred to arbitration.

What does the Code say about lay-offs?

A lay-off is defined as the failure, refusal or inability of an employer to give employment to a worker due to a shortage of coal, power or raw materials, the accumulation of stocks, the break-down of machinery, a natural calamity, or any other connected reason.

Section 67 of the Code says that if a worker (other than a badli or a casual worker) who has completed a year or more of continuous service is laid-off – continuously or intermittently – they shall be paid compensation for all days that they are laid-off, except weekly holidays. The compensation shall be equal to 50 per cent of the total of the basic wages and dearness allowance payable to them had they not been laid off by the employer. The provisions of this Section shall apply to any industrial establishment – except seasonal establishments, or those in which work is performed only intermittently – in which 300 workers or more were employed on an average working day in the preceding 12 months.

Focus and Factoids by Sayani Rakshit.