The Industrial Relations Code 2020 strengthens collective bargaining and streamlines labour regulations to promote harmony, flexibility, and workforce security nationwide.
New Delhi
The Industrial Relations Code, 2020 significantly enhances India’s labour framework by expanding worker protections, simplifying compliance, and strengthening mechanisms for dispute resolution and collective bargaining, an official statement said on Sunday. Designed to bring greater clarity and uniformity to labour regulations, the Code seeks to create a balanced environment that supports both workforce security and business efficiency.
A key reform introduced under the Code is the expansion of the definition of worker to include sales promotion employees, working journalists, and supervisory staff earning up to ₹18,000 per month. This move ensures that a larger segment of India’s workforce gains access to statutory labour rights and social security benefits. The National Commission on Labour had long recommended the rationalisation and simplification of existing labour laws, and the consolidation of three major legislations — the Industrial Disputes Act (1947), the Trade Unions Act (1926), and the Industrial Employment (Standing Orders) Act (1946) — into a single, streamlined code marks a major step forward.
According to the statement, the Industrial Relations Code aims to promote industrial peace by balancing the need for strong worker safeguards with the operational flexibility required by businesses. It simplifies compliance by introducing uniform definitions, reducing ambiguity across the board, and improving the ease of doing business.
The Code also undertakes a major overhaul of regulatory requirements. It reduces the number of rules from 105 to 51, forms from 37 to 18, and completely eliminates the requirement of maintaining physical registers. These reductions are expected to significantly lower compliance burdens and encourage employment generation. Workers also stand to gain from expanded access to benefits such as healthcare and sick leave.
Additionally, the Code broadens the definition of industry to include any systematic activity carried out through cooperation between employers and workers, regardless of capital investment or profit motive. This expansion brings a wide range of non-profit and low-capital organisations under the purview of labour protections, ensuring more inclusive coverage.
