Industry Bill

The Industrial Relations Code, 2020


Introduced by

Mr. Santosh Kumar Gangwar

Minister of State for Labour and Employment


The bill proposes to ease labor laws to promote setting up of more enterprises which would create job opportunities in the country.

The main objective is to  simplify labor rules into 4 broad categories – Code on Wages, Social Security, Industrial Relations and Occupational Safety and Health


Salient Points ()

The bill proposes to amalgamate three acts -  The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947

The bill provides provision for re-skilling fund for benefit of employees who are being laid-off by the employer

General changes

2019 Version2020
Central government will govern any and all PSUs (public sector undertakings)One additional thing is added to the 2019 version. Central government will govern any and all PSUs (public sector undertakings) even if its holding in the company becomes less than 50%.
Central government will have full control industries - railways, mines, telecom, and banking. There is a addition of 'controlled industry' to the list of industries will be controlled by central government.
Settling of offence (with or without imprisonment) was allowed with 50% of maximum fine provided for the offence.Settling of offence is compounded at 50% of maximum fine and 75% , for offences with imprisonment.

Standing order/Pre-approved order

2019 Version2020
Establishment with 100 workers or more need to prepare standing order - a) worker classification, b) holiday payout, c) working hours details, d) wage rate, e) termination of employee, f) grievances Standing order is required for companies having worker strength of at least 300.
Central government was allowed to make any provisions for companies having less than 100 employees.This provision is removed
Standing order instructions remain same even if the threshold strength goes below 100.The bill removes this provision.

Layoffs and retrenchment

2019 version2020
Prior permission of central government was required to lay-offs, retrenchment of employees if the strength is above 100.The prior permission for layoff , retrenchment is required if the employee strength is above 300.
The government had the right to increase or decrease the threshold for establishments for layoffs or retrenchment.The government can only increase the threshold for establishments for layoffs or retrenchment.

Negotiating Union

2019 version2020
If there are more than 1 union in the organization, the union with more than 75% workers would be considered as the sole negotiator for everyone.The union strength reduced to 51% of workers of the organization.
Union council will be formed with 10% of workers as member, if no sole union is eligible for negotiation.The workers representation in the council has been increased to 20%.


Background Basics ()

The industrial trade needs streamlining of laws for generation of higher revenue and creation of employment opportunities

Many companies view these trade unions as threats and negotiating with them becomes too much of a pain.

Many employees becomes prey to unfair tactics and unjust practices prevalent in the organizations.


Key Stats ()

# of trade unions in India


# of members in trade union

9.18 million


19 Sep 2020
22 Sep 2020
23 Sep 2020

WHY (as per the govt)

Salient Points ()

This will  simplify and harmonize several differences in definitions and application of labor laws across industry, states and companies.


Ease of labor laws will promote setting up   more enterprises

WHY NOT (as per opposition)

Salient Points ()

The codes provide the liberty to industrial establishments to hire and fire their employees at will.

The bill prohibits strikes and lockouts which is the fundamental  right of workers



Videos ()


Controlled industry is defined as any industry on which the control of the Union has been declared by any Central Act in public interest. Example – Occupational Safety.

Lay-off refers to an employer’s inability to continue giving employment to a worker in the face of adverse business conditions.

Retrenchment refers to the termination of service of a worker for any reason other than disciplinary action.



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