Industrial Relations Code, 2020 – Latest Updates, Standing Orders, Retrenchment & HR Compliance Guide

By Guru Nageswara Rao

Industrial Relations Code, 2020 – Latest Updates, Standing Orders, Retrenchment & HR Compliance Guide

The Industrial Relations Code, 2020 is one of the four new labour codes introduced to consolidate and simplify laws governing industrial disputes, trade unions, standing orders, and conditions of employment.

This article provides a latest and practical explanation of the Industrial Relations Code with a focus on HR compliance, factory and establishment-level responsibilities, and industrial relations management.

1. Labour Laws Consolidated under the Industrial Relations Code

The Industrial Relations Code consolidates the following three major labour laws:

  • Industrial Disputes Act, 1947
  • Trade Unions Act, 1926
  • Industrial Employment (Standing Orders) Act, 1946

The objective of the Code is to create a balanced framework for employer–employee relations while ensuring industrial peace.

2. Applicability of the Industrial Relations Code

The Code applies to:

  • Factories and industrial establishments
  • All categories of workers as defined under the Code
  • Employers engaged in industrial and service sectors

Specific applicability thresholds and procedural requirements are subject to Central and State Rules notified under the Code.

3. Trade Unions – Registration and Recognition

The Code continues provisions relating to the registration of trade unions and introduces a framework for recognition of negotiating unions or negotiating councils.

Key points:

  • Trade unions must meet prescribed membership criteria
  • Concept of a sole negotiating union is introduced
  • Multiple unions may form a negotiating council where required

4. Standing Orders – Mandatory Employment Rules

Standing orders define service conditions such as classification of workers, working hours, leave, misconduct, disciplinary action, and termination procedures.

Under the Code:

  • Standing orders are mandatory for establishments above the notified threshold
  • Model Standing Orders may be prescribed by the Government
  • Employers must align HR policies with approved standing orders

HR Impact: Employment rules must be documented, communicated, and consistently implemented.

5. Layoff, Retrenchment and Closure – Key Compliance Changes

The Code regulates conditions relating to layoffs, retrenchment, and closure of establishments.

Important compliance aspects include:

  • Prior government permission for layoffs and retrenchment beyond prescribed employee strength
  • Notice period and compensation requirements
  • Procedural compliance for closure of establishments

Failure to follow prescribed procedures may result in penalties.

6. Strikes and Lockouts – Notice Requirements

The Code introduces structured requirements for strikes and lockouts to maintain industrial harmony.

  • Advance notice period is mandatory
  • Cooling-off period applies before and after conciliation proceedings
  • Applies to both workers and employers

7. Dispute Resolution Mechanism

The Code provides mechanisms for resolution of industrial disputes through:

  • Conciliation officers
  • Industrial Tribunals

The emphasis is on speedy and effective dispute resolution.

8. Penalties for Non-Compliance

The Industrial Relations Code prescribes monetary penalties for:

  • Violation of standing order provisions
  • Illegal strikes or lockouts
  • Non-compliance with retrenchment and closure procedures

Repeat offences may attract higher penalties as prescribed.

9. Practical HR Compliance Checklist – Industrial Relations Code

  • Review and update standing orders
  • Align HR policies with Model Standing Orders
  • Maintain records of disciplinary actions
  • Ensure compliance before retrenchment or layoffs
  • Follow statutory notice requirements
  • Train HR and IR teams on dispute handling
  • Monitor Central and State Rules updates

Related Labour Codes – Read Also

Disclaimer: This content is for educational purposes only and is based on the Industrial Relations Code, 2020 and applicable notifications and rules. It does not constitute legal advice.

Related Labour Law Guides (Latest)

For a complete understanding of India’s new labour law framework, refer to the following detailed and updated guides:

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