In a move aimed at harmonising labour laws across neighbouring administrative regions, the Central Government has extended the Industrial Disputes (Punjab Amendment) Act, 2020 to the Union Territory of Chandigarh. Issued on 14 November 2025 under Section 87 of the Punjab Reorganisation Act, 1966, this decision ensures that Chandigarh—although a Union Territory—will now follow the same amended industrial dispute framework that has been in effect in Punjab since 2020, with minor modifications specified by the Centre.
What Has Been Extended?
The Punjab Amendment Act of 2020 introduced several key changes to the Industrial Disputes Act, 1947 as applied within Punjab. By extending these provisions to Chandigarh, the Central Government aims to ensure uniformity in labour dispute procedures, worker protections, and employer obligations across the region.
However, certain sections of the Punjab amendment—specifically Sections 2 and 4 through 7—have been intentionally omitted for Chandigarh. Additionally, a technical insertion has been made in Section 3 of the Act to clarify that the “Principal Act” refers to its application within the Union Territory. These modifications ensure that the extended law fits seamlessly into Chandigarh’s administrative structure.
Key Features of the Punjab Amendment Now Applicable to Chandigarh
The heart of the 2020 Punjab amendment lies in several significant changes that affect how industrial disputes are raised and handled. Here are the most notable provisions now applicable to Chandigarh:
1. Strict Time Limit for Raising Termination-Related Disputes
The amendment adds a new provision that requires workers to raise disputes relating to termination, dismissal, retrenchment, or discharge within three years. If the dispute is not brought to conciliation within this period, it will not be treated as an industrial dispute.
However, flexibility remains: authorities may extend the three-year limit if the worker can justify the delay. This balances timely resolution with compassionate consideration of individual circumstances.
2. Higher Threshold for Applicability of Certain Provisions
The amendment revises the applicability of Chapter V-B of the Industrial Disputes Act, which deals with layoffs, retrenchment, and closures. For Chandigarh, this chapter will now apply to establishments employing 300 or more workers, raising the earlier threshold.
Additionally, the government retains the power to apply these provisions to establishments with 100 to 300 workers if required to maintain industrial peace.
3. Revised Compensation Rules for Retrenchment and Closure
The 2020 amendment increases compensation for workers affected by retrenchment or closure. In addition to the previously mandated amounts, eligible workers will now receive an extra three months’ average pay. This provides greater financial cushioning during job transitions.
4. Clear Definition of “Go Slow” as a Misconduct
The amendment clarifies that intentional slowing down of work—whether called “work-to-rule” or otherwise—constitutes misconduct if workers deliberately reduce output despite adequate availability of resources. This aims to reduce ambiguity in disciplinary matters.
Why This Matters for Chandigarh
By adopting these provisions, Chandigarh moves toward a more structured and predictable labour relations framework. Workers gain clearer rights and timelines, while employers benefit from unambiguous guidelines and updated thresholds aligned with evolving industrial practices.
A Step Toward Greater Regional Alignment
This extension helps ensure administrative consistency between Punjab and Chandigarh, both of which share economic, cultural, and labour market linkages. With these amendments in place, the region is better poised to maintain industrial harmony while safeguarding worker welfare.