In a significant advancement in India’s labour reform agenda, the Ministry of Labour and Employment has formally notified the commencement of the Industrial Relations (IR) Code, 2020, one of the four major Labour Codes aimed at transforming the country’s labour ecosystem.
As per notification S.O. 5320(E) issued in New Delhi on 21 November 2025, the Central Government has invoked its powers under Section 1(3) of the IR Code to bring all provisions of the Code into force from the same date.
This implementation marks a major milestone in modernising industrial relations, simplifying labour governance, and strengthening dispute resolution mechanisms across India.
What the Industrial Relations Code Addresses
The Industrial Relations Code, 2020 consolidates and streamlines three key labour laws:
- The Trade Unions Act, 1926
- The Industrial Employment (Standing Orders) Act, 1946
- The Industrial Disputes Act, 1947
By merging these laws, the IR Code creates a unified, transparent, and flexible framework for managing employer–employee relations in a rapidly evolving economy.
Key Features and Impact of the IR Code
✔ Fixed-Term Employment With Full Benefits
Workers hired on fixed-term contracts receive wage parity with permanent employees and become eligible for gratuity after one year of service.
✔ Re-skilling Fund for Retrenched Workers
Employers will contribute the equivalent of 15 days’ wages for each retrenched worker to support re-skilling and re-employment.
✔ Transparent Trade Union Recognition
Unions with 51% membership will be recognised as the sole negotiating body. Otherwise, a Negotiating Council will be constituted, strengthening collective bargaining.
✔ Higher Threshold for Lay-Offs and Closure Approvals
The requirement for prior government consent now applies to establishments employing 300 or more workers, facilitating improved operational flexibility.
✔ Digital Governance and Transparency
The Code encourages electronic record-keeping, digital submissions, and online communication to reduce paperwork and improve compliance.
✔ Direct Access to Tribunals
If conciliation fails within 90 days, parties may seek redress directly from Industrial Tribunals, ensuring faster resolution of disputes.
✔ Regulated Strikes and Lockouts
A 14-day prior notice is mandatory across all establishments, promoting dialogue and minimising sudden disruptions to industrial operations.
✔ Work-from-Home Provisions
Recognising evolving work models, the Code allows mutually agreed work-from-home arrangements in service-sector establishments.
Why This Notification Matters
With the IR Code now officially in force, India moves closer to implementing a modern, unified labour law framework. The enforcement is expected to:
- Improve industrial harmony
- Reduce litigation and conflict
- Boost ease of doing business
- Provide workers with clearer rights and structured protection
- Support flexibility in workforce management
- Enable faster and more transparent dispute resolution
The notification also signifies the government’s commitment to aligning labour governance with contemporary economic realities.
Conclusion
The commencement of the Industrial Relations Code, 2020, effective 21 November 2025, marks a transformative moment in India’s labour law reform process. By bringing together decades-old legislations under a single, modernised framework, the Code is set to enhance industrial peace, promote worker welfare, and support India’s growing economy.