The Industrial Relations Code, 2020
Merges the law on trade unions, standing orders and industrial disputes. The headline changes are higher thresholds for state permission, nationwide recognition of fixed-term employment, and a single negotiating union framework.
In force since 21 November 2025; central rules notified 8 May 2026. State rules are at different stages — check the tracker for your state, because until a state notifies final rules, the rules under the acts below continue transitionally.
What it replaces
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
What changes
- Thresholds move from 100 to 300
- Standing orders become mandatory at 300 workers, and prior government permission for lay-off, retrenchment or closure is required only at 300 or more — both were 100 under the legacy acts. States may raise these further.
- Fixed-term employment, recognised nationally
- A fixed-term employee gets the same benefits as a permanent one doing the same work, and becomes eligible for gratuity pro-rata after one year rather than five.
- One negotiating union
- A union with 51% membership becomes the sole negotiating union; below that, a negotiating council is formed from the larger unions.
- Strike and lockout notice for everyone
- 14 days’ notice before a strike or lockout applies to every establishment, not only public utilities, with mass casual leave counted as a strike.
- Re-skilling fund
- Employers contribute 15 days’ wages per retrenched worker to a fund for re-skilling them.
What it means for compliance
- Establishments between 100 and 300 workers exit the prior-permission regime once the code applies to them — a materially different exit process.
- Fixed-term contracts need gratuity accrual from year one.
- Standing orders, grievance redressal committee sizes and dispute timelines follow the new code once state rules are final.
Sources
- Press Information Bureau / DD News — four Labour Codes in force, 21 November 2025
- DLA Piper — Key considerations of the notified Central Rules (May 2026)
- Lakshmikumaran & Sridharan — state rules status tracker
Compiled from the sources above on 19 August 2026 and pending review by our legal team.
Informational only, not legal advice. Thresholds stated here are the code’s central provisions; your state’s rules may modify them — verify before acting.