Industrial Relations Code 2020 –Progressive Reform or  Repression?

Industrial Relations Code 2020

On 23 September, 2020, the Industrial Relations Code was passed by rule of majority in the Rajya Sabha. This was hailed by the industry as a rational reform of the pre-existing labor laws. The code is a modified amendment to the Industrial Relations Code bill introduced in 2019. It combines the features of three pre-existing laws – The Trade Unions Act, 1926, the Industrial Employment Act 1946, and the Industrial Disputes Act of 1947.

However, it is imperative that the provisions of this amendment be analyzed closely as all is not what meets the eye. One such provision is the introduction of Fixed Term Employment which gives employers the right to hire workers based on ‘requirement’, through the means of a written contract. A second clause to this ensures that they should be treated on par with the permanent workers in terms of wages, allowance, benefits and gratuity.

Superficially perceived, it may look as though it is a progressive reform that guarantees greater job security and benefits for contract laborers. But when viewed in a wider perspective, one is confronted with the larger narrative of disguised oppression.

For any establishment that employs 300 employees or more the code provides rules relating to the classification of workers, manner of intimating to them periods and hours of work, holidays, leave, termination of employment or suspension, besides the means available for redress of grievances.  The previous 2019 bill ensured that this applied to industrial establishments with 100 employees or more, while this threshold has been raised to 300 in the recently passed bill.

The emphasis laid on the word ‘employees’ ensures that contracted workers do not fall under this umbrella. Contracted workers, do not qualify as employees, due to the time constraint on the labour services that they provide. This means that, an industrial employer, can have permanent employees at a level just below the bracket that requires the following regulations to be enforced, and supplement the labour force with other contract labourers.

This ensures that they do not have to comply with the regulations. The increasing of the bracket to 300, gives a huge loophole for the industrialists for unbridled exploitation, virtually unregulated by the government which is meant to be the champion of the rights of the proletariat.

Moreover, an important inclusion to the code is the provision that confers on the “appropriate government”, that is the Centre or the State governments, the power to exempt, with or without conditions, any industrial establishments from any or all of the provisions of the Code. This virtually means that the government can give a free pass to any industrial establishment with regards to the enforcement of the code, leading to government sanctioned, unregulated exploitation.

With regard to the trade unions, the provision made for it dictates that where there is more than one trade union in an establishment, the sole negotiating union status will be given to the one that has 51% of the employees as its members. It has been lowered from the earlier 75% requirement in the 2019 version.

At first glance, it may seem as though this empowers the labour unions by reducing the member limit to 51%, but when viewed in tandem with the other provisions, you get the real picture of the steady move towards neo-liberal reforms and the erosion of the rights of the working class.

In essence, industrial establishments could bypass the entire regulatory provisions under the code, by limiting their permanent employees to stay under the set level of 300, and supplementing their labour force with “Fixed Term Employment” or contracted workers, who do not come under the permanent employee umbrella, due to the time constraint on their contract.

Moreover, with the majority of the labour force being contracted labourers, the industrial establishment may even influence the trade union by extending membership to the contract workers, which tips the balance and ensures that trade unions become a means to ensure the supremacy of the capitalists in the event of industrial disputes, as contracted labourers could be pressured, persuaded, or enticed by incentives, to vote in favour of the management.

In the context of employment and lay-off, the important amendment to existing laws is that the regulations that require prior permission of the government for lay-off, retrenchment and closure are made applicable only to establishments that had employed 300 or more workers on average per working day in the preceding 12 months. The code also allows the government to raise this threshold by notification.

However, a notable clause inserted in this provision is that, a layoff shall be deemed illegal if it is effected without permission or is done despite refusal of permission, however, it shall not be so if the employee had been offered alternative employment that does not require special skill or cause undue hardship. This means that an employee can be laid off, without any permission, by providing him alternative employment. The problem here is that the term employment has been vaguely defined as to what constitutes it. Therefore, he could be laid off from his job and be given a menial job as alternative employment, effectively throwing them under the bus.

Perhaps the most alarming of the provisions is the prohibition of strikes and lockouts in industrial establishments without notice. It is dictated in the code that no unit shall go on strike in breach of contract, without giving 60 days of notice, or within 14 days of giving such notice, or before the expiry of any date given in the notice. Furthermore, it has been defined that there should be no strike during conciliation proceedings, or within 7 days of conclusion of such proceedings, or during proceedings before an industrial tribunal or 60 days after their conclusion or during arbitration proceedings. The present code also places restrictions on announcing strikes through all establishments. It is worth noting that in the previous 1947 bill, this only extended to public utility services and even the Standing Committee on Labour had favoured limiting the provisions to public utilities.

It can be seen that these measures curtail the right of the workers to protest and severely dilute the efficacy of protests. The fact that a 60 day notice must be given, would mean that the strike could possibly be rendered ineffective. Coupled with the other provisions made, the discontent workers could also lose their jobs by being laid off.

The bill reflects the pro-corporate stance of the government and is an extremely draconian piece of legislation. Its hidden dangers have not yet been recognized by the public who are apathetic to its implementation, but its long term implications are extremely grim. In a nation where autonomy is being curtailed, freedom of expression is non-existent, and where dissent is being labelled as anti-governmental activities, this bill is blatantly and expressly oppressive to the proletariat.

Drawing a parallel to the Nazi regime, the bill is highly reminiscent of the industrial reforms under the Reich.  The usurping of the rights of trade unions was one of the first acts of Hitler’s Nazi government when it came to power in Germany in 1933. The Nazis saw that the unions exercised significant power in policy reforms by promoting rights of the proletariat and by creating a democratic outlook among the workers. Thus, it proved to be a huge obstacle towards creating a capitalist-fascist state in Germany. Hence, he executed the systematic dilution of labor laws and the breakdown of independent labor unions by consolidating them into one German Labor Front.

Hitler knew that there were too many to use brute force to push them into submission, hence he offered the working class an improved leisure life, while taking away their legitimate rights as workers. Under the newly introduced Law Regulating National Labor, or the ‘Charter of Labor’, strikes were banned at the statute level. The conditions of work and pay were completely dictated by the GLF and the workers were represented by the German Labor Front in the event of industrial disputes between the management and the workers.

This ensured complete control of the Proletariat by Hitler’s oppressive policies. The current amendment is eerily similar.

Today however, the same openly oppressive policies cannot be enforced, hence the oppression is disguised as a progressive measure for industries, when in reality it is just a policy to decimate the power of the proletariat. When viewed chronologically, one can see that there is a constant erosion of the rights of the workers and the power of the labour unions. This might possibly be the final nail in the coffin for the trade unions, unless the people wake up to the reality that prevails.

Che Guevara S.A is an ISC student who is pursuing the Humanities stream. His interests range from debating in the academic sphere, to playing basketball in the field of sports. He aspires to pursue a career in law and shape future global policy.  Email id:



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