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Industrial Relations Code Bill, 2019

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Industrial Relations Code Bill, 2019

What to study?

For Prelims: The labour code- key features.

For Mains: Need for and significance of the code.

Context: The Parliamentary Standing Committee on Labour has made suggestions to the Industrial Relations Code.

The code proposes to amalgamate The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947.

Key suggestions made:

  1. Centre should create a formal and conducive industrial relations system by strengthening the various provisions in the Code.
  2. In case of natural calamities, payment of wages to the workers until the re-establishment of the industry may be unjustifiable. The law has to be reasonable, in such cases it is for the government to step in and extend a helping hand for the industries.
  3. A separate and an exclusive chapter should be created for outlining the rights of both the employee and the employer containing the principles pertaining to the industrial relations based on the ILO conventions.
  4. Union Labour Ministry should include scheme workers like Anganwadi, Asha, Mid-day Meal, etc, in the definition of worker on the ground that this is as per the existing provision for the formation of a Trade Union.
  5. The Government should give a consolidated and merged definition of worker/employee so that supervisors, managers, etc. could find a place therein.

Need of the hour:

Governance of the industrial relations system is simply not about framing good laws but also designing adequate and effective mechanism for their efficient implementation. Therefore, it becomes imperative on the part of the Government to strive for creating a formal and conducive industrial relations system, by strengthening the various provisions in the Code, so as to do away with the ambiguities and uncertainties, which would result in aiding economic progress, employment generation and labour welfare.

Overview of the Bill:

  1. Seeks to allow companies to hire workers on fixed-term contract of any duration.
  2. Has retained the threshold on the worker count at 100 for prior government approval before retrenchment, but it has a provision for changing ‘such number of employees’ through notification.
  3. Provides setting up of a two-member tribunal (in place of one member)wherein important cases will be adjudicated jointly and the rest by a single member, resulting speedier disposal of cases.
  4. Has vested powers with the government officers for adjudication of disputes involving penalty as fines.
  5. Introduces a feature of ‘recognition of negotiating union’ under which a trade union will be recognized as sole ‘negotiating union’ if it has the support of 75% or more of the workers on the rolls of an establishment.
  6. Under the code, termination of service of a worker on completion of tenure in a fixed-term employment will not be considered as retrenchment.
  7. Proposes setting up of a “re-skilling fund” for training of retrenched employees. The retrenched employee would be paid 15 days’ wages from the fund within 45 days of retrenchment.


The Indian economy grew at 5% in the June quarter, a six-year low, while the country’s factory output shrank for the second straight month at 4.3% in September, recording its worst show since the present series was launched in April 2012.

The ease of compliance of labour laws will promote the setting up of more enterprises, thus catalysing the creation of employment opportunities in the country.

Insta Links:

Prelims Link:

Key provisions in the bill.

Mains Link:

Discuss the significance of the Industrial Relations Code Bill, 2019.

Sources: pib.