A Note on Industrial Relations Code, 2020

Abstract

In this note, we assess the newly introduced Industrial Relations Code (IRC) 2020. First, we compare the provisions in IRC 2020 with its predecessor, Industrial Disputes Act (IDA) 1947, and the amendments to IDA 1947 in 1976 and 1982 regarding the employment protection provisions against layoffs, retrenchments, and closures. We find that IRC 2020 merely restored the factory-size threshold to the initial IDA amendment 1976 level of 300 or more workers to which IDA 1947 originally applied from 100 or more workers as notified in the 1982 IDA amendment. We calculate the effect of the threshold-size change on the workers and factories on the firms registered under the Factories Act 1948 2(m). We find from the ASI 2017-2018 data that an estimated 7.07% of the factories and 15.97% of the workers will be affected due to the change in the threshold size introduced through IRC, 2020. Finally, we conclude by discussing the current relevance of the employment protection legislation during the pandemic time and the need for discretionary usage and temporary expansion of coverage of employment protection provisions under the IRC if warranted.

Keywords: India; Industrial relations; Labour law; Labour policy; Organised manufacturing.