The Industrial Relations Code (IRC) Bill, introduced as part of India’s labor law reforms, consolidates and amends laws relating to trade unions, conditions of employment, and settlement of industrial disputes. It was passed in 2020 along with other labor codes to simplify compliance, improve employer-employee relations, and promote ease of doing business.
For banking and government exam aspirants, the IRC Bill is an important topic under the Indian Economy, Labor Laws, and Social Issues sections. Understanding its provisions helps in answering both conceptual and factual questions in exams like IBPS, RBI, SEBI, and UPSC.
Background of the IRC Bill
Before the introduction of labor codes, India had a complex framework of over 40 central labor laws and 100 state laws. This created compliance difficulties for industries and confusion for workers. To simplify the system, the Second National Commission on Labour (2002) recommended codification into fewer, more comprehensive laws. The Industrial Relations Code, 2020, consolidates three major pieces of legislation:
- The Trade Unions Act, 1926
- The Industrial Employment (Standing Orders) Act, 1946
- The Industrial Disputes Act, 1947
Objectives of the Industrial Relations Code
The IRC Bill was designed with the following key objectives:
- To promote harmonious employer-employee relations.
- To simplify and consolidate multiple labor laws into a single code.
- To balance the rights of workers and employers.
- To create a framework for dispute resolution in industries.
- To boost industrial growth, investment, and employment generation.
Key Provisions of the IRC Bill
The Industrial Relations Code introduces several new provisions and modifies old ones for better clarity and uniformity.
1. Trade Unions
- A union must have at least 10% of workers or 100 workers (whichever is less) as members to be registered.
- Introduction of a negotiating union/council for collective bargaining where multiple unions exist.
2. Standing Orders
- Applicable to industrial establishments with 300 or more workers (earlier 100).
- Employers must define service conditions clearly, including classification of workers, holidays, wage rates, and grievance redressal mechanisms.
3. Strikes and Lockouts
- Workers cannot go on strike without giving 14 days’ prior notice.
- Strikes are prohibited during conciliation and adjudication proceedings.
4. Industrial Disputes and Resolution
- Establishment of Industrial Tribunals for quicker resolution.
- Concept of conciliation officers and conciliation boards for dispute settlement.
5. Retrenchment and Closure
- Prior approval of the government is required for retrenchment, layoff, or closure in establishments employing 300 or more workers.
Benefits of the IRC Bill
The IRC Bill simplifies multiple labour laws into a single code, reducing compliance burden and improving ease of doing business. It strengthens collective bargaining through recognized unions and provides quicker dispute resolution via tribunals. Overall, it promotes industrial harmony and supports both employers and employees.
- Simplification – Merges three laws into a single framework.
- Transparency – Clear rules for strikes, layoffs, and union recognition.
- Flexibility – Higher threshold (300 workers) for standing orders reduces compliance burden on small firms.
- Dispute Resolution – Speedier mechanisms through tribunals and conciliation.
- Worker Empowerment – Recognition of collective bargaining rights via negotiating unions.
Criticisms of the IRC Bill
Critics argue that raising the threshold for standing orders to 300 workers weakens employee protections in smaller firms. The mandatory notice period for strikes is seen as restrictive, and excessive government control in retrenchment approvals is also debated. These provisions, some believe, tilt the balance towards employers.
- Higher Threshold Issue – Increasing standing order applicability from 100 to 300 workers may dilute worker protections.
- Strikes Restriction – Mandatory notice period limits the right to strike.
- Government Control – Requirement of government approval for retrenchment/closure may reduce employer flexibility.
- Union Representation – Minimum membership criteria may make it harder for smaller unions to register.
Principles vs Provisions in Industrial Relations
To better understand, let’s distinguish between industrial relations principles and the provisions of the IRC Bill.
| Basis | Industrial Relations Principles | IRC Bill Provisions |
| Focus | Harmony between workers & employers | Codification of 3 labour laws |
| Workers’ Rights | Freedom of association, collective bargaining | Recognized negotiating union |
| Disputes | Peaceful resolution through dialogue | Industrial tribunals & conciliation officers |
| Employer Control | Right to manage business efficiently | Layoff/closure rules with approval |
Importance of IRC Bill for Bank Exam Aspirants
For banking exam aspirants, key areas to focus on include:
- Which laws were merged into IRC
- Thresholds for standing orders and retrenchment
- Strikes and lockout rules
- Role of trade unions and dispute resolution bodies
Practice Questions on Industrial Relations Code (IRC) Bill
- The IRC Bill, 2020 consolidates how many labor laws?
- Which year was the Industrial Relations Code passed?
- The minimum membership requirement for a trade union under the IRC is?
- Which authority resolves industrial disputes under the IRC Bill?
- What is the new threshold for standing orders applicability?
- Which three laws are merged into the IRC Bill?
- How many days’ notice is required before a legal strike?
- What is the role of a negotiating union?
- Retrenchment in establishments with more than how many workers requires government approval?
- Which commission recommended codification of labour laws?
- What happens to strikes during conciliation proceedings?
- Which labour law governed trade unions before the IRC Bill?
- How does the IRC Bill promote ease of doing business?
- Name one criticism of the IRC Bill related to workers’ rights.
- Why is the IRC Bill important for banking exam aspirants?
Answer Key
| Q.No. | Answer |
| 1 | Three laws |
| 2 | 2020 |
| 3 | 10% of workers or 100 workers (whichever is less) |
| 4 | Industrial Tribunals |
| 5 | 300 workers |
| 6 | Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946; Industrial Disputes Act, 1947 |
| 7 | 14 days |
| 8 | Represents workers for collective bargaining |
| 9 | 300 workers |
| 10 | Second National Commission on Labour (2002) |
| 11 | Prohibited |
| 12 | Trade Unions Act, 1926 |
| 13 | Simplifies laws and reduces compliance burden |
| 14 | Restrictions on strikes / Higher threshold for protections |
| 15 | Important labour reform, asked in exams under economy & social issues |
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