The Ministry of Labour and Employment (MoLE), on December 30, 2025, issued clarifications through a Frequently Asked Questions (FAQ) document to address widespread misconceptions surrounding the Industrial Relations (IR) Code, 2020. The authority clarified that the Code does not dilute workers’ fundamental rights, including the right to form and register trade unions or to engage in collective bargaining. Provisions relating to trade union registration remain intact, and statutory recognition of negotiating unions/negotiating councils has been introduced to strengthen collective bargaining mechanisms.
The FAQ further explains that the right to strike has not been abolished, nor is prior government permission required. Workers may exercise this right subject to a mandatory 14-day prior notice, enabling timely conciliation and dispute resolution. Similarly, the Code does not permit arbitrary retrenchment or “hire and fire” practices. Safeguards such as one-month notice, retrenchment compensation, and prior government approval for lay-off, retrenchment, or closure in establishments employing 300 or more workers continue. Additional worker-centric measures like a re-skilling fund have been introduced to support retrenched employees.
The authority also clarified that worker protections are expanded rather than reduced. Fixed-Term Employees are entitled to benefits at par with permanent workers, including EPF, ESI, gratuity, and minimum wages. Conciliation mechanisms have been streamlined and made compulsory, while Labour Courts and Industrial Tribunals are replaced with two-member Industrial Tribunals for faster justice. The Code ensures workers’ participation through bipartite forums, enhances penalties for employer violations, and extends legal protection to sales promotion employees and working journalists, reinforcing a balanced and inclusive industrial relations framework.
