7. Industrial Relations Code (Amendment) Bill, 2026: Strengthening Legal Certainty

The Union Government recently introduced the Industrial Relations Code (Amendment) Bill, 2026 in the Lok Sabha. The primary objective of this legislative move is to provide absolute legal clarity regarding the repeal of older labor laws and to ensure a seamless transition to the new unified labor regime, thereby preventing potential judicial or administrative complications. Core Summary of the Development • Legislative Intent: The Bill seeks to amend the Industrial Relations Code (IRC), 2020, specifically clarifying the process through which earlier labor laws were repealed to avoid any \'future unwarranted complications.\' • Laws Subsumed: The IRC 2020 consolidates and replaces three major historical enactments: The Trade Unions Act, 1926; The Industrial Employment (Standing Orders) Act, 1946; and The Industrial Disputes Act, 1947. • Automatic Repeal: While Section 104 of the 2020 Code already provides for the repeal of these laws, the amendment explicitly reinforces that this repeal occurs by statutory operation (the law itself) rather than through executive discretion. • Legal Certainty: The amendment addresses concerns that the repeal could be misconstrued as a power delegated to the executive, which could lead to legal challenges in courts. • Savings Provisions: By refining Section 104, the government ensures that all actions, registrations, and proceedings initiated under the old laws remain valid and transition smoothly under the new Code without a legal void. • Operational Context: This Bill comes as the four Labor Codes, notified nationwide in late 2025, are being fully operationalized across all States and Union Territories. Key Definitions • Savings Provision: A clause in a new statute that preserves (saves) rights, duties, or legal proceedings that existed under the law being repealed. • Industrial Relations Code (IRC): One of the four labor codes aimed at simplifying labor laws, focusing on industrial peace, dispute resolution, and trade union recognition. • Statutory Operation: A legal effect that happens automatically by the force of the written law passed by the legislature, requiring no further action by the government.Constitutional and Legal Context • Entry 22, Concurrent List (Schedule VII): \'Trade unions; industrial and labour disputes\' are in the Concurrent List, allowing both Centre and States to legislate, though Central law prevails in case of conflict (Article 254). • Article 239: Recently utilized to authorize Lieutenant Governors of Union Territories to exercise powers of the \'appropriate government\' under the IRC 2020, ensuring uniform implementation. • Doctrine of Delegated Legislation: The amendment ensures that the core legislative function (repealing an Act) is seen as performed by Parliament and not delegated to the executive, which would violate constitutional norms. Additional Key Points • Threshold for Retrenchment: The IRC 2020 increased the employee threshold from 100 to 300 workers for establishments to seek prior government permission before layoffs or closures. • Negotiating Union: For the first time, the Code provides for a \'sole negotiating union\' (requiring 51% support) to streamline collective bargaining. • Decriminalization: The Codes shift the focus from imprisonment to monetary penalties for minor procedural lapses, enhancing the \'Ease of Doing Business.\' • Fixed-Term Employment: The framework now provides statutory recognition to fixed-term workers, ensuring they receive the same social security benefits as permanent employees. Conclusion The 2026 Amendment is a proactive \'clean-up\' legislation designed to bulletproof the new labor regime against technical legal challenges. By shifting the repeal mechanism from an executive notification to a clear statutory mandate, the government is signaling its commitment to a stable and predictable industrial environment. This is a crucial step in finalizing India\'s largest labor reform exercise since independence, balancing worker protection with administrative efficiency. UPSC Relevance • GS Paper II: Parliament and State Legislatures—structure, functioning, conduct of business, powers & privileges; Statutory, regulatory and various quasi-judicial bodies. • GS Paper III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Industrial policy and its effects on industrial growth. • Mains Perspective: Analyze the impact of labor law consolidation on \'Ease of Doing Business\' versus \'Labor Rights\' in India. Discuss the significance of the 300-worker threshold in the context of industrial flexibility.