The Code on Social Security 2020 is a comprehensive labour legislation enacted by the Indian Parliament to consolidate and reform nine existing social security laws into a single, unified framework. Its objective is to provide social security benefits—such as provident fund, employee state insurance, maternity benefits, gratuity, injury compensation, and welfare schemes—to employees, unorganised workers, gig workers, and platform workers. By streamlining registration, compliance, and administration, the Code aims to expand social protection coverage, reduce complexity for employers, and make India’s social security system more inclusive and efficient.

Table of Contents

1. Introduction
2. From Fragmented to Unified – The Code Combines Nine Key Labour Laws
3. Applicability and Enforcement of the Social Security Code, 2020
4. Definition of “Social Security”
5. Types of “Employers” Under the Code on Social Security, 2020
6. Categories of Workers and Employees Under the Code on Social Security, 2020
7. Employer’s Perspective – Focus on Compliance and Ease of Doing Business
8. Employee/Worker’s Perspective – Focus on Welfare and Protection
9. Conclusion

1. Introduction

The Code on Social Security, 2020 is a transformative reform that unifies nine fragmented labour laws into a single, modern framework, simplifying compliance for employers while expanding protections for all workers. It ensures access to social security benefits including provident fund, health care, maternity leave, gratuity, and injury compensation not only for formal employees but also for gig workers, platform workers, home-based workers, fixed-term employees, and those in the unorganised sector.

By consolidating laws under one umbrella, the Code makes social security more accessible and inclusive, addressing gaps that previously left millions of workers without coverage. It simplifies registration, clarifies obligations, and empowers the government to design schemes for emerging work models, creating a system that is adaptable to India’s evolving workforce.

In essence, the Code is more than legislation, it’s a promise of security, dignity, and financial protection for every worker, no matter their job type or sector.

2. From Fragmented to Unified – The Code Combines Nine Key Labour Laws

The Code merges following laws into one single modern law, making compliance easier for employers and easier access of benefits for workers[1]:

• The Employee’s Compensation Act, 1923
• The Employees’ State Insurance Act, 1948
• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
• The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
• The Maternity Benefit Act, 1961 (53 of 1961)
• The Payment of Gratuity Act, 1972 (39 of 1972)
• The Cine-Workers Welfare Fund Act, 1981 (33 of 1981)
• The Building and Other Construction Workers’ Welfare Cess Act, 1996 (28 of 1996)
• The Unorganised Workers’ Social Security Act, 2008 (33 of 2008)

3. Applicability and Enforcement of the Social Security Code, 2020

The Code applies across India, and its provisions relating to PF, ESI, Gratuity, Maternity Benefits, and Unorganised Workers have officially come into force with effect from 21 November 2025.

• Chapter III – Employees’ Provident Fund (EPF) – Applies to all establishments with 20 or more employees.
• Chapter IV – Employees’ State Insurance (ESIC) – Applies to establishments with 10 or more employees, including hazardous workplaces with even 1 employee. Employers of plantations can opt in if ESIC benefits are better. Contributions start from the date ESIC benefits are provided.
• Chapter V – Gratuity – Covers factories, mines, oilfields, plantations, ports, railway companies, and shops/establishments with 10 or more employees or as notified by the government.
• Chapter VI – Maternity Benefit – Applies to factories, mines, plantations, government establishments, and shops/establishments with 10 or more employees or as notified.
• Chapter VII – Employee’s Compensation – Applies to employers and employees not covered under Chapter IV, as per the Second Schedule.
• Chapter VIII – Social Security Cess for Building and Construction Workers – Applies to all construction establishments.
• Chapter IX – Social Security for Unorganised Workers – Covers unorganised sector employees, gig workers, platform workers, and home-based workers.
• Chapter XIII – Employment Information and Monitoring – Applies to career centres, job seekers, employers, and vacancy monitoring.

4. Definition of “Social Security”

“Social Security” means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under this Code[2].

5. Types of “Employers” Under the Code on Social Security, 2020

Section	Types of Employers/Entities	Summary of Definitions	Example
2 (27)	Employer	Employer refers to any person or authority who employs one or more employees directly or through another person. It includes the head or designated authority of a government department, the chief executive of a local authority, the occupier of a factory, the owner or qualified manager of a mine, the person or authority with ultimate control over any establishment (including its manager or managing director), any contractor who hires workers, and the legal representative of a deceased employer.	Factory occupier, Mine owner appointing a certified manager, Contractor hiring labour for construction or person with ultimate control of establishment.
2(20)	Contractor	A contractor is a person who either undertakes a specific task or job for an establishment (not just supplying goods) or provides contract workers for any work of the establishment, and this also includes sub-contractors.	Security agency supplying guards, Contractor hired for machine maintenance, Housekeeping vendor providing cleaners.
2(2)	Aggregator	A digital platform that connects buyers/users with service providers or sellers.	Uber, Ola, Zomato, Swiggy, urban company etc. connect users with delivery partners.

6. Categories of Workers and Employees Under the Code on Social Security, 2020

Section	Types of Workers/Employees	Summary of Definitions	Example
2(7)	Building Worker	A person employed for skilled, semi-skilled, or unskilled manual, technical, or clerical work, for hire or reward, in connection with any building or construction work but does not include any such person who is employed mainly in a managerial or supervisory or administrative capacity.	A site electrician, or a clerk maintaining attendance registers at the construction site of building project.
2(19)	Contract Labour	Contract Labour refers to a worker hired by a contractor to do work for an establishment. This can be with or without the knowledge of the main employer. It includes inter-state migrant workers, but does not include employee who are regularly employed by the contractor under mutually agreed terms (like permanent employees), and who receive benefits such as pay increments, social security, and other welfare benefits as per the law.	A team of housekeeping staff or security guards employed by an external contractor agency to clean a large corporate office.
2(26)	Employee	Employee means anyone (except apprentices under the Apprentices Act) who works for an establishment and is paid wages. This includes workers doing skilled, semi-skilled, unskilled, manual, technical, or clerical work, whether directly hired or through a contractor. It also includes anyone the government declares to be an employee, but does not include members of the armed forces.	A full-time software developer on the company payroll, a factory line worker, or a branch manager of a bank etc.
2(34)	Fixed Term Employment	Fixed Term Employment refers to hiring an employee for a specific period under a written contract. The employee must receive the same work hours, wages, allowances, and benefits as a permanent employee doing similar work. Additionally, the employee is entitled to proportionate benefits (such as leave or social security) based on their length of service, even if they do not meet the full qualifying period for permanent employment.	A marketing executive hired for a 9 month contract specifically to launch a new product line.
2(35)	Gig Worker	Gig worker means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.	A tutor who provides home tuition on a per-class basis.   A wedding decorator who works event-to-event without being employed by any company.
2(36)	Home-Based Worker	Home based worker means a person engaged in, the production of goods or services for an employer in his home or other premises of his choice other than the workplace of the employer, for remuneration, irrespective of whether or not the employer provides the equipment, materials or other inputs.	A person works for a footwear company to stitch shoe parts at their residence, or a worker assembling small electronic components at home who is paid for per assignment and is paid for the goods or services produced but not employed by the company.
2(41)	Inter-State Migrant Worker	A person recruited in one State for employment in another State, or a person who migrates on their own and finds work in another State.	A worker from Bihar who is recruited by a contractor to work on a large factory construction project in Gujarat.
2(60)	Platform Work	A work arrangement facilitated by an online platform where individuals provide specific services or solve problems for payment.	Delivering food or goods through an app like Zomato or Swiggy, or a person offering ride-sharing services through an app like Uber or Ola.
2(61)	Platform Worker	A person engaged in or undertaking an online platform work.	A food delivery agent or a cab driver who uses an online application to connect with customers and perform their job.
2(71)	Sales Promotion Employees	Defined as per the Sales Promotion Employees (Conditions of Service) Act, 1976.	A medical representative or any person employed to promote sales of any establishment’s business.
2(73)	Seamen	Any person forming part of the crew of any ship, but does not include the master of the ship.	An ordinary seaman, a cook, or an engineer working on a merchant ship.
2(75)	Self-employed Worker	A self-employed worker is someone who works for themselves, not for an employer, in the unorganized sector. They earn a monthly income below a certain limit set by the government or own cultivable land within a specified size as set by the state.	Street vendors, freelance photographers, small farmers, independent tailors, and carpenters. They earn income from their own business or services, often within income limits or land size regulations set by the government.
2(86)	Unorganised Worker	Unorganised worker means a home-based worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by the Industrial Disputes Act, 1947.	A worker in a small factory or business who is officially employed but does not fall under the protections of the Industrial Disputes Act, 1947, and lacks the rights and benefits of a regular employee.
2(90)	Wage Worker	A wage worker is someone employed in the unorganised sector, either directly by an employer or through a contractor. They can work for one or more employers, and their payment can be in cash or kind. This includes home-based workers, temporary or casual workers, migrant workers, or domestic workers. The wage worker earns a monthly wage, which is below a certain amount set by the government.	A wage worker is someone employed in the unorganised sector, either directly by an employer or through a contractor, earning a regular wage in cash or kind. This includes workers like construction labourers, domestic workers, agricultural workers, migrant workers, street vendors’ employees, and casual factory workers.

7. Employer’s Perspective – Focus on Compliance and Ease of Doing Business

For employers, the Code primarily reduces complexity and simplifies the regulatory environment:

7.1 Single Registration System for All Social Security Benefits

A single electronic (or other) registration will now be sufficient for all social security schemes such as EPF and ESI under the Code. Additionally, any establishment that is already registered under another Central labour law will not be required to obtain a separate registration under this Code, leading to a significant reduction in the compliance burden, administrative costs, and the need to file multiple forms across different regulatory bodies[3].

7.2 Reduced Amount of Deposit for Appeal

The appeal process for Provident Fund disputes stays the same, but the required upfront deposit pre-deposit required from employers to file an appeal before the Tribunal against an order determining dues or levying damages has been reduced from 75% to 25% of the amount due as determined by the officer. This makes the appeals process far more accessible and fair for employers[4].

7.3 Power of Government to Defer or Reduce Contribution in the Time of Pandemic

Government is empowered to defer or reduce employer/employee contributions in times of calamity or pandemic.

8. Employee/Worker’s Perspective – Focus on Welfare and Protection

For employees and the vast unorganised workforce, the Code focuses on extending rights and security:

8.1 Social Security Covers Gig Workers (e.g., Home Service Providers, etc.)

The Code introduces broader definitions particularly Gig Workers, Platform Workers, Fixed term employees, and Home-based workers enabling ESIC and other social security schemes to cover new and emerging categories of labour.

The definitions of unorganised sector, unorganised worker, and social security have also been expanded to ensure wider protection[5].

8.1.1 Constitution of Board for Unorganised Platforms

National Social Security Board mandates the constitution of a National Board for Unorganised, Gig, and Platform Workers, giving them dedicated oversight[6].

8.1.2 Government to Make Schemes for Gig, Platform, and Unorganised Workers

The Government will design and oversee dedicated social security schemes for unorganised workers, gig workers, and platform workers. This is a major reform because it creates India’s first statutory social security framework for gig-economy workers through the National and State Social Security Boards[7].

8.1.3 Power of Govt. to Frame New Schemes for Self-Employed Workers

Central Government is empowered to frame new schemes for self-employed workers or any other class of persons. This makes the Code adaptable to future work models like freelancers and independent professionals[8].

8.1.4 Social Security Fund for Unorganised or Gig Workers

A separate is required to be established to finance the schemes for the Unorganised, Gig, and Platform Workers[9].

8.2 Provident Fund Transfer on Job Change

In case an employee changes jobs, their PF and Pension balances must be transferred or settled. If the new job is covered, the amount moves to the new account. If not, then employee may withdraw or keep the account inactive until returning to covered employment[10].

8.3 Responsibilities of Principal Employer and Contractor for Fair Contributions

The Principal Employer must pay all employer-side PF contributions and administrative charges. Contractors may deduct only the employee’s share from wages and cannot deduct employer contributions from workers. This protects employees from unfair wage cuts[11].

8.4 ESIC Coverage for Gig and Unorganised Workers

This is one of the Code’s biggest reforms. It paves the way for ESIC to extend medical benefits to unorganised workers, gig workers, and platform workers—something the old ESI Act could not do[12].

8.5 Better pay for ESIC Medical Specialists to Boost Quality of Services

ESIC medical specialists’ compensation is aligned with AIIMS standards. This helps attract highly qualified doctors and improves medical care for insured workers which is crucial for enhancing the quality of medical services provided to insured persons[13].

8.6 New Revenue Sources and Approved Expenditures for ESIC

Code explicitly includes user charges collected from non-insured beneficiaries and the Corporate Social Responsibility (CSR) Fund as formal sources of income. This strengthens ESIC’s financial base[14].

The Code has effectively codified the exhaustive list of permissible expenditures without making any material changes to the fund’s utilisation[15].

8.7 Gratuity for Fixed-Term Employees

Fixed-term employees are now eligible for pro-rata gratuity without needing 5 years of service. The formula for calculating 15 days’ wages, previously based on judicial interpretation, is now explicitly defined in the law. The consolidated definition of Wages introduced by the Labour Codes will likely increase the base on which gratuity is calculated[16].

8.8 Maternity Benefits Continued With Paid Leaves and Flexible Work

The Code did not amend the existing maternity benefits but ensured their seamless legal continuity by consolidating the MB Act into the new Code structure.  The Code retains the provision of 26 weeks paid leave, rights for adopting mothers and commissioning mothers for 12 weeks paid leave and the provision for mutually agreed work from home arrangements after availing the maternity benefits.

8.9 No Dual Benefits for Same Contingency

The Code significantly improves clarity by explicitly codifying the non-receipt of dual benefits (Sub-section 7), ensuring that workers cannot simultaneously claim both ESI benefits and benefits under the newly unified chapters for Employees’ Compensation (Chapter VII) and Maternity Benefit (Chapter VI) for the same event[17].

9. Conclusion

With these provisions officially in force, India now moves toward a modern, unified, and inclusive social security system. Workers across sectors—formal, informal, gig, and platform stand to gain stronger protections. Employers also benefit from simplified registrations, clearer rules, and reduced compliance confusion.

This marks a major step towards a future where every worker in India enjoys security, dignity, and financial protection.

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[1] Section 164 of Code on Social Security, 2020

[2] Section 2(78) of Code on Social Security, 2020

[3] Section 3 of Code on Social Security, 2020

[4] Section 23  of Code on Social Security, 2020

[5] Section 2 of Code on Social Security, 2020

[6] Section 6 of Code on Social Security, 2020

[7] Section 6 of Code on Social Security, 2020

[8] Section 15 of Code on Social Security, 2020

[9] Section 141 of Code on Social Security, 2020

[10] Section 22 of Code on Social Security, 2020

[11] Section 17 of Code on Social Security, 2020

[12] Section 45 of Code on Social Security, 2020

[13] Section 24 of Code on Social Security, 2020

[14] Section 25 of Code on Social Security, 2020

[15] Section 26 of Code on Social Security, 2020

[16] Section 46 of Code on Social Security, 2020

[17] Section 41 of Code on Social Security, 2020

The post [Analysis] The Code on Social Security 2020 – Applicability | Key Provisions | Workers Welfare appeared first on Taxmann Blog.

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The Industrial Relations Code 2020 is a comprehensive labour legislation that consolidates and replaces three major laws—the Industrial Disputes Act, 1947; the Trade Unions Act, 1926; and the Industrial Employment (Standing Orders) Act, 1946—to create a unified framework governing industrial relations in India. It regulates key aspects such as trade union recognition, collective bargaining, strikes and lockouts, lay-offs, retrenchment, closures, dispute resolution, and employment conditions through Standing Orders. By standardising definitions, raising compliance thresholds, and modernising procedures, the Code aims to promote industrial harmony, ensure fairness, protect worker rights, and provide greater operational flexibility to employers in a modern, evolving workforce environment.

Table of Contents

1. Introduction
2. A Shift to Unified Governance – Consolidation of Three Key Labour Laws
3. Applicability of the Industrial Relations Code, 2020
4. Key Definitions and Concepts
5. Framework Recognising Trade Unions or Council as Negotiating Bodies
6. Legal Framework Governing Strikes and Lockouts
7. Provisions on Retrenchment, Lay-Off and Closure
8. Workplace Conduct and Employment Conditions
9. Advancing Gender Equity at Work
10. Simplified and Streamlined Dispute Resolution Process
11. Ensuring Fair Practices At the Workplace
12. Decriminalization and Compounding of Offences
13. Penalties Under the Industrial Relations Code
14. Exemptions from Applicability of the Code
15. Conclusion

1. Introduction

The Industrial Relations Code, 2020, was enacted to consolidate and modernise India’s fragmented labour laws, namely the Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. The Code provides a uniform legal framework to govern employment conditions, dispute resolution, lay-offs, retrenchment, strikes, and closures, thereby promoting industrial peace and harmony.

The Ministry of Labour and Employment has notified November 21, 2025, as the effective date for the enforcement of all the provisions of the Industrial Relations Code, 2020. This article provides an overview of the key provisions of the Industrial Relations Code, 2020, and analyses how they shape industrial relations and their impact on worker welfare and employer responsibilities.

2. A Shift to Unified Governance – Consolidation of Three Key Labour Laws

The Code merges the following three major legislations into a single statute:

• The Industrial Disputes Act, 1947
• The Trade Unions Act, 1926
• The Industrial Employment (Standing Orders) Act, 1946

This consolidation provides clarity, reduces compliance complexities and ensures uniformity across industries.

3. Applicability of the Industrial Relations Code, 2020

The Code applies to industrial establishments based on specific thresholds:

• Industrial Establishments with 100 or more workers employed or have been employed on any day in the preceding 12 months (IEs must have a Works Committee, consisting of representatives of employers and workers engaged in the establishment).
• Industrial Establishments (IE) with 20 or more workers (IEs must have one or more Grievance Redressal Committees to resolve disputes arising from individual grievances).
• Any trade union having 7 or more members may register under the Code.
• Industrial establishment with 300 or more workers employed or were employed on any day of the preceding 12 months (Threshold applicable for provisions relating to Standing Orders)

The key provisions of the Industrial Relations Code are as follows:

4. Key Definitions and Concepts

The Code standardises definitions to ensure uniform interpretation across establishments. Important terms such as workers, wages, employer, employee, industrial establishment, industrial dispute, strike, lay-off, retrenchment, and closure are now codified in a single statute. The Code also defines new terms, such as fixed-term employment and negotiating union/negotiating council.

4.1 Uniform Definition of ‘Wages’ (Section 2(zq))

A single and consistent definition of wages has been applicable across all labour codes. Wages now include only basic pay, dearness allowance and retaining allowance. Other allowances, including HRA, overtime, bonus, or commissions, are excluded unless they exceed 50% of total wages, in which case the excess must be added back to compute wages.

4.2 Revised Definition of “Strike” (Section 2(zk))

The definition of ‘strike’ has been revised to include ‘concerted casual leave’ on a given day by 50% or more workers employed in an industry.

4.3 Introduction of “Fixed-Term Employment” (Section 2(o))

The concept of Fixed Term Employment (FTE) has been introduced, allowing the engagement of workers through a written contract between the employer and the employee for a fixed period. Such workers are entitled to all benefits, including working hours, wages, allowances, and statutory benefits, on par with permanent workers.

5. Framework Recognising Trade Unions or Council as Negotiating Bodies

The Industrial Relations Code, 2020, strengthens workers’ voice by recognising trade unions or councils as negotiating bodies. It provides clear rules for recognition and empowers workers to engage in structured collective bargaining, reducing ambiguity and promoting industrial harmony.

5.1 Statutory Recognition to Negotiating Unions (Section 14)

The Code provides for a negotiation union or a negotiating council in an industrial establishment with registered trade unions to negotiate with the employer.

If there is only one trade union functioning in an industrial establishment, the employer is required to recognise such trade union as the sole negotiating union of the workers.

In the case of multiple trade unions, the union representing at least 51% of the workers on the muster roll of that industrial establishment will be recognised by the employer as the sole negotiating union.

6. Legal Framework Governing Strikes and Lockouts

The provisions relating to ‘Strikes and Lockouts’ are specified in Sections 62 to 64 of the Code, which are as follows:

6.1 Mandatory 60-Day Notice Requirement (Section 62(1)(a)

No employee may go on strike, and no employer may declare a lockout without giving at least 60 days’ prior notice.

6.2 Cooling Off Period (Section 62(1)(b)

Strikes or lockouts cannot commence within 14 days of serving the notice. Flash strikes are also prohibited.

6.3 Prohibition During Ongoing Proceedings (Section 62(1))

Strikes or lockouts cannot be initiated in the following cases:

• During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings; or
• During the pendency of proceedings before a Tribunal or a National Industrial Tribunal, and 60 days after the conclusion of such proceedings, or
• During the pendency of arbitration proceedings before an arbitrator and 60 days after the conclusion of such proceedings.

6.4 Exemption from Notice Requirement in Case of Existing Strike or Lockout (Section 62(3))

The notice of strike or lockout must not be necessary where a strike or lockout is already in existence. However, the employer must send intimation of such lock-out or strike on the day on which it is declared to such authority as may be specified by the appropriate Government.

6.5 Illegality of Strikes and Lockouts (Section 63)

A strike or lock-out must be considered illegal if it is commenced or declared in contravention of Section 62 or continued in violation of an order made under Section 42(7) of the Code.

6.6 Prohibition on Financial Support to Illegal Strikes and Lockouts (Section 64)

A person is prohibited from knowingly spending or using money to directly support or promote any illegal strike or lockout.

7. Provisions on Retrenchment, Lay-Off and Closure

The key provisions are as follows:

7.1 Increased Threshold for Lay-Off, Retrenchment and Closure (Section 77)

The Code establishes that an industrial establishment[1] (not being an establishment of a seasonal character or in which work is performed only intermittently) employing 300 or more workers must obtain prior permission from the appropriate Government for lay-offs, retrenchments, and the closure of the establishment.

This threshold has been increased from 100 to 300 workers. This reduces procedural hurdles and simplifies compliance requirements, attracting investments and supporting the expansion of industries.

7.2 Compensation for Laid-off Workers (Section 67)

A worker (other than a badli or casual worker[2]) who has completed at least one year of continuous service and is laid-off must be paid by employer for all days of lay-off, except for weekly holidays. The compensation must be equal to 50% of the basic wages and dearness allowance that would have been payable if he had not been laid off.

However, if the worker is laid off for more than 45 days in a 12-month period, the employer does not have to pay compensation beyond the first 45 days if there is an agreement to that effect between the employer and the worker.

7.3 Mandatory 3-Month Notice Before Retrenchment (Section 79)

In case of retrenchment, the employer must either give three months’ written notice to the worker, indicating the reasons for retrenchment, or pay the retrenched worker, in lieu of notice, wages for the period of notice.

7.4 Financial Aid to Retrenched Workers Via ‘Workers’ Re-Skilling Fund’ (Section 83)

The Workers’ Re-skilling Fund is a fund created to provide financial assistance to retrenched workers so that they can upgrade their skills and improve their chances of re-employment.

7.4.1 Source of Contribution

The source of contribution is as follows:

• From Employer – The employer must contribute an amount equal to 15 days’ wages last drawn by the worker immediately before retrenchment.
• From Other Sources – The contribution can be received from sources as may be prescribed by the appropriate Government[3].

7.5 Utilisation of Re-Skilling Fund

The fund must be utilised by crediting 15 days’ last drawn wages into the account of the retrenched worker within 45 days of retrenchment.

8. Workplace Conduct and Employment Conditions

‘Standing Orders’ refer to a set of rules that define employment conditions and govern the conduct of both employers and employees in Industrial establishments.

8.1 Increased Threshold for Applicability of Standing Orders (Section 28)

As per Section 1(3) of the Industrial Employment (Standing Orders) Act, 1946, the threshold for applicability of Standing Orders earlier applied to every industrial establishment employing 100 or more workmen on any day of the preceding 12 months. This Act has now been repealed.

Under the Industrial Relations Code, 2020, the threshold for the applicability of Standing Orders has been increased from 100 to 300 workers. As a result, industrial establishments employing fewer than 300 workers are no longer required to have certified standing orders under the Industrial Employment (Standing Orders) Act, 1946.

This higher threshold aims to simplify compliance for smaller businesses by providing them greater flexibility in managing service conditions without being bound by certified rules.

8.1.1 Matters to Be Provided in Standing Orders (First Schedule)

The First Schedule of the Industrial Relations Code, 2020, sets out the matters to be provided in Standing Orders. The matters cover the following:

• Classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed-term employment.
• Manner of intimating to workers periods and hours of work, holidays, pay-days and wage rates.
• Shift working.
• Attendance and late coming.
• Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
• Requirement to enter premises by certain gates, and liability to search.
• Termination of employment, and the notice thereof to be given by employer and workers.
• Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
• Means of redress for workers against unfair treatment or wrongful exactions by the employer or his agents or servants.

9. Advancing Gender Equity at Work

The Code aims to ensure that women workers have a fair voice in workplace dispute resolution and that they feel more secure raising concerns when represented by peers.

9.1 Representation of Women in Grievance Redressal Committee (Section 4)

The Code provides for adequate representation of women workers in the Grievance Redressal Committee, ensuring that such representation is not less than their proportion in the total workforce of the industrial establishment. This promotes gender-sensitive dispute resolution, equality, and workplace safety.

10. Simplified and Streamlined Dispute Resolution Process

10.1 Voluntary Arbitration (Section 42)

The Code allows for industrial disputes to be voluntarily referred to arbitration by the employer and workers through a written agreement.  After investigating the dispute, the arbitrator will submit the arbitration award to the appropriate Government.

Industrial disputes cover both disputes other than termination of an individual worker by way of discharge, dismissal, or retrenchment and disputes related to termination of an individual worker by way of discharge, dismissal, or retrenchment.

10.2 Resolution of Industrial Disputes (Section 43/44/46)

The appropriate Government may appoint conciliation officers to mediate and promote the settlement of industrial disputes.  These officers will investigate the dispute and hold conciliation proceedings to arrive at a fair and amicable settlement of the dispute.   If no settlement is reached, either party to the dispute may make an application to the Industrial Tribunal constituted under the Code.

The appropriate Government may constitute one or more Industrial Tribunals for the settlement of industrial disputes. The Industrial Tribunal must consist of two members appointed by the appropriate Government, one of whom must be a Judicial Member and the other must be an Administrative Member.

Similarly, the Central Government may constitute one or more National Industrial Tribunals for the settlement of industrial disputes which:

1. involve questions of national importance, or
2. could impact industrial establishments situated in more than one State.

The National Industrial Tribunal will also have two members each, one judicial and one administrative, with the specified qualifications.

11. Ensuring Fair Practices At the Workplace

Both the employers and workers must ensure fair practices at the workplace. Their conduct

11.1 Prohibition of Unfair Labour Practice (Section 84)

The Code prohibits employers, workers and trade unions from committing any unfair labour practices listed in a Second Schedule to the Code. These include the following:

A. On the Part of Employers and Trade Union of Employers

The unfair practices on the part of employers are as follows:

• Threatening workers with discharge or dismissal, if they join a Trade Union;
• Threatening a lock-out or closure, if a Trade Union is organised;
• To establish employer-sponsored Trade Unions of workers;
• To abolish the work of a regular nature being done by workers, and to give such work to contractors as a measure of breaking a strike.
• To show favouritism or partiality to one set of workers regardless of merit.
• To indulge in acts of force or violence.
• To refuse to bargain collectively, in good faith with the recognised Trade Unions.
• To employ workers as badli workers, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workers.

B. On the Part of Workers and Trade Union of Workers

The unfair practices on the part of workers are as follows:

• To incite or indulge in wilful damage to the employer’s property connected with the industry;
• For a recognised union to refuse to bargain collectively in good faith with the employer.
• To advise or actively support or instigate any strike deemed to be illegal under this Code.
• To indulge in coercive activities against the certification of a bargaining representative.
• To stage demonstrations at the residence of the employers or the managerial staff members.

12. Decriminalization and Compounding of Offences

Under the Industrial Relations Code, 2020, several minor offences that previously attracted imprisonment or criminal liability have been decriminalized, and certain contraventions can now be compounded in the following manner[4]:

• For An Offence Punishable With Fine Only – The offence may be compounded by payment of 50% of the maximum fine.
• For An Offence Punishable With Imprisonment for Up to One Year and With Fine – The offence may be compounded by payment of 75% of the maximum fine.

Further, once an offence is compounded, no prosecution will be instituted against the offender for that offence.

13. Penalties Under the Industrial Relations Code

The table provides a summary of penalties applicable under the Code[5]. It highlights the nature of each offence and the corresponding penalties.

Relevant Sections/Offence	Type of Offence	Penalty for First Offence	Penalty for Subsequent Offence
Sections 78, 79, 80 (Lay-off, retrenchment & closure requiring prior permission under Chapter X)	Contravention of prior-permission requirements	Fine – Rs 1,00,000 – Rs 10,00,000	Fine – Rs 5,00,000 – Rs 20,00,000 or Imprisonment up to 6 months or both
Sections 67, 70, 73, 75 (Lay-off compensation, retrenchment procedure, transfer of establishment, closure notice & compensation)	Violation of procedural or compensation requirements	Fine – Rs 50,000 – Rs 2,00,000	Fine – Rs 1,00,000 – Rs 5,00,000 or Imprisonment up to 6 months or both
Unfair Labour Practices (Second Schedule)	Committing any unfair labour practice	Fine – Rs 10,000 – Rs 2,00,000	Fine – Rs 50,000 – Rs 5,00,000 or Imprisonment up to 3 months or both
Default on the part of the Registered Trade Union in giving any notice or sending any statement or other document – Sec 86(7)	Failure to give or send statement/ notice/document	Fine – Rs 1,000 – Rs 10,000; additional Rs 50/day for continuing default	–
False entry/omission in a general statement or from a copy of the rules sent to the Registrar– Sec 86(8)	Wilful false entry or omission	Fine – Rs 2,000 – Rs 20,000	–
Giving to any member of a registered trade union, any document claiming to be a copy of the rules of a trade union  – Sec 86(9)	Wilfully providing incorrect rules of Trade Union	Fine – Rs 5,000 – Rs 20,000	–
Employer fails to submit/modifies standing orders improperly – Sec 86(10)	Non-submission or unauthorised modification of standing orders	Fine – Rs 50,000 – Rs 2,00,000; additional Rs 2,000/day for continuing offence	–
Employer acts contrary to certified standing orders – Sec 86(11)	Contravening certified standing orders	Fine – Rs 1,00,000 – Rs 2,00,000	Fine – Rs 2,00,000 – Rs 4,00,000 or Imprisonment up to 3 months or both
Worker participates in illegal strike – Sec 86(13)	Participation in illegal strike	Fine – Rs 1,000 – Rs 10,000 or Imprisonment up to 1 month or both	–
Employer participates in illegal lock-out – Sec 86(14)	Participation in illegal lock-out	Fine – Rs 50,000 – Rs 1,00,000; or imprisonment up to 1 month or both	–
Person instigates illegal strike/lock-out – Sec 86(15)	Inciting others to strike/lock-out	Fine – Rs 10,000 – Rs 50,000; or imprisonment up to 1 month or both	–
Person finances illegal strike/lock-out – Sec 86(16)	Spending money to support an illegal strike/lockout	Fine – Rs 10,000 – Rs 50,000; or imprisonment up to 1 month or both	–
Breach of any term of binding settlement/award – Sec 86(17)	Violating binding settlement/award	Fine – Rs 20,000 – Rs 2,00,000; or imprisonment up to 3 months or both	Additional fine of Rs 1,000/day for continuing breach (Sec 86(18))
Wilful disclosure of information – Sec 86(19)	Disclosing confidential info contrary to Section 61	Fine – up to Rs 20,000 or imprisonment up to 1 month or both	–
Contravention of any other provision/rule under the Code – Sec 86(20)	Any other violation not covered above	Fine – up to Rs 1,00,000	–

14. Exemptions from Applicability of the Code

The Industrial Relations Code, 2020, provides that the appropriate Government may, by notification, exempt, conditionally or unconditionally, any new establishment or a class of new establishments from all or any of the provisions of the Code[6].

15. Conclusion

The Industrial Relations Code, 2020, brings India’s labour framework into a modern, unified structure that promotes clarity, fairness, and industrial stability. By raising thresholds for retrenchment, lay-offs, and standing orders, it eases compliance for smaller and medium-sized employers, allowing more operational flexibility. The Code recognises trade unions or councils as negotiating bodies, thereby strengthening structured collective bargaining. It modernises definitions such as “strike” and introduces “fixed-term employment,” ensuring clarity in employment arrangements.

Further, dispute resolution has been streamlined through conciliation officers, industrial tribunals, national tribunals, and voluntary arbitration, reducing delays and promoting fair settlements. The Code also enforces fair workplace practices, ensures gender representation in grievance committees, and provides financial support for retrenched workers via the Workers’ Re-skilling Fund. Overall, these reforms create a balanced and harmonious industrial environment, promoting both worker welfare and business efficiency.

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[1] Section 77(3) of Industrial Relations Code, 2020

[2] Explanation to Section 67 of Industrial Relations Code, 2020

[3] Section 2(b) of Industrial Relations Code, 2020

[4] Section 89 of Industrial Relations Code, 2020

[5] Section 86 of Industrial Relations Code, 2020

[6] Section 96 of Industrial Relations Code, 2020

The post [Analysis] The Industrial Relations Code 2020 – Key Provisions | Applicability | Compliance Framework appeared first on Taxmann Blog.

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Case Details: Smt. Mina Kiranbhai Shah vs. Initiating Officer, BPU [2025] 180 taxmann.com 708 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• Munishwar Nath Bhandari, Chairman & Gopal Chandra Mishra, Member
• Kanhaiya Singhal, SPP, Prasanna, Ajay Kumar, Rhythm Bhardwaj & Ms Avantika Shankar, Advs. for the Respondent.

Facts of the Case

During a survey at a bank branch, it was found that a large amount of cash in old denominations had been deposited into various bank accounts operated by six persons. Further investigation revealed that cash had been deposited into the bank account of a proprietorship firm.

During the recording of statements, the account operators admitted that the cash did not belong to them, the account holders, and that there was no business activity in the account. It was further revealed that the cash received from beneficiaries was later transferred to the appellant, the beneficiary.

SAFEMA Held

The Adjudicating Authority held that the bank account was used to settle demonetised funds at the relevant time through a benami transaction. He thus confirmed the Provisional Attachment Order.

The assessee filed an appeal to the Tribunal. The Tribunal held that the assessee claimed ignorance about the transaction as her husband managed her bank account. It was even in her statement under section 131, but ignorance would not absolve the appellant from the benami transaction. It is even more so when it happened in her bank account. It is not that the appellant pleaded total ignorance of the receipt of the money; instead, on enquiry, it was shown that the money was received out of the sale of property, which, according to the appellant herself, did not materialise, and the money was still kept. There is no document showing the sale transaction for receiving a hefty amount of Rs. 71.50 lakhs in advance or otherwise. In fact, no Agreement to Sell has been placed on record.

The fact further remains that the amount aforesaid was transferred from the account of the benamidar with whom the appellant has not shown any transaction to justify the receipt of the amount. Using the banking channel, the group of persons got involved in converting demonetised money through the bank. The appellant persuaded herself or, through her husband, to get demonetised money monetised and entered into a benami transaction under which the property was first transferred to a benamidar through the persons, and then received back by the beneficial owner as a future benefit.

Thus, the order holding a case of a benami transaction was justified.

The post Benami Proceedings Valid Despite Subsequent Assessment as Undisclosed Income | SAFEMA appeared first on Taxmann Blog.

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Circular eF.No. IFSCA-DSI/12/2025-Capital Markets, Dated: 26.11.2025

1. Overview

The International Financial Services Centres Authority (IFSCA) has issued a directive requiring Global Access Providers (GAPs) and Introducing Brokers (IBs) to display key risk disclosures to clients at every login.

This mandate aims to strengthen investor awareness and ensure that clients are fully informed of the risks associated with accessing global markets through IFSC intermediaries.

2. Mandatory Display of Key Risks

As per the circular, the following key risks listed in Annexure I must be prominently displayed to clients at each login session:

2.1 Market and Interest Rate Risks

• Volatility in global markets
• Fluctuations in interest rates affecting asset values

2.2 Currency Movement Risks

• Forex fluctuations impacting returns
• Exposure to currency conversion losses

2.3 Custody and Settlement Risks

• Risks arising from foreign custodians
• Settlement delays, failures, or cross-border operational constraints

2.4 Technology and Cybersecurity Risks

• Potential system outages
• Cyber-attacks, data breaches, and platform vulnerabilities

2.5 Regulatory and Taxation Risks

• Changes in foreign regulations
• Divergent tax rules that may impact investor obligations and returns

These disclosures are intended to ensure that clients understand the inherent risks associated with international market access and cross-border products.

3. Compliance Requirements for GAPs and IBs

3.1 Display Format and Placement

GAPs and IBs must:

• Display risk disclosures exactly in the manner prescribed under Clause 39 of the circular,
• Ensure they appear prominently and unavoidably upon each client login,
• Implement the disclosure mechanism across all platforms, including mobile apps and web portals.

4. Implementation Timeline

IFSCA has stipulated that full compliance must be ensured by December 31, 2025.

Entities are expected to upgrade systems, interfaces, and investor communication modules to meet this deadline.

5. Significance

This directive aims to:

• Enhance transparency and investor protection,
• Promote informed decision-making by clients accessing global markets,
• Reduce the likelihood of disputes by setting clear expectations on risks,
• Strengthen IFSC market infrastructure in line with global best practices.

Click Here To Read The Full Circular

The post IFSCA Mandates Display of Key Global Access Risks at Every Client Login appeared first on Taxmann Blog.

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