Background
The Industrial Relations Code, 2020 is a central labour code enacted by Parliament that consolidates and amends the laws relating to trade unions, conditions of employment in industrial establishments, and the investigation and settlement of industrial disputes. It subsumes the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947, and was brought into force by the Central Government with effect from 21 November 2025, with a subsequent 2026 amendment to the Code clarifying that the three subsumed enactments stand repealed from that date. The Code establishes a unified framework covering Grievance Redressal Committees, registration and functioning of trade unions, standing orders and subsistence allowance during suspension, notice requirements and prohibitions on strikes and lock-outs, the conditions governing lay-off, retrenchment, transfer and closure, the enhanced Chapter X regime requiring prior Government permission for larger establishments, and the prohibition of unfair labour practices, all backed by a graded penalty structure under section 86.
To operationalise the Code in the State, the Government of Uttarakhand, exercising its powers under section 99 of the Code, notified the Uttarakhand Industrial Relations Rules, 2026 vide Notification No. 1117/VIII-1/2026-39(Labour)2018 dated 25 August 2026, extending to the whole of Uttarakhand and effective from the date of their publication in the Official Gazette. The Rules prescribe the procedures, forms and authorities for matters such as settlements, the functioning of Grievance Redressal Committees, trade union contributions and audit, and the intimation of strike and lock-out notices, including the requirement under Rule 46(2) that employers intimate lock-out notices to the concerned conciliation officer and the Regional Deputy Labour Commissioner.
Applicability
The obligations in this blog apply to industrial establishments operating in Uttarakhand and to the employers, workers and Trade Unions connected with them: establishments employing twenty or more workers must constitute Grievance Redressal Committees; establishments with registered Trade Unions, and those unions themselves, must observe the membership, political fund, minor-membership and unfair labour practice provisions; all establishments are bound by the rules on strikes and lock-outs, wages pending higher-court proceedings, retrenchment, transfer and closure; establishments employing fifty to two hundred and ninety-nine workers are covered by the lay-off compensation and muster roll requirements; and establishments employing three hundred or more workers are subject to the subsistence allowance provisions and the Chapter X requirement of three months’ notice and prior State Government permission before retrenchment.
Compliance Requirement Under the Rules in Accordance with the Code
The following section sets out the key compliance obligations under the Industrial Relations Code, 2020 and the Uttarakhand Industrial Relations Rules, 2026.
Every industrial establishment employing twenty or more workers shall have one or more Grievance Redressal Committees for the resolution of disputes arising out of individual grievances.
The Chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workers alternately, on a rotation basis, every year.
The Grievance Redressal Committee may complete its proceedings within thirty days of receipt of a written application made by or on behalf of the aggrieved party. The decision of the Committee shall be based on the majority view of the Committee, provided that more than half of the members representing the workers have agreed to such decision; otherwise, the decision shall be deemed not to have been arrived at.
A registered Trade Union of workers shall at all times continue to have as its members not less than ten per cent of the workers or one hundred workers, whichever is less, subject to a minimum of seven, engaged or employed in the industrial establishment or industry with which it is connected.
Contribution to the separate fund of a Trade Union shall be voluntary, and no member shall be compelled to contribute to it. A member who does not contribute shall not be excluded from any benefits of the Trade Union or placed in any respect, either directly or indirectly, at a disadvantage as compared with other members, except in relation to the control or management of the separate fund, and contribution to that fund shall not be made a condition for admission to the Trade Union.
Any person who has attained the age of fourteen years and is employed in a non-hazardous industry may, subject to the rules of the Trade Union, be a member of a registered Trade Union, and may enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under those rules.
Where a worker is suspended pending investigation or inquiry into complaints or charges of misconduct, the employer shall pay the worker subsistence allowance equal to fifty per cent of the wages to which the worker was entitled immediately preceding the date of suspension for the first ninety days of suspension, and seventy-five per cent of such wages for the remaining period of suspension, where the delay in completing the disciplinary proceedings is not directly attributable to the conduct of the worker.
Where a Tribunal or a National Industrial Tribunal by its award directs the reinstatement of a worker and the employer prefers proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay the worker, during the pendency of such proceedings, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule, if the worker had not been employed in any establishment during that period and has filed an affidavit to that effect in such Court. However, where it is proved to the satisfaction of the Court that the worker had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable for such period or part.
Where the employer gives a notice of lock-out to any person employed by him, the employer shall, within five days from the date of such notice, intimate the same, electronically or otherwise, to the concerned conciliation officer and the Regional Deputy Labour Commissioner.
No person employed in an industrial establishment shall go on strike in breach of contract (a) without giving the employer notice of strike within sixty days before striking; (b) within fourteen days of giving such notice; (c) before the expiry of the date of strike specified in any such notice; (d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings; (e) during the pendency of proceedings before a Tribunal or National Industrial Tribunal and sixty days after the conclusion of such proceedings; (f) during the pendency of arbitration proceedings before an arbitrator and sixty days after the conclusion of such proceedings, where a notification has been issued; or (g) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.
No employer of an industrial establishment shall lock-out any of his workers (a) without giving them notice of lock-out within sixty days before locking-out; (b) within fourteen days of giving such notice; (c) before the expiry of the date of lock-out specified in any such notice; (d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings; (e) during the pendency of proceedings before a Tribunal or National Industrial Tribunal and sixty days after the conclusion of such proceedings; (f) during the pendency of arbitration proceedings before an arbitrator and sixty days after the conclusion of such proceedings, where a notification has been issued; or (g) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.
This obligation applies to industrial establishments in which fifty or more workers were employed on an average per working day in the preceding twelve months, other than establishments in which work is of a seasonal character or performed only intermittently. Where any worker, other than a badli or casual worker, whose name is borne on the muster rolls of the industrial establishment and who has completed not less than one year of continuous service is laid-off, the employer shall pay him compensation for all days of lay-off, except intervening weekly holidays, equal to fifty per cent of the total basic wages and dearness allowance that would have been payable had he not been laid-off. Where, during any period of twelve months, a worker is laid-off for more than forty-five days, no compensation shall be payable for the period beyond the first forty-five days if there is an agreement to that effect between the worker and the employer, and the employer may retrench the worker after the expiry of the first forty-five days of lay-off, in which case any compensation paid for lay-off during the preceding twelve months may be set off against the retrenchment compensation payable.
Notwithstanding that workers in an industrial establishment have been laid-off, every employer shall maintain a muster roll and provide for the making of entries therein by workers who present themselves for work at the establishment at the appointed time during normal working hours.
No lay-off compensation shall be paid to a laid-off worker (i) who refuses to accept alternative employment in the same establishment, or in any other establishment belonging to the same employer situated within a radius of eight kilometres, which does not call for any special skill or previous experience and carries the wages normally payable; (ii) who does not present himself for work at the establishment at the appointed time during normal working hours at least once a day; or (iii) where the lay-off is due to a strike or slowing-down of production on the part of workers in another part of the establishment. The employer shall ensure that compensation is withheld only in these cases.
No worker employed in an industrial establishment who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the worker has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the worker has been paid wages for the period of the notice in lieu of such notice; and (b) the worker has been paid, at the time of retrenchment, compensation equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.
Where any worker in an industrial establishment who is a citizen of India and belongs to a particular category of workers in that establishment is to be retrenched, the employer shall ordinarily retrench the worker who was the last person to be employed in that category, unless the employer, for reasons to be recorded, retrenches any other worker, or there is an agreement between the employer and the worker providing otherwise.
Where the ownership or management of an establishment is transferred, by agreement or by operation of law, to a new employer, every worker who has been in continuous service for not less than one year immediately before such transfer shall be entitled to notice and compensation in accordance with section 70 as if the worker had been retrenched, unless (a) the service of the worker has not been interrupted by the transfer; (b) the terms and conditions of service applicable to the worker after the transfer are not in any way less favourable than those applicable immediately before the transfer; and (c) the new employer is, under the terms of the transfer or otherwise, legally liable to pay retrenchment compensation to the worker on the basis that his service has been continuous and uninterrupted.
Where an undertaking is closed down for any reason, every worker who has been in continuous service for not less than one year immediately before such closure shall be entitled to notice and compensation in accordance with section 70 as if the worker had been retrenched. Where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation shall not exceed the average pay for three months; however, financial difficulties (including financial losses), accumulation of undisposed stocks, expiry of the period of a lease or licence, and, in the case of a mine, exhaustion of minerals, shall not be treated as unavoidable circumstances. Special provisions apply to mines closed on exhaustion of minerals where alternative employment is offered, and to undertakings set up for the construction of buildings, bridges, roads, canals, dams or other construction work that are closed down on completion of the work within two years.
No worker employed in an industrial establishment to which Chapter X applies, who has been in continuous service for not less than one year under an employer, shall be retrenched by that employer until the worker has been given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the worker has been paid wages for the period of the notice in lieu of such notice, and the prior permission of the State Government has been obtained on an application made in the prescribed manner.
No employer or worker or Trade Union, whether registered under the Code or not, shall commit any unfair labour practice specified in the Second Schedule to the Code.
Penalty & Consequences
Section 86(1) of the Industrial Relations Code, 2020 — Contravention of Sections 78, 79 or 80 (Chapter X lay-off, retrenchment and closure)
An employer who contravenes the provisions of section 78, section 79 or section 80 shall be punishable with fine which shall not be less than one lakh rupees, but which may extend to ten lakh rupees.
Section 86(2) of the Industrial Relations Code, 2020 — Repeat contravention of Sections 78, 79 or 80
On a second or subsequent conviction for the same offence under section 78, 79 or 80, the employer shall be punishable with fine which shall not be less than five lakh rupees, but which may extend to twenty lakh rupees, or with imprisonment for a term which may extend to six months, or with both.
Section 86(3) of the Industrial Relations Code, 2020 — Contravention of Sections 67, 70, 73 or 75 (lay-off, retrenchment, transfer and closure compensation)
An employer who contravenes the provisions of section 67, section 70, section 73 or section 75 shall be punishable with fine which shall not be less than fifty thousand rupees, but which may extend to two lakh rupees.
Section 86(4) of the Industrial Relations Code, 2020 — Repeat contravention of Sections 67, 70, 73 or 75
On a second or subsequent conviction for the same offence under section 67, 70, 73 or 75, the employer shall be punishable with fine which shall not be less than one lakh rupees, but which may extend to five lakh rupees, or with imprisonment for a term which may extend to six months, or with both.
Section 86(5) of the Industrial Relations Code, 2020 — Unfair labour practice
Any person who commits any unfair labour practice specified in the Second Schedule shall be punishable with fine which shall not be less than ten thousand rupees, but which may extend to two lakh rupees.
Section 86(6) of the Industrial Relations Code, 2020 — Repeat unfair labour practice
On a second or subsequent conviction for the same unfair labour practice, the person shall be punishable with fine which shall not be less than fifty thousand rupees, but which may extend to five lakh rupees, or with imprisonment for a term which may extend to three months, or with both.
Section 86(7) of the Industrial Relations Code, 2020 — Default by registered Trade Union in giving notices or statements
If default is made on the part of any registered Trade Union in giving any notice or sending any statement or other document as required by or under any of the provisions of the Code, every office-bearer or other person bound by the rules of the Trade Union to give or send the same shall be punishable with fine which shall not be less than one thousand rupees, but which may extend to ten thousand rupees, and any continuing default shall be punishable with an additional penalty of fifty rupees per day for so long as the default continues.
Section 86(13) of the Industrial Relations Code, 2020 — Illegal strike
Any worker who commences, continues or otherwise acts in furtherance of a strike which is illegal under the Code shall be punishable with fine which shall not be less than one thousand rupees, but which may extend to ten thousand rupees, or with imprisonment for a term which may extend to one month, or with both.
Section 86(14) of the Industrial Relations Code, 2020 — Illegal lock-out
Any employer who commences, continues or otherwise acts in furtherance of a lock-out which is illegal under the Code shall be punishable with fine which shall not be less than fifty thousand rupees, but which may extend to one lakh rupees, or with imprisonment for a term which may extend to one month, or with both.
Section 86(20) of the Industrial Relations Code, 2020 — General penalty for other contraventions
Any person who contravenes any other provision of the Code not covered under sub-sections (1) to (19) of section 86, or the rules or regulations framed under the Code, shall be punishable with fine which may extend to one lakh rupees.
Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article.
