Context: As reported by Business Standard and CNBCTV18, the Industrial Relations Code (Amendment) Bill, 2026 has been introduced in the Lok Sabha to remove interpretational ambiguities regarding “repeal and savings” provisions under the Industrial Relations Code, 2020. The move seeks to prevent avoidable litigation and ensure continuity in labour adjudication.
The Industrial Relations Code, 2020 consolidated three major labour laws:
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
Key Amendments
1. Repeal Clarification
The amendment explicitly states that repeal of the three legacy laws operates by virtue of Section 104 of the Code itself, and not through any separate executive repeal mechanism. This removes ambiguity regarding the source of repeal authority.
2. Savings Continuity
It reinforces that past rights, liabilities, penalties, notifications, and ongoing proceedings under the old laws continue without disruption. This ensures smooth transition and protects pending disputes.
3. Legal Certainty Shield
The drafting has been tightened to guard against misconceived constitutional challenges such as ultra vires or excessive delegation arguments, which could otherwise undermine the Code’s implementation.
Why the Amendment Was Necessary
- High Litigation Burden: With nearly 54 million pending cases in Indian courts, even narrow interpretational disputes can escalate into prolonged litigation.
- Continuity Risks in Labour Disputes: Labour cases often span several years. Any uncertainty over “which law applies” can delay proceedings through preliminary objections.
- Large Compliance Universe: With approximately 7.7 crore MSMEs registered nationally, minor drafting ambiguities can multiply into widespread compliance confusion.
Significance
- Regulatory Predictability: Clear repeal mechanics stabilise the legal foundation for employers, trade unions, and labour authorities.
- Faster Dispute Resolution: Reduced scope for preliminary jurisdictional challenges allows tribunals to focus on substantive issues.
- Reform Credibility: Demonstrates legislative responsiveness to safeguard the labour code architecture, strengthening investor and labour confidence.
Potential Concerns
- Drafting Optics: A clarificatory amendment soon after enactment may raise concerns regarding initial drafting precision.
- Residual Transition Issues: Questions relating to subordinate legislation, rule-making, or forum transitions may still arise.
- Compliance Fatigue: Frequent amendments may create uncertainty, especially among MSMEs managing layered regulatory obligations.
The Amendment Bill primarily aims to ensure legal continuity and interpretational clarity, reinforcing the structural integrity of India’s labour reform framework.