CS Executive · Setting Up of Business, Industrial and Labour Laws

Evaluation of Labour Legislation and need of Labour Code: formula sheet

Full chapter guide

Key formulas

Constitutional base: Fundamental Rights + Directive Principles + Concurrent List = source of labour law; Labour is a Concurrent List subject, so Centre and States can both legislate.
Concurrent List entries: Entry 22: trade unions, industrial and labour disputes | Entry 23: social security, employment | Entry 24: welfare of labour; Check exact wording in your study material before quoting.
Four Labour Codes: Wages + Industrial Relations + Social Security + OSH and Working Conditions; All four consolidate earlier Central labour Acts.
Repeal and savings (OSH Code, s. 143): Repealed Acts listed; officers deemed appointed; past actions deemed taken under the Code if not contrary to it; Section 6 of the General Clauses Act, 1897 applies to the repeal.
More favourable benefits (IR Code, s. 76): A worker keeps more favourable benefits under other law, standing orders, award or contract; Applies to the relevant Chapter of the Code, which prevails over inconsistent law otherwise.
Four-group classification: Industrial relations + Wages + Social security + Safety, health and working conditions; This matches the four Labour Codes. Use it as the skeleton of any classification answer.
Core objectives: Protection of workers + Social justice + Industrial peace + Productivity and economic growth; Link each law you mention to one of these aims.
Social security institutions (Code on Social Security, 2020): National Social Security Board (s. 6) for unorganised, gig and platform workers; State Unorganised Workers' Social Security Board (s. 6); Social Security Fund (s. 141); Shows social security as a State-supported welfare measure. The National Board's term is three years, and it meets at least thrice a year.
Gig and platform worker schemes: Aggregator contribution: not less than 1% and not more than 2% of annual turnover, capped at 5% of the amount paid or payable to gig and platform workers (s. 114(4)); The rate within this range is notified by the Central Government, for aggregators in categories specified in the Seventh Schedule.
Number of laws and Codes: 29 Central labour laws → 4 Codes; Remember the number consolidated and the four Codes by name.
Four Codes by subject: Wages | Industrial Relations | Social Security | Occupational Safety, Health and Working Conditions; Wages: pay and bonus. Industrial Relations: unions, standing orders, disputes, strikes. Social Security: provident fund, ESI, gratuity and similar benefits. OSH: safety, health, working conditions.
Source of the idea: Second National Commission on Labour (2002) → recommended grouping central labour laws into broad Codes; Link the recommendation with simplification, uniform definitions and wider coverage.
Commencement: All four Codes in force from 21 November 2025; State this date when a question asks about present status.
Social Security Code, section 6 boards: National Social Security Board: term 3 years, meets at least thrice a year. State Unorganised Workers' Board: term 3 years, meets at least once in a quarter; Useful example of the Code's institutions for unorganised workers, gig workers and platform workers.
Laws subsumed: Trade Unions Act, 1926 + Industrial Employment (Standing Orders) Act, 1946 + Industrial Disputes Act, 1947 → Industrial Relations Code, 2020; Learn all three with their years. Questions often ask you to list them.
Test for a worker: Employed in an industry + one of the listed types of work + hire or reward, minus the exclusions; Exclusions: apprentices, armed forces, police or prison service, managerial or administrative role, and supervisory role above the wage limit (₹18,000 per month or the notified amount).
Industrial dispute: Dispute or difference between employers/workers (any pair) + connected with employment, non-employment, terms of employment or conditions of labour; An individual worker's dispute on discharge, dismissal, retrenchment or termination is also covered.
Representation in proceedings (section 94): No legal practitioner in conciliation or before a Tribunal or National Industrial Tribunal, unless the other parties consent and the Tribunal grants leave; Section 94(3) states the bar; section 94(4) gives the exception. Both conditions must be met.
Prohibition (section 84): No employer / worker / trade union (registered or not) shall commit any unfair labour practice specified in the Second Schedule; The prohibition covers only practices listed in the Second Schedule.
First offence penalty (section 86(5)): Fine: minimum ₹10,000, maximum ₹2,00,000; Applies to any person who commits an unfair labour practice specified in the Second Schedule.
Repeat offence penalty (section 86(6)): Fine: ₹50,000 to ₹5,00,000, or imprisonment up to 3 months, or both; Applies to a person who again commits the same offence after conviction.
Related penalty: illegal strike by worker (section 86(13)): Fine ₹1,000 to ₹10,000, or imprisonment up to 1 month, or both; Use only to contrast with unfair labour practice.
Related penalty: illegal lock-out by employer (section 86(14)): Fine ₹50,000 to ₹1,00,000, or imprisonment up to 1 month, or both; Use only to contrast with unfair labour practice.

Quick revision

Four Codes: Wages 2019, Industrial Relations 2020, Social Security 2020, Occupational Safety, Health and Working Conditions 2020.
Paper 3 Part II (Industrial and Labour Laws) is worth 40 marks and is taught on the four Labour Codes.
The Industrial Relations Code extends to the whole of India.
The Industrial Relations Code came into force on 21 November 2025, by notification of the Central Government.
The Occupational Safety, Health and Working Conditions Code also came into force on 21 November 2025.
The Central Government can appoint different dates for different provisions of a Code.
Section 84 of the Industrial Relations Code prohibits unfair labour practices specified in the Second Schedule.
Section 84 binds employers, workers and Trade Unions, whether or not registered under the Code.
The Code on Wages, 2019 has effect notwithstanding inconsistent laws, awards, agreements, settlements or contracts of service (Section 61).
Under the Code on Social Security (Section 161), a person keeps more favourable benefits under an agreement or contract of service.
Section 161 also allows an employer and worker to agree on rights more favourable than the Code gives.
Write answers in this order: provision, analysis, conclusion.

Common mistakes

Saying labour is in the State List or Union List only. Fix: State that labour is a Concurrent List subject, so both Parliament and State Legislatures can legislate.
Mixing up Fundamental Rights and Directive Principles. Fix: Rights such as the ban on forced labour are enforceable. Directive Principles such as a living wage guide the State and are not directly enforceable.
Listing individual Acts without any grouping. Fix: Always put the group heading first, then the subjects or Acts under it.
Treating social justice and industrial peace as the same thing. Fix: Social justice is about fair treatment and a decent standard of living. Industrial peace is about reducing conflict and keeping production running. Explain each separately.
Writing that the Codes repealed all labour laws, including State laws and the Constitution's provisions. Fix: Say that 29 Central labour laws were consolidated into four Codes. Do not claim more.
Mixing up the subjects of the four Codes, such as placing bonus or gratuity under Industrial Relations. Fix: Link each Code to a core idea: wages and bonus, unions and disputes, benefits and funds, safety and working conditions.
Listing only the Industrial Disputes Act, 1947 as the subsumed law. Fix: Always write all three: Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946; Industrial Disputes Act, 1947.
Treating every employee as a worker. Fix: Check for apprentices, managerial or administrative roles, armed forces or police, and supervisors above the wage limit before concluding.
Saying only employers can commit unfair labour practices. Fix: Remember section 84 names three parties: employer, worker and trade union.
Saying section 84 does not apply to an unregistered trade union. Fix: Quote the words: whether registered under this Code, or not.

Exam tips

Write the answer as a time-line with clear phase headings, then a conclusion.
Always mention that labour is on the Concurrent List and name entries 22, 23 and 24 with their themes.
Cite at least one Code provision, such as section 143 of the OSH Code or section 76 of the IR Code, to show current-law awareness.
Avoid giving repealed Acts as the present law. Say they are repealed by the Codes.
Keep short notes to four or five lines per phase so you finish in time.
Start with the four-group classification. It is the most likely expected answer for 'classify' or 'types' questions.
Always attach an objective to each group. This turns a list into analysis and earns more marks.
Remember the ICSI answer shape: provision, analysis, conclusion. Cite the Code and section where you quote a rule, such as sections 6, 114 and 141 of the Code on Social Security, 2020.