LABOUR AND INDUSTRIAL LAW: QUICK REVISION NOTES FOR CLAT PG
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Hanspal Bakul7 min readThe most important development under Labour and Industrial Law to remember for CLAT PG 2027 is that all four Labour Codes came into force on 21 November 2025. They consolidate 29 Central labour laws. Therefore, these quick revision notes primarily follow the new Labour Codes rather than treating the repealed enactments as the current governing framework.
The earlier legislations, including the Industrial Disputes Act, 1947, Trade Unions Act, 1926, Factories Act, 1948, Minimum Wages Act, 1948 and Payment of Wages Act, 1936, remain important for understanding the evolution of labour jurisprudence and landmark judgments.
Definition of of "Industry" Revisited by 9-Judges Bench of Supreme Court
The four Labour Codes at a glance
| Labour Code | Main subject | Earlier laws consolidated |
| Code on Wages, 2019 | Minimum wages, payment of wages, bonus, equal remuneration | 4 |
| Industrial Relations Code, 2020 |
PART I - CONSTITUTIONAL FRAMEWORK OF LABOUR LAW
Labour law in India is closely connected with the constitutional ideals of social justice, equality, dignity and protection against exploitation.
1. Fundamental Rights
| Article | Subject | Labour law significance |
| Article 14 | Equality before law | Prohibits arbitrary discrimination in employment. |
| Article 16 |
2. Directive Principles of State Policy
These provisions guide the State in framing labour welfare legislation.
- Article 38: State must promote social, economic and political justice and minimise inequalities.
- Article 39(a): Adequate means of livelihood for men and women.
- Article 39(d): Equal pay for equal work.
- Article 39(e): Protection of workers' health and strength.
- Article 39(f): Protection of children against exploitation.
3. Legislative competence
Labour is primarily a Concurrent List subject under the Seventh Schedule.
Important entries:
- Entry 22 - Trade unions; industrial and labour disputes.
- Entry 23 - Social security and social insurance; employment and unemployment.
- Entry 24 - Welfare of labour, including conditions of work, provident funds, employers' liability, compensation, invalidity and old-age pensions, maternity benefits.
PART II - INDUSTRIAL RELATIONS CODE, 2020
In force from 21 November 2025
The Industrial Relations Code, 2020 consolidates the laws relating to:
- Trade unions.
- Conditions of employment in industrial establishments.
- Investigation and settlement of industrial disputes.
- Strikes and lock-outs.
- Lay-off, retrenchment and closure.
It replaces the:
- Trade Unions Act, 1926.
- Industrial Employment (Standing Orders) Act, 1946.
- Industrial Disputes Act, 1947.
1. Important definitions
Section 2 - Definitions
Important expressions include:
- Worker - Section 2(zr).
- Employer - Section 2(m).
- Industry - Section 2(p).
- Industrial dispute - Section 2(q).
- Industrial establishment or undertaking - Section 2(r).
- Strike - Section 2(zk).
- Retrenchment - Section 2(zh).
2. Trade Unions
Trade unions are organisations formed to regulate relations between employers and workers and protect the collective interests of workers.
The earlier Trade Unions Act, 1926 has been subsumed into Chapter III of the Industrial Relations Code, 2020.
Important provisions
| Provision | Subject |
| Section 5 | Appointment of Registrar |
| Section 6 | Criteria for registration |
| Section 7 |
A. Registration of trade unions
- A trade union must apply for registration to the Registrar.
- The minimum membership requirement is seven members.
- The union must satisfy the statutory membership threshold under Section 6.
- For a workers' union, the membership requirement is at least 10% of the workers or 100 workers, whichever is less, subject to a minimum of seven members.
B. Legal status
Under Section 12, a registered trade union becomes a body corporate.
It has:
- Perpetual succession.
- A common seal.
- Capacity to acquire and hold property.
- Capacity to contract.
- Capacity to sue and be sued.
C. Negotiating union and negotiating council - Section 14
- Where only one registered trade union exists, it may be recognised as the negotiating union, subject to statutory conditions.
- Where multiple registered trade unions exist, the union having at least 51% of the workers on the muster roll as members is recognised as the negotiating union.
- If no union achieves 51%, a negotiating council is constituted from qualifying registered trade unions having at least 20% membership.
D. Immunities of trade unions
- Section 17: Limited immunity from civil proceedings for acts done in contemplation or furtherance of a trade dispute.
- Section 18: Protection from criminal conspiracy liability under Section 120A IPC, now read with the corresponding provision of the Bharatiya Nyaya Sanhita, for agreements relating to legitimate trade union activities, provided the agreement does not involve an offence.
Trade Unions under Industrial Law
3. Industrial Disputes
An industrial dispute generally concerns disagreements between employers and employers, employers and workers, or workers and workers relating to employment, non-employment, terms of employment or conditions of labour.
Important provisions of the Industrial Relations Code
| Section | Topic |
| Section 42 | Voluntary reference of disputes to arbitration |
| Section 43 | Conciliation officers |
| Section 44 |
A. Industrial dispute settlement machinery
1. Conciliation Officer - Section 43
- Appointed by the appropriate Government.
- Attempts to bring about an amicable settlement.
- Performs a conciliatory rather than adjudicatory function.
2. Industrial Tribunal - Section 44
- Adjudicates industrial disputes.
- Deals with matters falling within its statutory jurisdiction.
- Exercises quasi-judicial powers.
3. National Industrial Tribunal - Section 46
Constituted by the Central Government for industrial disputes involving questions of national importance or affecting industrial establishments situated in more than one State.
4. Voluntary arbitration - Section 42
Parties may voluntarily refer an industrial dispute to arbitration through a written agreement in accordance with the Code.
B. Strikes and lock-outs
Section 62 - Prohibition of strikes and lock-outs
A worker cannot legally commence a strike in breach of contract:
- Without giving notice of strike within 60 days before striking.
- Within 14 days of giving the notice.
- Before the date specified in the strike notice.
- During pending conciliation proceedings and seven days after their conclusion.
- During proceedings before a Tribunal or National Industrial Tribunal and 60 days after their conclusion.
- During arbitration proceedings and 60 days after their conclusion, where the statutory conditions apply.
Section 63: Strikes and lock-outs commenced or declared in contravention of Section 62 are illegal.
Constitutional connection: Article 19(1)(c) protects the right to form associations and unions, but does not confer a fundamental right to strike.
C. Lay-off, retrenchment and closure
| Concept | Meaning |
| Lay-off | Employer's inability, failure or refusal to provide employment due to specified operational reasons. |
| Retrenchment | Termination of service by the employer for any reason whatsoever, subject to statutory exclusions. |
| Closure |
Retrenchment - Section 72
Important requirements include:
- One month's notice indicating reasons for retrenchment or payment in lieu of notice.
- Compensation equivalent to 15 days' average pay for every completed year of continuous service or part thereof in excess of six months.
- Notice to the appropriate Government in the prescribed manner.
Special provisions - Sections 77-80
Chapter X introduces additional requirements for certain establishments.
The special prior-permission regime generally applies to industrial establishments covered by the statutory threshold of 300 or more workers, subject to the provisions of the Code and applicable notifications.
4. Standing Orders
Standing orders prescribe the conditions of employment and regulate the relationship between employers and workers.
They deal with:
- Classification of workers.
- Working hours.
- Holidays and leave.
- Attendance.
- Misconduct.
- Disciplinary action.
- Suspension and termination.
Important provisions:
- Section 28 - Application of the chapter relating to standing orders.
- Section 29 - Model standing orders.
- Section 30 - Preparation of draft standing orders.
- Section 31 - Certification of standing orders.
- Section 32 - Appeals.
- Section 33 - Date of operation of standing orders.
The standing orders chapter generally applies to industrial establishments employing 300 or more workers.
5. Grievance Redressal Committee
Section 4 - Grievance Redressal Committee
- Establishments employing 20 or more workers must constitute a Grievance Redressal Committee.
- It deals with individual grievances arising out of employment.
- Equal representation of employer and workers is required.
- The prescribed representation of women workers must be maintained where women are employed.
PART III - CODE ON WAGES, 2019
In force from 21 November 2025
The Code on Wages, 2019 consolidates four earlier laws:
- Minimum Wages Act, 1948.
- Payment of Wages Act, 1936.
- Payment of Bonus Act, 1965.
- Equal Remuneration Act, 1976.
1. Important provisions
| Section | Subject |
| Section 2 | Definitions |
| Section 3 | Prohibition of discrimination on ground of gender |
| Section 4 |
2. Minimum wages
Section 5 - Payment of minimum rate of wages
No employer can pay an employee less than the minimum wage notified by the appropriate Government.
Section 6 - Fixation of minimum wages
The appropriate Government fixes minimum wages, considering factors such as:
- Skill required.
- Geographical area.
- Nature of employment.
- Difficulties and conditions of work.
Section 9 - Floor wage
- Central Government fixes a floor wage.
- Different floor wages may be fixed for different geographical areas.
- State Governments cannot fix minimum wages below the applicable floor wage.
- If an existing State minimum wage is higher than the floor wage, it cannot be reduced merely because the floor wage is lower.
| Minimum wage | Living wage |
| Statutory minimum below which payment is prohibited. | Wage intended to secure a decent standard of living. |
| Enforceable through wage legislation. | Constitutional objective under Article 43. |
3. Payment of wages
Section 16: Wages may be paid in cash, by cheque, through bank credit or electronic mode, subject to the Code.
Section 17: Prescribes the time limits for payment of wages.
Important limits:
- Daily wages - at the end of the shift.
- Weekly wages - before the weekly holiday.
- Fortnightly wages - within two days after the end of the fortnight.
- Monthly wages - before the expiry of the seventh day of the succeeding month.
In case of removal, dismissal, retrenchment, resignation or unemployment due to closure, wages payable must generally be paid within two working days.
4. Deductions from wages
Section 18
Deductions can be made only as authorised by the Code.
Examples:
- Fines.
- Absence from duty.
- Damage or loss.
- House accommodation.
- Recovery of advances.
- Income tax.
- Provident fund contributions.
The total deductions in a wage period ordinarily cannot exceed 50% of wages.
5. Equal remuneration
Section 3
Prohibits gender-based discrimination in wages for the same work or work of a similar nature.
It also prohibits discrimination on the ground of gender in recruitment and conditions of employment for the same or similar work, subject to statutory exceptions.
There was an explicit mention of the "Authority of Council" and "Broad View" tests established by the SC. The Court held that to determine if work is of a "similar nature," one must look at the duties actually performed, not just the job designation or minute differences in working hours.
6. Bonus
The Code retains the framework of statutory bonus.
- Section 26 - Eligibility.
- Section 29 - Minimum bonus.
- Section 31 - Maximum bonus.
Minimum bonus: 8.33% of the wages earned or ₹100, whichever is higher, subject to statutory conditions.
Maximum bonus: 20% of wages.
The employee must satisfy the statutory eligibility conditions, including the prescribed wage ceiling and minimum days of work.
- Jalan Trading Co. v. Mill Mazdoor Sabha (1966) - The Supreme Court upheld the general validity of the Payment of Bonus Act, it struck down Section 10 (retrospective effect) and Section 33 and 34(2) as unconstitutional (violative of Article 14).
- Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai (1976) - Bonus and the rights of workers.
PART IV - CODE ON SOCIAL SECURITY, 2020
In force from 21 November 2025
The Code on Social Security, 2020 aims to extend social security protection to employees, organised workers, unorganised workers, gig workers and platform workers.
It consolidates nine Central labour legislations, including laws concerning:
- Employees' Provident Fund.
- Employees' State Insurance.
- Gratuity.
- Maternity benefits.
- Employees' compensation.
- Unorganised workers' social security.
- Building and other construction workers' welfare.
1. Important provisions
| Section | Subject |
| Section 2 | Definitions |
| Section 3 | Registration of establishments |
| Section 4 |
2. Employees' Provident Fund (EPF)
Provident fund is a social security mechanism designed to provide financial protection after retirement.
- Section 5 - Employees' Provident Fund Scheme.
- Section 6 - Employees' Pension Scheme.
- Section 7 - Employees' Deposit Linked Insurance Scheme.
The Central Government may frame schemes for provident fund, pension and insurance benefits.
Purpose: Retirement savings, pension protection and financial security for employees and their families.
3. Employees' State Insurance (ESI)
ESI provides medical and social security benefits to eligible employees.
Benefits include:
- Medical benefit.
- Sickness benefit.
- Maternity benefit.
- Disablement benefit.
- Dependants' benefit.
- Funeral expenses.
Exam point: The ESI framework is contributory and provides protection against specified employment-related and health contingencies.
4. Gratuity
Gratuity is a lump-sum payment made by an employer to an employee in recognition of service rendered.
Ordinarily, gratuity becomes payable after five years of continuous service.
Exceptions: The five-year requirement is not necessary in cases of death or disablement. Fixed-term employees are also governed by the special statutory provisions concerning gratuity.
5. Maternity Benefit
The Code protects women employees during pregnancy and childbirth.
Important features:
- 26 weeks of maternity benefit for eligible women with fewer than two surviving children.
- 12 weeks for women having two or more surviving children.
- 12 weeks for adopting mothers and commissioning mothers, subject to statutory requirements.
- Work-from-home arrangements may be permitted where the nature of work allows and the employer and employee mutually agree.
- Nursing breaks are available after returning to work.
- Crèche facilities are required in establishments employing 50 or more employees, subject to statutory conditions.
The Supreme Court extended maternity benefit protection to women employed on a casual or muster-roll basis, emphasising the dignity of motherhood and social justice.
6. Gig workers and platform workers
One of the most significant developments in the Social Security Code is the recognition of gig and platform workers.
Section 2: Contains definitions relating to gig workers, platform workers and aggregators.
Section 109: Provides for social security schemes for unorganised workers.
Section 114: Empowers the Central Government to frame schemes for gig workers and platform workers.
Examples:
- App-based delivery workers.
- Ride-hailing drivers.
- Online service providers.
- Workers engaged through digital platforms.
Important distinction:
- Gig worker: A person who performs work or participates in a work arrangement and earns outside the traditional employer-employee relationship.
- Platform worker: A person engaged in platform work through an online platform.
PART V - OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020
In force from 21 November 2025
The OSH Code, 2020 consolidates 13 Central labour laws, including the Factories Act, 1948, Contract Labour (Regulation and Abolition) Act, 1970, Mines Act, 1952 and Inter-State Migrant Workmen Act, 1979.
Its primary objective is to regulate occupational safety, health, welfare and working conditions.
1. Important provisions
| Section | Subject |
| Section 2 | Definitions |
| Section 3 | Registration of certain establishments |
| Section 4 |
Note: Always use the consolidated Code's section numbering rather than carrying forward the old Factories Act section numbers.
2. Duties of employers - Section 6
The employer must:
- Provide a workplace free from hazards.
- Comply with occupational safety standards.
- Provide necessary information, instruction and training.
- Maintain a safe working environment.
- Ensure safe handling and disposal of hazardous substances.
- Provide prescribed health examinations and medical facilities.
3. Working hours
Section 23
The Code provides for:
- Maximum eight hours of work per day, subject to prescribed rules.
- Regulation of daily and weekly working hours.
- Rest intervals.
- Weekly holidays.
- Overtime.
Section 25 - Overtime
Overtime wages must be paid at twice the normal rate of wages, subject to the statutory conditions.
4. Annual leave with wages
Section 32
An employee working for the prescribed number of days in a calendar year becomes eligible for annual leave with wages.
Generally:
- One day of leave for every 20 days of work for an adult.
- One day for every 15 days for an adolescent worker.
The Code also contains provisions concerning leave accumulation and encashment.
5. Employment of women
Section 67
Women are entitled to work in all establishments and for all types of work under the Code.
They may be employed before 6 AM and beyond 7 PM with their consent and subject to prescribed conditions relating to safety, holidays and working hours.
6. Contract Labour
The OSH Code regulates contract labour and the responsibilities of contractors and principal employers.
Important provisions include:
- Regulation and licensing of contractors.
- Responsibility for payment of wages.
- Welfare facilities.
- Restrictions relating to employment of contract labour in core activities, subject to statutory exceptions.
The general applicability threshold for the contract labour provisions is 50 contract labourers, subject to the Code.
7. Inter-State Migrant Workers
The OSH Code recognises inter-State migrant workers and provides for their welfare and protection.
Important aspects:
- Registration and identification.
- Portability of benefits.
- Journey allowance.
- Access to welfare schemes.
- Protection against exploitation.
The definition under the Code also recognises certain workers who migrate independently and are employed in another State, subject to the statutory wage ceiling and other conditions.
8. Factories: Important concepts for CLAT PG
Although the Factories Act, 1948 has been subsumed into the OSH Code, its historical provisions and related case law remain extremely important.
The following are particularly important:
| Earlier Factories Act provision | Subject |
| Section 2(m) | Definition of factory (Under the OSH Code, the definition of a "Factory" (replacing the old Section 2(m)) increased its thresholds to 20 workers (with power) and 40 workers (without power)) |
| Section 2(k) | Manufacturing process |
| Section 7A |
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Hanspal Bakul
Contributing author
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