Penalties under the Industrial Relations Code, 2020 — What Employers Should Know
Code in force from 21 November 2025 · Industrial Relations (Central) Rules, 2026 notified 8 May 2026 · Subsumes the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946
1. Employer penalties — lay-off, retrenchment and closure
| If you do this | Section | Punishment |
|---|---|---|
| Lay off, retrench or close down without the prior permission of the appropriate Government Applies to non-seasonal industrial establishments with 300 or more workers | 86(1) r/w 78, 79, 80 | ₹1,00,000 to ₹10,00,000 |
| Repeat of the above after conviction | 86(2) | ₹5,00,000 to ₹20,00,000, or jail up to 6 months, or both |
| Fail to pay lay-off compensation; retrench without the required notice and compensation; fail to pay compensation on transfer of the establishment or on closure | 86(3) r/w 67, 70, 73, 75 | ₹50,000 to ₹2,00,000 |
| Repeat of the above after conviction | 86(4) | ₹1,00,000 to ₹5,00,000, or jail up to 6 months, or both |
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8 more sections in Professional & Enterprise
You are reading the free preview. The rest of this sheet is part of the Professional (Rs 360/month) and Enterprise (Rs 1,360/month) plans.
- 2. Standing orders
- 3. Unfair labour practices, settlements and awards
- 4. Strikes and lock-outs
- 5. Trade union office-bearers
- 6. Common mistakes that lead to penalty
- 7. How proceedings start, and how they can be settled
- 8. Who may be prosecuted — Section 88
- 9. Six actions that prevent most of this