In short: Since 21 November 2025, wrongful termination India labour codes questions are answered by four new Codes — especially the Industrial Relations Code, 2020 — which replaced 29 older laws, raised the threshold for government permission, and added a brand-new re-skilling fund on top of existing retrenchment pay.
Key points
- All four Labour Codes came into force simultaneously on 21 November 2025, repealing 29 central labour laws including the Industrial Disputes Act, 1947.
- The Industrial Relations Code, 2020 (IR Code) is now the primary law governing retrenchment, dismissal, and termination disputes across India.
- Any individual worker whose services are terminated can now independently raise an industrial dispute — you no longer need collective union backing to access a tribunal.
- The threshold for requiring prior government permission before retrenchment, lay-off, or closure has been raised from 100 to 300 workers under the IR Code.
- Retrenched workers who complete one year of continuous service are entitled to fifteen days’ average pay for every completed year of service, plus one month’s notice or pay in lieu.
- A new Worker Re-skilling Fund requires employers to deposit fifteen days’ last-drawn wages per retrenched worker within ten days of retrenchment — an entirely new benefit with no equivalent under the old law.
What changed on 21 November 2025?
India had accumulated 29 central labour laws over decades, each with its own definitions, authorities, and dispute-resolution paths. The Government notified all four Labour Codes on 21 November 2025, bringing them into force at the same time.
A corrigendum issued on 19 December 2025 confirmed that the Codes came into force in their entirety and that the 29 laws subsumed by the Codes stand fully repealed. If you were hired or let go after that date, the new framework applies to you.
The four Codes are: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020. For termination disputes, the IR Code is the one that matters most.
Which old laws does the IR Code replace?
The IR Code amalgamates and subsumes three earlier central acts: the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; and the Industrial Disputes Act, 1947. The IDA, which governed virtually every retrenchment dispute for over seventy years, is gone. The IR Code is the governing statute from 21 November 2025 onwards.
Your core rights after wrongful termination under the IR Code
Any individual worker can now raise a dispute
Under the old Industrial Disputes Act, a lone worker often struggled to get a dispute admitted without union support. The IR Code changes this directly.
Where an employer discharges, dismisses, retrenches, or otherwise terminates an individual worker’s services, any dispute connected with that termination is deemed an industrial dispute — even if no other worker or union is involved. You can approach the appropriate labour authority on your own.
Retrenchment compensation: what you are owed
If you have completed one year of continuous service and your post is cut, the IR Code entitles you to fifteen days’ average pay for every completed year of service. You are also entitled to one month’s written notice — or pay in lieu of notice — and the employer must notify the Government as well.
The new Worker Re-skilling Fund
This is an entirely new benefit introduced by the IR Code, with no equivalent under the 1947 Act. Over and above your retrenchment compensation, your employer must contribute an amount equal to fifteen days of your last-drawn wages to a Worker Re-skilling Fund.
Under the notified Central Rules, the employer must transfer this amount to a designated account maintained by the Labour Commissioner within ten days of your retrenchment, along with your bank account details. The amount is then electronically transferred to your bank account within forty-five days to support re-skilling and transition.
The three-tier permission framework: does your employer need government approval?
The IR Code creates a graduated system based on the number of workers in the establishment. The table below summarises your rights depending on employer size.
| Establishment size | Prior government permission required? | Notice or pay in lieu? | Retrenchment compensation? |
|---|---|---|---|
| Fewer than 50 workers | No | No statutory obligation under this threshold | Yes |
| 50 to 299 workers | No | Yes — one month’s notice or pay in lieu | Yes |
| 300 or more workers | Yes — from the appropriate Government | Yes — one month’s notice or pay in lieu | Yes |
The old Industrial Disputes Act set the prior-permission threshold at 100 workers. The IR Code raises it to 300. This is significant: employers with between 100 and 299 workers can now retrench without prior approval, though compensation and notice obligations still apply.
When should you consider legal action?
You should consider taking action if your employer retrenched you without paying the compensation you are owed, failed to give notice or pay in lieu, did not deposit the Worker Re-skilling Fund contribution within ten days, or — if the establishment has 300 or more workers — proceeded without obtaining prior government permission.
Because the IR Code deems your individual termination an industrial dispute, you do not need a union to back your claim. The appropriate authority to approach will depend on your state and the nature of the dispute; a qualified advocate can guide you on jurisdiction and time limits.
For plain-language guides on related employment law topics — including standing orders, wages, and social security — visit our Law for You hub, where we break down complex Indian labour law for everyday readers.
Old law vs new law: a quick comparison
| Issue | Industrial Disputes Act, 1947 (repealed) | Industrial Relations Code, 2020 (in force) |
|---|---|---|
| Governing statute since | 1947 | 21 November 2025 |
| Prior permission threshold | 100 workers | 300 workers |
| Individual worker dispute | Difficult without union support | Explicitly deemed an industrial dispute |
| Re-skilling fund | No equivalent | 15 days’ last-drawn wages, paid within 45 days |
| Retrenchment compensation rate | 15 days’ average pay per completed year | 15 days’ average pay per completed year |
Frequently asked questions
Does the Industrial Relations Code apply to my termination if it happened before 21 November 2025?
No. The IR Code came into force on 21 November 2025. Terminations that occurred before that date would have been governed by the Industrial Disputes Act, 1947 and the other laws that were then in force. If you are unsure which law applies to your situation, consult a qualified advocate who can assess the timeline of your case.
Do I need a trade union to challenge my wrongful termination under the new Labour Codes?
No. The IR Code explicitly provides that where an employer terminates an individual worker’s services, the resulting dispute is deemed an industrial dispute even without union involvement. You can raise the dispute as an individual. However, having legal representation significantly improves your chances of navigating the process correctly.
What is the Worker Re-skilling Fund and how do I receive it?
The Worker Re-skilling Fund is a new benefit under the IR Code. Your employer must deposit an amount equal to fifteen days of your last-drawn wages with the Labour Commissioner within ten days of your retrenchment. That amount is then transferred electronically to your bank account within forty-five days. This is separate from, and in addition to, your standard retrenchment compensation.
Primary sources
- India Code — bare text of the Industrial Relations Code, 2020 and all four Labour Codes
- Supreme Court of India — judgments on labour and termination disputes
- Ministry of Labour and Employment — official notifications, rules, and circulars
- Press Information Bureau — government press releases on the Labour Codes
Written by Editorial Team, The Courtroom · Last verified 2026-07-09
This article is for general information only and is not legal advice. Laws change; verify against the primary sources cited and consult a qualified advocate for your situation.
