Abolition of Labour Courts under the Industrial Relations Code: Question of Workers’ Access to Justice
The elimination of Labour Courts under the Industrial Relations Code not only fails to address the pathologies surrounding access to justice for workers, it may end up clogging the adjudication system with both individual and collective disputes ending up in one single forum.
Sophy K.J
Published on: 2 May 2026, 05:18 am
THE ENACTMENT of the Industrial Relations Code, 2020 (‘IR Code’) on November 21, 2025, brought about a significant change in the labour adjudication mechanism. The IR Code effectively abolished Labour Courts leaving behind a one-window adjudication forum at the Industrial Tribunal level. By its legislative scheme for adjudication, all industrial disputes, both the collective and individual disputes, would be decided by the reconstituted Industrial Tribunals. A notification released on December 8 by the Ministry of Labour and Employment, called the Industrial Relations (Removal of Difficulties) Order, 2025, recognised the institutional void that this transition creates and permitted existing Labour Courts to continue until the new Tribunals are constituted and operational. But this is a deferral, not a reprieve. Essentially the statute abolishes the Labour Courts.
The objective of the labour law reform is simplification and increasing accessibility to labour rights. The argument is that Labour Courts are slow, overburdened, and redundant. A single unified forum which would be more efficient. But efficiency is an implementation question – it is not necessarily linked directly to the failure of the institution itself. And the particular inefficiencies of Labour Courts such as delay, formalism, and backlog have been studied, diagnosed, and prescribed for by Indian and comparative scholars over more than five decades. Not one credible prescription in that body of scholarship recommends abolition of Labour Courts. What has been consistently recommended is structural reform of the adjudication model.
Labour Courts Under the IDA: Legislative Design
The Industrial Disputes Act, 1947 (‘IDA’) drew a careful and consequential distinction between two types of adjudicatory forums.
Labour Courts, constituted under Section 7, were assigned jurisdiction over what scholars call ‘rights disputes’ such as wrongful dismissal, discharge, interpretation of standing orders, withdrawal of customary benefits, and the legality of strikes and lockouts. These matters are listed in the Second Schedule of the IDA. They are individual disputes about existing terms of an employment relationship, disputes where a worker asks whether what was done to them was lawful.
Industrial Tribunals, constituted under Section 7-A, were given broader jurisdiction over collective questions about wages, fringe benefits, bonus, rationalisation, and working conditions listed in the Third Schedule. The IDA treated these conceptually different disputes under two different forums.
The presiding officers of Labour Courts under the IDA are district judges, additional district judges, persons who had held judicial office for not less than seven years, or judges of a High Court. An amendment to the IDA in 2010 added Deputy Labour Commissioner or Joint Commissioner of the State Labour Department with Law Degree and a total of seven years’ experience inclusive of three years as conciliation officer. The requirement of knowledge in law and legal practice was inserted keeping in mind that an individual worker’s claim of wrongful dismissal, misapplication of standing reinstatement disputes etc. required knowledge in law and fair process to understand justiciability/justifiability, evidence standards, and natural justice. Beyond this, Labour Courts held the powers of a First Class Magistrate for prosecuting offences under the IDA, and those of a civil court for other proceedings. Their quasi-judicial character was not merely nominal. In function and in authority, they operated as genuine courts.
Then in 1976, Section 2-A was introduced into the IDA which allowed individual workers to bring their own termination disputes directly before Labour Courts without requiring espousal of the union. For workers in small establishments or poorly organised sectors, where functioning unions were either absent or ineffective, this came as a substantive protection. The numbers show that roughly ninety per cent of government conciliation efforts and adjudication references concerned discharge, dismissal, retrenchment, or termination. Individual rights disputes, in other words, formed the overwhelming bulk of Labour Court business.
