Central government releases Draft Industrial Relations (Central) Rules, 2025

Taking a decisive step towards operationalising the Industrial Relations Code, 2020, the Central Government has notified the Draft Industrial Relations (Central) Rules, 2025 through notification no. G.S.R. 930(E) dated 30 December 2025, issued under Section 99 of the Code. Once finalised, these draft rules are intended to replace two legacy frameworks the Industrial Disputes (Central) Rules, 1957 and the Industrial Employment (Standing Orders) Central Rules, 1946 signalling a long-awaited transition to a consolidated and contemporary industrial relations regime. Stakeholders have been invited to submit their objections and suggestions within 30 days from the date of publication in the Official Gazette, highlighting the consultative approach adopted by the Government.

The draft rules lay down a detailed procedural architecture governing almost every major facet of industrial relations, including settlements, standing orders, works committees, grievance redressal mechanisms, trade unions, strikes and lock-outs, lay-offs, retrenchment, closure, and adjudication of industrial disputes. From an employer’s perspective, the rules are notable for shifting the emphasis from ad-hoc practices to standardised, rule-based processes, thereby reducing interpretational uncertainty that has historically fuelled disputes.

A central theme running through the draft rules is the institutionalisation of workplace dialogue and internal dispute resolution. Employers are required to constitute a Works Committee of not more than 20 members, with representation structured to promote harmonious relations and with worker representatives not being fewer than employer representatives. In addition, establishments are required to set up a Grievance Redressal Committee with equal representation of employers and workers, mandatory inclusion of women workers, and a defined tenure of three years. These provisions reinforce the Code’s intent to resolve issues at the establishment level before they escalate into formal disputes.

The draft rules also bring much-needed clarity to the settlement framework under industrial law. They prescribe uniform formats for settlements arrived at both during conciliation and otherwise, and clearly specify the authorized signatories on behalf of employers and workers. By codifying who can validly bind the parties, the rules aim to minimise future challenges to settlements on technical or representative grounds.

Another significant component of the draft rules is the recognition of negotiating unions or negotiating councils. The rules set out criteria for recognising a sole negotiating union, including procedures for verification of membership, which may include secret ballot mechanisms. They also outline the facilities to be extended by employers to recognised unions, along with a clear framework for situations where no single union meets the prescribed threshold and a negotiating council is required. These provisions seek to bring order and predictability to collective bargaining arrangements.

On the regulatory front, the draft rules formalise procedures relating to strikes and lock-outs, including prescribed notice formats, mandatory intimation to labour authorities, and requirements for public display within the establishment. Similarly, applications seeking prior permission for lay-offs, retrenchment and closure are required to follow a structured process, ensuring transparency and timely communication with workers and authorities alike.

The rules also operationalise the Worker Re-skilling Fund, requiring employers to deposit an amount equivalent to 15 days’ last drawn wages of a retrenched worker into a designated government account. The amount is ring-fenced for the purpose of re-skilling affected workers, reflecting a policy shift towards cushioning the impact of workforce rationalisation through employability support rather than only monetary compensation.

Additional provisions address protected workers, prescribe annual compliance and communication obligations for trade unions, and introduce a structured mechanism for compounding of offences through a notified Gazette Officer using the Ministry’s digital portal further reinforcing the move towards digitised and time-bound compliance.

Overall, the Draft Industrial Relations (Central) Rules, 2025 represent a critical bridge between legislative intent and on-ground implementation of the Industrial Relations Code. For employers, the draft offers greater procedural certainty and uniformity across establishments, while for workers, it embeds safeguards through representation, transparency and structured dispute resolution. As these rules will ultimately shape day-to-day industrial relations governance, stakeholders would be well advised to review them closely and participate actively in the consultation process.