The Industrial Disputes Act 1947 has been replaced: what that means if you are fired
The Industrial Disputes Act 1947 was repealed on 21 November 2025. It has been replaced by the Industrial Relations Code, 2020, which now covers dismissal, retrenchment, lay-off, closure, conciliation and Industrial Tribunals. If you were fired, your rights and deadlines come from the Code.
Section 104 of the Code repealed three older laws: the Industrial Disputes Act 1947, the Trade Unions Act 1926 and the Industrial Employment (Standing Orders) Act 1946. Many guides, notices and employment letters still quote the old Act's sections, such as section 25F for retrenchment or section 2A for individual disputes. Those numbers are out of date. The table below maps the main ones to the new law.
| Topic | Old Industrial Disputes Act (repealed) | Industrial Relations Code, 2020 |
|---|---|---|
| Who is protected | "Workman", section 2(s); supervisors covered up to ₹10,000 a month | "Worker", section 2(zr); supervisors covered up to ₹18,000 a month |
| Individual termination disputes | Section 2A; 3 years to apply | Section 4(9) to 4(11); conciliation officer first, Industrial Tribunal after 45 days; 2 years to apply |
| Where the case is heard | Labour Court | Conciliation officer (section 43), then Industrial Tribunal (section 44) |
| Retrenchment conditions | Section 25F | Section 70, plus a Worker Re-skilling Fund payment (section 83) |
| Last come, first go | Section 25G | Section 71 |
| Preference in re-employment | Section 25H | Section 72 |
| Closure compensation | Section 25FFF | Section 75 |
| Government permission for lay-off, retrenchment and closure | Chapter VB, 100 or more workers; section 25N for retrenchment | Chapter X, 300 or more workers; sections 78, 79 and 80 |
| Wages while the employer appeals | Section 17B | Section 56 |
| Unfair labour practices | Section 25T | Section 84, with the Second Schedule |
The Sexual Harassment of Women at Workplace Act 2013 (the POSH Act) is not affected by the Code.
Who counts as a worker under the Industrial Relations Code?
The Code's protections on dismissal and retrenchment apply to a "worker", defined in section 2(zr). This replaces the old term "workman". The first question in any termination case is still whether you fall within this definition.
Two points matter most:
- Supervisors earning up to ₹18,000 a month are covered. The old Act's limit was ₹10,000, so many supervisors who were outside the old definition are now inside it.
- People employed mainly in a managerial or administrative role are generally not workers.
What you actually do usually matters more than what you are called. Someone titled "manager" who mostly does clerical or technical work may still be a worker. Someone titled "executive" who mainly manages others may not be. If you are unsure, get advice before assuming you are excluded.
What is the difference between retrenchment, lay-off and closure?
Retrenchment is the employer ending your service for a reason other than disciplinary action. A lay-off is a temporary inability to give you work while your employment continues. Closure is the permanent shutting of the place of employment. Each carries different rights under the Industrial Relations Code, 2020.
The Code treats these three situations differently:
| Situation | What it means | Key right |
|---|---|---|
| Retrenchment | The employer ends your service for a reason other than disciplinary action | One month's notice with reasons and 15 days' average pay per completed year (section 70), plus 15 days' last-drawn wages into the Worker Re-skilling Fund (section 83) |
| Lay-off | A temporary inability to give you work; your employment continues | Lay-off compensation of 50% of basic wages plus dearness allowance (section 67) |
| Closure | The permanent shutting of the place of employment or part of it | 60 days' notice of closure (section 74) and closure compensation (section 75) |
Not sure how this applies to your situation?
Ask Legal Setu — free, no account needed.What must an employer do before retrenching a worker?
Section 70 of the Industrial Relations Code, 2020 replaces the old section 25F. Before retrenching a worker, the employer must do three things:
- One month's written notice: The notice must state the reasons for retrenchment. Instead of notice, the employer can pay you wages for the notice period.
- Retrenchment compensation: 15 days' average pay for every completed year of continuous service, or any part of a year over 6 months. This is the legal minimum; your contract may give you more.
- Notice to the appropriate government: The employer must also notify the government of the retrenchment.
If any of these steps is missing, you can challenge the retrenchment through the conciliation officer and, if needed, the Industrial Tribunal.
The Worker Re-skilling Fund: an extra payment
The Code adds a payment the old Act did not have. Under section 83, when a worker is retrenched, the employer must also pay 15 days' last-drawn wages into the Worker Re-skilling Fund. That amount is credited to the worker within 45 days. Note the difference: retrenchment compensation under section 70 uses average pay, while the fund payment uses last-drawn wages.
Who goes first, and your right to be rehired
Section 71 keeps the "last come, first go" rule: within a category of workers, the most recently hired worker is normally the first to be retrenched. Section 72 gives retrenched workers a preference if the employer later hires again. If you were retrenched ahead of more junior colleagues, or the employer took on new people after letting you go, tell your lawyer.
Chapter X of the Code (from section 77) has special provisions for establishments with 300 or more workers. Lay-off (section 78), retrenchment (section 79) and closure (section 80) need prior government permission. For retrenchment, section 79 also requires three months' notice. Under the old Act, this stricter regime started at 100 workers.
How is continuous service counted?
Retrenchment compensation depends on your completed years of continuous service. Continuous service is not always the same as the time between your joining date and your exit date, and some breaks may not count against you. Keep attendance and PF records that show how long you actually worked, and ask a lawyer how your service is counted if there were gaps.
How do I challenge a wrongful termination in India?
Apply to the conciliation officer first. If the dispute is not settled within 45 days, you can apply directly to the Industrial Tribunal under section 4(10) of the Industrial Relations Code, 2020. You must apply within 2 years of the termination.
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- Termination letter or order: If one was issued. If you were given no written notice, note that too, because section 70 requires written notice with reasons or wages in lieu of notice.
- Appointment letter and employment contract: These show your designation, duties and salary, which are all relevant to whether you are a worker.
- Salary slips for the last 12 months: Used to work out average pay for retrenchment compensation, last-drawn wages for the Re-skilling Fund payment, and any wages you are owed.
- Attendance records or muster roll entries: These help prove your continuous service, which decides how much retrenchment compensation you get.
- PF (EPFO) records: Your UAN passbook showing the employer's PF contributions is strong proof of your employment period and salary.
- Any communication about the termination: Emails, WhatsApp messages and letters, especially anything showing the reason given, or that no reason was given.
- Proof that no notice or compensation was given: Bank statements showing no payment matching retrenchment compensation, and the absence of any written notice.
If you were told to leave in a meeting with nothing in writing, note the date, who told you and any witnesses. Section 70 requires written notice with reasons, or wages in lieu of notice, before retrenchment. A termination without either can be raised with the conciliation officer.
Common wrongful termination situations in India, and how the law handles each
What if I was fired without any reason or notice in India?
If you are a worker and you were retrenched without written notice with reasons, without notice pay and without retrenchment compensation, the employer has not followed section 70 of the Industrial Relations Code, 2020. You can raise this with the conciliation officer and, if it is not settled, the Industrial Tribunal, which can order reinstatement or other relief depending on the facts.
Do not sign a "full and final settlement" or accept a payment without understanding what you are giving up. A signed settlement can make a later claim much harder, so get advice first.
If the employer also owes you unpaid salary, that is a separate claim. You can claim unpaid wages under section 45 of the Code on Wages, 2019 within 3 years; see our guide to recovering unpaid wages. You can also send a formal demand notice for your dues.
What if I was fired during my probation period in India?
Whether the retrenchment rules in section 70 protect you depends on your length of continuous service, so the answer varies from case to case. Being labelled a probationer does not by itself settle the question. A termination can also be challenged if it involves an unfair labour practice: section 84 of the Code prohibits unfair labour practices, which are listed in the Second Schedule.
What if the employer calls it a "resignation" but it was forced in India?
Sometimes an employer pushes an employee to resign instead of terminating them, through pressure, pay cuts or hostile transfers. A resignation you did not give freely may be challenged, but the outcome depends heavily on the evidence.
Keep a written record of every instance of pressure, save emails and messages, and note any witnesses. Do not delay: an application about a termination must be made within 2 years.
Does the Industrial Relations Code apply to IT companies and private sector employees?
It can. What matters is whether you are a worker under section 2(zr) of the Code, not whether you work in a factory or a software company. People employed mainly in managerial or administrative roles are generally not covered.
A common belief is that office staff in tech or finance have no protection. What matters is the nature of your role and whether you fit the definition of worker, not the sector you work in. If your work is mainly technical, clerical or operational, you may qualify. If you supervise others, check your pay: supervisors earning up to ₹18,000 a month are covered.
Other changes in the Code that employees should know
- Grievance Redressal Committee (section 4): Establishments with 20 or more workers must have one, and a worker can raise a grievance with it within 1 year.
- Standing orders (section 28): These now apply to establishments with 300 or more workers. The old threshold was 100.
- Change in service conditions (section 40): The employer must give 21 days' notice.
- Strikes (section 62): Notice is required in all establishments. A strike can happen only within 60 days after notice, not within 14 days of giving notice, and not while Tribunal proceedings are pending or within 60 days after they end.
Wrongful termination India: questions people actually ask
Official sources
Terminated with dues still unpaid?
Demand your outstanding salary and settlement in writing before you go to the conciliation officer — it strengthens the claim either way.