The Industrial Disputes Act, 1947

What it does

The Act was the main statute on industrial relations in India for decades. It provided machinery for the investigation and settlement of industrial disputes through conciliation, Labour Courts and Industrial Tribunals, and it set conditions on the employer's power to end employment by retrenchment, lay-off and closure. It is now a repealed Act and is described here for the disputes it still governs.

Its central concepts were industry, workman and industrial dispute. The Supreme Court read the meaning of industry widely in Bangalore Water Supply and Sewerage Board v A Rajappa (1978), though the correctness of that reading has been referred to a larger bench. Section 25F made retrenchment conditional on notice or pay in lieu, on compensation of fifteen days' average pay for each completed year of service, and on notice to the appropriate Government. Non-compliance made the retrenchment bad in law.

Who it binds

Workmen in an industry and their employers. A person employed mainly in a managerial or administrative capacity was not a workman. The Act applied through the appropriate Government, which was the Central Government for specified establishments and the State Government for the rest, and each could refer a dispute for adjudication.

What moved out of it

The Industrial Relations Code, 2020 absorbed the Act with two other statutes, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946. The Code came into force on 21 November 2025, under notification S.O. 5320(E), and the three Acts were repealed. The Central Government then made the Industrial Relations (Central) Rules, 2026 by notification G.S.R. 342(E) of 8 May 2026, which supersede the Industrial Disputes (Central) Rules, 1957 as to Part II and Parts V to VIII. The 1957 Rules are listed on the site as a related instrument.

The Industrial Relations Code (Amendment) Act, 2026 (Act 1 of 2026), deemed in force from 21 November 2025, changed section 104 of the Code only. The Tribunals and statutory authorities under the three repealed Acts keep functioning until their counterparts under the Code become functional, so the machinery of the old Act does not disappear on the day of repeal.

What has changed, and when

Before its repeal the Act had been amended repeatedly. Among its provisions, Chapter VB imposed a requirement of prior permission from the Government for lay-off, retrenchment and closure in larger establishments, at a threshold of one hundred workers. The Code recast that regime. As the site's note on retrenchment records, the permission requirement now applies to a factory, a mine or a plantation that averaged 300 or more workers a day in the preceding twelve months, with a higher number if the appropriate Government notifies one.

What turns on it in practice

For the employment practice, the Act matters in three ways. A termination before 21 November 2025 is judged under the Act, including section 25F, and the case law on that section applies to it. A reference already made to a Labour Court or Tribunal continues, and the Tribunal's continued existence under the Code's transitional provision keeps the forum open. And where a claim is based on a standing order or a settlement from the earlier period, the older text still supplies the rights.

The first step in a dispute is to date the event. A retrenchment before the date is tested against the Act, and one after it against Chapters X and XI of the Code, which carry a different set of conditions, including the payment into the worker re-skilling fund within ten days. The note on the 300-worker line sets out how those conditions differ with the size of the establishment.