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Section 76: Effect of laws inconsistent with this Chapter

The Industrial Relations Code, 2020 (Act No. 35 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IX: Lay-off, Retrenchment and Closure
Competent Labour Forum
Act No. 35 of 2020
Section 75 All 104 Sections of Industrial Relations Code, 2020 Section 77

Legal Commentary & Landmark Judgments: Section 76

Section 76 of the Industrial Relations Code, 2020 establishes the non-obstante supremacy of Chapter IX provisions over inconsistent state legislation, certified standing orders, and general contracts, while explicitly saving and preserving more favourable benefits conferred upon workers under awards, collective agreements, or established service conditions.

  • Overriding Effect (Non-Obstante Clause): The provisions of Chapter IX take effect notwithstanding anything inconsistent contained in any other law (including state labor enactments) or in the certified standing orders of the industrial establishment under Chapter IV, ensuring uniform national baseline protections for lay-off, retrenchment, and closure.
  • Preservation of More Favourable Worker Benefits: Expressly saves any right or privilege to which a worker is entitled under any other law, award, agreement, contract of service, or standing orders that provides benefits more favourable to the worker than those conferred by Chapter IX (e.g., higher retrenchment compensation or longer notice periods).
  • State Industrial Disputes Law Harmonization: Clarifies that nothing in Chapter IX shall affect the provisions of any state law relating to the investigation, settlement, or adjudication of industrial disputes, except that rights and liabilities regarding lay-off and retrenchment are governed exclusively by this Chapter.
Key Landmark Precedents:
  • Rohtak & Hissar District Electric Supply Co. Ltd. v. State of Uttar Pradesh AIR 1966 SC 1471: The Supreme Court held that Section 25J of the IDA (now Section 76) overrides certified standing orders to the extent of inconsistency; however, if standing orders or collective agreements grant higher retrenchment compensation, the workmen are legally entitled to the higher contractual amount.
  • Punjab Land Development & Reclamation Corp. Ltd. v. Presiding Officer (1990) 3 SCC 682: The 5-Judge Constitution Bench held that Section 25J reinforces the uniform statutory protection of workers across all industrial sectors against unlawful retrenchment, precluding employers from relying on contradictory contractual terms.
  • Workmen of Subbalakshmi Mills Ltd. v. Subbalakshmi Mills Ltd. (1997) 1 LLJ 1121 (Mad): Affirmed that management cannot invoke certified standing orders or state shop enactments to dilute or circumvent the mandatory retrenchment compensation prescribed by Central labor legislation.
Courtroom Practice & Strategic Litigation Guidance:

During HR audits and collective bargaining, benchmark certified standing orders and employment contracts against Chapter IX. If a collective bargaining agreement (CBA) or settlement under Section 42 provides for 30 days' wages per year of service upon retrenchment, the employer is legally bound under Section 76 to disburse the higher 30-day compensation. Conversely, any contract clause providing less than 15 days' compensation is void ab initio under the non-obstante clause.

Section 75 All 104 Sections of Industrial Relations Code, 2020 Section 77