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Section 86: Prohibition of unfair labour practices

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

Statutory Mandate
Chapter XII: Unfair Labour Practices
Competent Labour Forum
Act No. 35 of 2020
Section 85 All 104 Sections of Industrial Relations Code, 2020 Section 87

Legal Commentary & Landmark Judgments: Section 86

Section 86 of the Industrial Relations Code, 2020 prescribes a comprehensive, graduated penal schedule of monetary fines and imprisonment for distinct contraventions under the Code, establishing severe deterrent sanctions for illegal strikes, illegal lock-outs, unpermitted lay-off/retrenchment/closure under Chapter X, and commission of unfair labour practices.

  • Penalties for Illegal Strikes and Lock-Outs: Any worker who commences, continues, or acts in furtherance of an illegal strike is punishable with fine between Rs. 1,000 and Rs. 10,000, or imprisonment up to one month, or both. Any employer commencing or continuing an illegal lock-out is punishable with fine between Rs. 50,000 and Rs. 1,00,000, or imprisonment up to one month, or both.
  • Penalties for Chapter X Violations (Lay-Off, Retrenchment, Closure): Lay-off or retrenchment without government permission under Chapter X attracts fine from Rs. 50,000 up to Rs. 2,00,000. Closing down an industrial establishment without prior permission under Section 80 is punishable with fine from Rs. 1,00,000 up to Rs. 10,00,000, or imprisonment up to six months, or both.
  • Penalties for Unfair Labour Practices and Residual Contraventions: Committing any unfair labour practice under Section 84 attracts fine between Rs. 10,000 and Rs. 2,00,000. General residual contraventions of any provision or rule where no specific penalty is provided attract fine up to Rs. 1,00,000. Subsequent convictions for identical offences attract enhanced fines or imprisonment.
Key Landmark Precedents:
  • Syndicate Bank v. K. Umesh Nayak (1994) 5 SCC 572: The Constitution Bench held that a strike or lockout in contravention of statutory conditions is illegal per se, exposing the offending parties to statutory penal consequences regardless of whether the underlying industrial grievances are legitimate.
  • Hindustan Steel Ltd. v. State of Orissa (1969) 2 SCC 627: The Supreme Court held that statutory penalties should not be imposed mechanically merely because an infraction is established; where the contravention is technical or venial resulting from a bonafide belief, authorities must exercise judicial discretion.
  • State of Uttar Pradesh v. Modi Chemists (2000) 4 SCC 680: Affirmed that penal provisions in labor statutes must be strictly construed; proof of each specific ingredient of the statutory offence is required before sentencing or imposing criminal liability.
Courtroom Practice & Strategic Litigation Guidance:

In industrial conflict scenarios, advise management and unions of their immediate exposure under Section 86. For employers planning restructuring, never proceed with closure or retrenchment without obtaining prior government permission or waiting out the 60-day deemed period, as Section 86(3) exposes managing directors and occupiers to personal criminal prosecution, substantial monetary fines, and imprisonment.

Section 85 All 104 Sections of Industrial Relations Code, 2020 Section 87