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Section 96: Limitation of prosecutions

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

Statutory Mandate
Chapter XIII: Offences and Penalties
Competent Labour Forum
Act No. 35 of 2020
Section 95 All 104 Sections of Industrial Relations Code, 2020 Section 97

Legal Commentary & Landmark Judgments: Section 96

Section 96 of the Industrial Relations Code, 2020 empowers the appropriate Government to exempt any industrial establishment or class of establishments or undertakings from all or any provisions of the Code, conditionally or unconditionally, in the public interest or under emergent economic circumstances, balancing industrial growth with basic labour standards.

  • Sovereign Power of Exemption: The appropriate Government may, by notification in the Official Gazette, exempt any industrial establishment or class of establishments or undertakings from all or any of the provisions of this Code or any rule made thereunder, conditionally or unconditionally, for such period as may be specified.
  • Public Interest and Emergent Economic Preconditions: The power of exemption must be guided by public interest, emergency conditions, economic necessity, or promotion of industrial and economic development, subject to such conditions, safeguards, and restrictions as the Government may specify in the notification.
  • Constitutional Boundaries & Judicial Review: The exemption power is administrative and cannot be exercised arbitrarily, selectively, or to extinguish fundamental constitutional rights of labor under Articles 14, 19, and 21; exemption notifications remain subject to judicial review under Article 226.
Key Landmark Precedents:
  • Consumer Education & Research Centre v. Union of India (1995) 3 SCC 42: The Supreme Court held that statutory exemption powers in labor legislation must be exercised sparingly and cannot be deployed to nullify core constitutional rights to health, safety, and basic livelihood of workers.
  • Bikash Bhushan Ghosh v. Novartis India Ltd. (2007) 5 SCC 257: Affirmed that an exemption granted under labor statutes must satisfy the test of reasonable classification under Article 14 and possess a rational nexus to the statutory objective.
  • State of Gujarat v. Shri Ambica Mills Ltd. (1974) 4 SCC 656: Emphasized that legislative and administrative exemptions in industrial laws designed to foster economic viability in specific emerging sectors or disaster zones are constitutionally permissible if founded on intelligible differentia.
Courtroom Practice & Strategic Litigation Guidance:

Enterprises in emerging sectors (such as renewable energy, tech startups, or Special Economic Zones) seeking exemption under Section 96 must prepare a formal petition demonstrating public economic interest, alternative internal dispute redressal mechanisms, and comprehensive employee welfare guarantees. If an exemption notification is challenged by a union, defend the notification by demonstrating intelligible differentia and absence of bad faith.

Section 95 All 104 Sections of Industrial Relations Code, 2020 Section 97