Retrenchment Under the Industrial Relations Code, 2020: Reinterpreting Its Definition, Conditions and Scope in Light of Legislative Changes and Judicial Precedents

The paper traces the concept of retrenchment in Indian labour law, tracking its evolution from the Industrial Disputes Act, 1947 through the amendments of 1953, 1976, and 1984, up to its consolidation under the Industrial Relations Code, 2020. It examines how the definition, preconditions, and scope of retrenchment have been shaped both by successive legislative interventions and by judicial pronouncements, moving from an initially narrow and technical reading of the term toward its recognition as a broader constitutional principle rooted in the right to livelihood and dignity under Article 21. The study also situates the framework within the Directive Principles of State Policy, showing how constitutional values have informed statutory interpretation over time. While acknowledging the IRC's modernising features, the paper highlights significant regressions, including a raised threshold for mandatory government permission before large-scale layoffs and the removal of contractual safeguards around superannuation. Most critically, it identifies the Code's silence on gig and platform workers as a serious constitutional gap, arguing that the exclusion of an increasingly large segment of the workforce from retrenchment protections raises concerns of unequal treatment under Article 14 and infringement of the right to livelihood under Article 21. The paper concludes that despite decades of progressive legal development, the retrenchment framework under the IRC remains incomplete and ill-suited to contemporary labour realities, and calls for its extension to cover all categories of working individuals, not merely those in traditional employment.