Kerala HC Upholds Validity Of Industrial Relations Code Amendment Allowing Existing Labour Forums To Continue Till New Tribunals Are Set Up

The Kerala High Court has recently upheld the constitutional validity of Section 104(1A) of the Industrial Relations Code (Amendment) Act, 2026, and held that the provision enabling existing labour adjudicatory forums to continue functioning until new tribunals are constituted is a lawful transitional mechanism and not “manifestly arbitrary.”A Division Bench comprising Justice Devan Ramachandran and Justice Basant Balaji dismissed a writ appeal challenging the judgment of a Single Judge which had earlier upheld the amendment to the Industrial Code. The Section 104(1) of the Code repealed statutes including, the Trade Unions Act, 1926, Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947. But, the 2026 amendment, which incorporated Section 104(1A) in the Code stated that the functioning of the Tribunals and statutory authorities functioning under the repealed Acts must continue adjudicating disputes until the other statutory authorities become functional under the Code. The appellants had earlier approached the Court challenging a Central Government notification that permits Labour Courts and Industrial Tribunals constituted under the repealed Industrial Disputes Act, 1947 to continue adjudicating cases even after the Industrial Relations Code, 2020 came into force.This was dismissed by the Court. An appeal against the judgment is pending before a Division Bench of the Court. The appellants argued that the insertion of Section 104(1A) was unconstitutional because it allowed authorities created under repealed statutes to continue exercising jurisdiction. They contended that this defeated Sections 44(7) and 51(1) of the Code, which mandate transfer of pending cases to newly constituted multi-member tribunals.The Division Bench noted the Single Judge's reliance on the Supreme Court's decision in Shayara Bano v. Union of India [(2017) 9 SCC 1], reiterated that legislation can be invalidated on grounds of arbitrariness only when it is “manifestly” or “shockingly” arbitrary.The Court thus held that Section 104(1A) merely created a temporary arrangement to avoid disruption in adjudication during the transition from the old statutory regime to the tribunal structure contemplated under the Industrial Relations Code.The Court accepted the Union government's submission that striking down the provision would create a legal vacuum, resulting in a complete cessation of adjudicatory functions. The court observed that such an outcome would prejudice litigants and undermine access to justice.“As per the impugned sub-section, it merely enables the existing Tribunals and statutory Authorities to continue. Far from being arbitrary and shocking, this creates a transitory mechanism, for the period until new Tribunals and statutory Authorities are brought into existence; thus removing any event to cause prejudice to litigants and claimants.” the Court said. The court characterised Section 104(1A) as a “non-obstante” and “transitory” provision intended to operate only until the new tribunals become functional. It noted that the process of constituting tribunals under the Code was underway and issues concerning their establishment were already pending before the Supreme Court.The Court rejected the contention that the amendment conflicted with Sections 44(7) and 51(1), and held that those provisions concerning transfer of cases and tribunal constitution would become fully operative once the new tribunals are established.The Court noted that Section 104(1A) bridges the interim period and therefore complements, rather than contradicts, the statutory framework.The court also emphasised that the petitioners had not challenged Parliament's legislative competence to enact the amendment. In the absence of such a challenge, the Court held that the provision could not be struck down.“On the argument of Sri.A.Abdul Nabeel, that the transitory provision is in conflict with Sections 44(7) and 51(1) of the 'Code', we think otherwise, for the singular reason that these provide for mandatory transfer of cases and for constitution of the Tribunals. It is precisely during the time it takes for the Tribunals to be so constituted, that the transitory provision applies. We cannot bring ourselves to find anything wrong in this, particularly when there is no case for the appellants that the legislature did not have the competence to legislate in the manner it has done.” Court held. The Court thus upheld the findings of the SIngle Judge and dismissed the appeal. Case Title: M K Suresh Kumar and Anr. v The Union of IndiaCase No: WA 1051/ 2026Citation: 2026 LiveLaw (Ker) 293Counsel for Appellant: A. Abdul NabeelCounsel for Respondents: P. Sreekumar (ASGI), Amal Parthasarathy Click Here To Read/ Download Judgment

Kerala HC Upholds Validity Of Industrial Relations Code Amendment Allowing Existing Labour Forums To Continue Till New Tribunals Are Set Up

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Kerala HC Upholds Validity Of Industrial Relations Code Amendment Allowing Existing Labour Forums To Continue Till New Tribunals Are Set Up

Anamika MJ

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