Introduction:
In a significant ruling concerning labour law reforms and transitional legislative mechanisms, the Kerala High Court recently upheld the constitutional validity of Section 104(1A) of the Industrial Relations Code (Amendment) Act, 2026. The Court held that the provision, which permits existing labour adjudicatory forums established under repealed labour statutes to continue functioning until newly constituted tribunals become operational, is a lawful and constitutionally valid transitional arrangement rather than a “manifestly arbitrary” exercise of legislative power.
The judgment was delivered by a Division Bench comprising Justice Devan Ramachandran and Justice Basant Balaji in the case titled M.K. Suresh Kumar and Another v. Union of India, Writ Appeal No. 1051 of 2026. The Bench dismissed the appeal filed against the earlier decision of a Single Judge who had also upheld the validity of the amendment and rejected the challenge mounted by the appellants.
The dispute arose in the context of sweeping labour law reforms introduced by Parliament through the Industrial Relations Code, 2020, which consolidated and repealed several pre-existing labour legislations. Section 104(1) of the Code repealed three significant labour statutes: the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947.
However, implementation of the new tribunal framework contemplated under the Code encountered practical and administrative delays. In response, Parliament enacted the Industrial Relations Code (Amendment) Act, 2026, inserting Section 104(1A). The newly inserted provision enabled Labour Courts, Industrial Tribunals, and other statutory authorities functioning under the repealed enactments to continue adjudicating disputes temporarily until the new tribunals under the Industrial Relations Code became functional.
The appellants challenged this transitional arrangement, contending that once the old statutes stood repealed, authorities created under those enactments could not continue exercising jurisdiction. They argued that the amendment undermined the statutory scheme envisioned under the Industrial Relations Code itself, particularly Sections 44(7) and 51(1), which contemplated constitution of new multi-member tribunals and transfer of pending cases to those bodies.
The case therefore raised important constitutional questions concerning legislative competence, the validity of transitional provisions, continuity of adjudicatory mechanisms during statutory reform, and the doctrine of manifest arbitrariness under Article 14 of the Constitution.
The Kerala High Court was required to examine whether Parliament could validly preserve the functioning of old adjudicatory bodies temporarily despite repeal of the parent statutes, or whether such a mechanism violated constitutional guarantees and the framework of the new labour code itself.
The ruling assumes wider significance because the Industrial Relations Code forms part of the broader labour law codification exercise undertaken by the Union Government. The judgment also addresses the practical realities associated with large-scale institutional transition and judicial continuity in labour adjudication.
Arguments of the Parties:
The appellants challenged the constitutional validity of Section 104(1A) of the Industrial Relations Code (Amendment) Act, 2026 primarily on the ground that it allowed adjudicatory authorities constituted under repealed statutes to continue exercising jurisdiction despite the coming into force of the new Industrial Relations Code.
Appearing for the appellants, Advocate A. Abdul Nabeel argued that the continuation of Labour Courts and Industrial Tribunals constituted under the repealed Industrial Disputes Act, 1947 was contrary to the legislative intent and scheme of the Industrial Relations Code, 2020.
The appellants contended that once Parliament repealed the Industrial Disputes Act and related enactments through Section 104(1) of the Code, all authorities functioning under those statutes effectively lost their legal foundation. According to them, tribunals created under repealed statutes could not lawfully continue exercising adjudicatory powers unless specifically authorised within the framework of the new law in a constitutionally valid manner.
A central aspect of the appellants’ challenge was based on Sections 44(7) and 51(1) of the Industrial Relations Code. These provisions contemplate establishment of new tribunal structures and transfer of pending disputes to newly constituted tribunals under the Code.
The appellants argued that Parliament had consciously envisaged an entirely new adjudicatory framework comprising multi-member tribunals under the Industrial Relations Code. Therefore, insertion of Section 104(1A), which permitted continuation of old authorities, allegedly defeated the statutory purpose and diluted the reformative structure intended by the Code.
The appellants further contended that the amendment was arbitrary and unconstitutional because it created a contradictory legal situation. On one hand, Parliament repealed the earlier labour statutes; on the other, it allowed institutions functioning under those repealed statutes to continue adjudicating disputes. According to the appellants, this amounted to legislative inconsistency and legal irrationality.
Reliance was also placed upon constitutional principles under Article 14 of the Constitution, particularly the doctrine of arbitrariness. The appellants argued that permitting obsolete forums to continue indefinitely under repealed enactments was arbitrary, unreasonable, and incompatible with the objectives of modern labour law reform.
The petitioners further submitted that litigants were entitled to have their disputes adjudicated by the new tribunal structure contemplated under the Industrial Relations Code rather than by authorities functioning under repealed laws. According to them, the amendment effectively postponed and frustrated implementation of the new adjudicatory regime.
On the other hand, the Union Government strongly defended the constitutional validity of Section 104(1A). Appearing for the respondents, Additional Solicitor General P. Sreekumar and counsel Amal Parthasarathy argued that the provision was merely a temporary transitional mechanism enacted to ensure continuity in labour adjudication during the period required for constituting new tribunals.
The Union Government contended that the amendment did not permanently preserve the old labour adjudicatory structure. Instead, it only enabled existing tribunals and statutory authorities to continue functioning temporarily until the tribunal system contemplated under the Industrial Relations Code became operational.
The respondents emphasised the severe practical consequences that would follow if Section 104(1A) were struck down. According to the Union Government, invalidating the provision would create a legal vacuum and completely halt labour adjudication across the country until new tribunals were constituted.
The Government argued that such an outcome would seriously prejudice workers, employers, trade unions, and litigants awaiting adjudication of industrial disputes. It was submitted that Parliament enacted the transitional provision precisely to avoid disruption of access to justice and ensure uninterrupted adjudicatory functioning.
The Union Government also contended that Sections 44(7) and 51(1) of the Industrial Relations Code were not inconsistent with Section 104(1A). According to the respondents, those provisions would become fully operational once the new tribunals were established, while Section 104(1A) merely governed the interim period.
The respondents further argued that the legislature possesses broad authority to enact transitional and saving provisions while implementing statutory reforms. Such provisions are common in legislative practice and are intended to ensure smooth institutional transition without administrative chaos or denial of legal remedies.
Importantly, the Union Government pointed out that the appellants had not challenged Parliament’s legislative competence to enact the amendment. In the absence of any challenge to legislative competence, the respondents argued that the Court should exercise restraint before invalidating a transitional statutory arrangement enacted by Parliament.
The respondents therefore urged the Court to uphold the amendment as a reasonable and constitutionally valid mechanism designed to preserve continuity of labour adjudication during institutional transition.
Court’s Judgment:
The Kerala High Court upheld the constitutional validity of Section 104(1A) of the Industrial Relations Code (Amendment) Act, 2026 and dismissed the writ appeal filed by the appellants.
The Division Bench comprising Justice Devan Ramachandran and Justice Basant Balaji agreed with the findings recorded earlier by the Single Judge and held that the amendment constituted a legitimate transitional arrangement rather than an arbitrary or unconstitutional exercise of legislative power.
At the outset, the Court examined the challenge based on Article 14 of the Constitution and the doctrine of arbitrariness. The Bench referred to the landmark judgment of the Supreme Court in Shayara Bano v. Union of India [(2017) 9 SCC 1], where the Supreme Court clarified that legislation can be invalidated on grounds of arbitrariness only if it is “manifestly arbitrary” or “shockingly arbitrary.”
Applying this principle, the Kerala High Court held that Section 104(1A) did not meet the threshold of manifest arbitrariness required for striking down legislation.
The Court observed that the impugned provision merely enabled existing Labour Courts, Industrial Tribunals, and statutory authorities to continue functioning temporarily until the new tribunals contemplated under the Industrial Relations Code were established and made operational.
Far from being arbitrary, the Court held that the provision created a practical and necessary transitional mechanism intended to prevent disruption in adjudicatory processes and avoid prejudice to litigants.
The Bench accepted the Union Government’s submission that striking down the amendment would result in a complete cessation of adjudicatory functions under labour laws. The Court observed that such a legal vacuum would adversely affect workers, employers, and other litigants who depend upon labour adjudication mechanisms for resolution of industrial disputes.
The Court therefore concluded that the amendment was enacted precisely to ensure continuity of justice delivery during the transition from the old statutory regime to the new tribunal framework.
A significant aspect of the judgment was the Court’s interpretation of the relationship between Section 104(1A) and Sections 44(7) and 51(1) of the Industrial Relations Code.
The appellants had argued that the transitional provision contradicted the Code’s mandate regarding constitution of new tribunals and transfer of pending cases. However, the Court rejected this contention.
The Bench held that Sections 44(7) and 51(1) indeed contemplate mandatory transfer of cases and establishment of new tribunals. However, those provisions become fully operational only after the new tribunals are actually constituted.
The Court reasoned that Section 104(1A) specifically governs the intervening period before such constitution takes place. Therefore, rather than contradicting the statutory framework, the transitional provision complements it by bridging the gap during institutional transition.
The Court characterised Section 104(1A) as both a “non-obstante” and “transitory” provision intended to operate only temporarily until the new adjudicatory bodies become functional.
The Bench also took note of the practical realities surrounding constitution of tribunals under the Industrial Relations Code. It observed that the process of establishing the new tribunal structure was already underway and that issues concerning tribunal constitution were pending before the Supreme Court.
Importantly, the Court emphasised that the appellants had not challenged Parliament’s legislative competence to enact the amendment. In the absence of such a challenge, the Court held that there was no constitutional basis to interfere with the legislature’s chosen transitional mechanism.
The judgment reflects judicial recognition that large-scale statutory reforms often require transitional arrangements to preserve continuity and prevent administrative paralysis. The Court accepted that Parliament possesses the authority to design interim mechanisms ensuring smooth transition between old and new legal regimes.
Ultimately, the Kerala High Court concluded that Section 104(1A) was a reasonable, practical, and constitutionally valid provision enacted in the larger interest of preserving uninterrupted labour adjudication and access to justice.
By dismissing the appeal, the Court reaffirmed the principle that transitional legislative arrangements enacted to avoid legal vacuums and institutional disruption deserve judicial deference unless they are clearly unconstitutional or manifestly arbitrary.
The judgment therefore strengthens the legal foundation of the ongoing labour law reform process and recognises the necessity of pragmatic transitional governance during implementation of major institutional changes.