To limit outside leadership of trade unions, Section 23(2) of the Industrial Relations Code, 2020…

Section 23(2) of the Industrial Relations Code, 2020 provides that all office-bearers of a registered trade union, except not more than one-third of the total number of office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the union is connected (formerly s.22 of the Trade Unions Act, 1926). Outsiders can therefore hold at most one-third of the offices, subject to a ceiling of five. Under the Explanation to Section 23(2), an employee who has retired or has been retrenched is not treated as an outsider. Section 23(1) has a separate rule for a trade union in an unorganised sector (a sector notified by the appropriate Government): not less than one-half of its office-bearers must be persons actually engaged or employed in the establishment or industry. The other combinations (one-half or five, one-third or seven, one-fourth or three) do not appear in the Code.