Labour and employment minister Santosh Gangwar on Thursday introduced the Labour Code on Industrial Relations bill in the Lok Sabha, which aims to improve the business environment in the country largely by reducing the labour compliance burden of industries.
The bill proposes to make it easier for an employer to engage and disengage workers based on requirement. This will make the process of hiring and firing smoother depending on elasticity of demand in the shop floor.
The legislation defines “industry” as any systematic activity carried on by co-operation between an employer and worker, whether such worker is employed by such employer directly or by or through any agency, including a contractor, for the production, supply or distribution of goods or services. This holds true whether or not any capital has been invested for the purpose or such activity is carried on with a motive to make any gain or profit, according to the bill.
The bill advocates fixed term employment of any duration across sectors, but makes provision for all statutory benefits such as social security and wages at par with regular employees. It says mass casual leave will be considered a strike.
“To impart flexibility to the exit provisions (relating to retrenchment), the threshold for prior approval of appropriate government has been kept unchanged at 100 employees,” the labour ministry said. However, a provision for changing this number has been added, it said. The ministry also said that the bill has a provision to create a re-skilling fund for the benefit of workers.
To help employers check constant unionism, the bill introduces a feature of ‘recognition of negotiating union’ under which a trade union will be recognized as sole ‘negotiating union’ if it has the support of 75% or more of the workers on the rolls of an establishment. As several trade unions are active in companies, it will be tough for any one group to manage 75% support. This, thus, takes away the negotiating rights of unions. In such a case, a negotiating council will be constituted for negotiation, according to the bill.
Industry experts said that the move will bring positivity in business environment, but workers unions called it a systemic attack on employee welfare. “Where is the labour welfare in this Industrial Relation Code. You want to contractualize the workforce, take their collective bargaining right, curtail their right to strike and even on mass leave. Hiring and firing is what the government seeks to formalize through this,” said Amarjeet Kaur, general secretary, All India Trade Union Congress.
However, Rituparna Chakraborty, co-founder and executive vice president of TeamLease Services, said the move is “encouraging to see”. “It showcases the government’s intention to create an eco-system for job creation. The reaffirmation of entitlement to wages as well as statutory and social security benefits for fixed term employees at par with regular employees is a just move. Similarly the amendment to the current rule wherein employers who intend to let go more than 100 employees requiring prior approval from the concerned authority is also a good move,” Chakraborty said.
