The Industrial Relations Code, 2019, is a radically revised version of the original draft of 2015 in many ways, due to the strident protests of the unusually united trade union movement with respect to clauses relating to outside leaders, recognition of trade union(s), union leadership freedom, easier firing and closure, among others.

Unfortunately, the government has not done a good job as the code has many, and even, serious deficits. It is particularly striking that as it went about legitimizing the codification of labour laws by citing the recommendation of the Second National Commission on Labour (SNCL), it has not referred to some of the good recommendations made by it. For example, SNCL had recommended to exempt the unorganized sector from the tough eligibility clauses (10% or 100 workers) to form a union. This is missing in the code. It has set 75% or more membership in a bargaining unit, a stupendously high benchmark, for a trade union to be declared as a sole bargaining agent. Hence, it reveals the complete absence of connect of the lawmakers with the empirical realities of industrial relations.

The bill provides for a single adjudicating body, a tribunal with either one or two members. The code is not clear as to when and how the single- or two-member body will be determined. In the case of the two-member bench, the award should be unanimously determined and, in case it’s not possible, then the point(s) of differences will be sent to the government and the latter will nominate a judicial member from another tribunal to join the existing two and the three will resolve the differences by a majority.

This is completely befuddling as the government is playing with the time of the disputants by laying down a layered procedure, which will surely cause delays in the delivery of justice. If the government wished to enrich the deliberations of the tribunal, it could have straightaway constituted a three-member body and provided for majority resolution instead of this circuitous process. The lawmakers should by now know that delays are costly for the employers and constitute a woeful tale for the hapless workers.

Though the bill has retained the existing provision related to the employee threshold at 100 when going for retrenchment or closure of a unit, it has protected those states that have changed the threshold from 100 to 300. It also empowers states to change the threshold through an executive order.

The mode of reform stipulated is far more serious and even harmful for democratic processes of lawmaking than the very reform act of affording flexibility to employers. Because it has removed lawmaking from the bounds of the legislature to the executive, who can even whimsically destroy thousands of jobs and provide freedom to close hundreds of establishments. If the legislature is removed, then where is the space for social dialogue, which at any rate has been relegated to the sidelines at the national level and is weak, if not absent at the state level.

It has introduced some absurd notions of first offence and compounding offences, and designed penalties without application of mind. According to the proposed structure of the penal system, an illegal strike and lockout is far more socially harmful than an illegal retrenchment and closure. While for the illegal strike workers will potentially land in jail, employers violating rules will face relaxed indictment.

In short, the code is incomplete, inadequate and designed with warped logic. It seems to reflect lack of sensitivity on the part of the lawmakers as these laws can hurt both economic efficiency and labour welfare.

K.R Shyam Sundar is a labour economist and professor at XLRI, Jamshedpur.

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