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Home >Opinion >Views >Opinion | New industrial code a positive step for the changing world of work

The new Industrial Relations Code, 2019 provides a clear definition of how fixed-term employment should be looked at hereon. It would help to formalize, rationalize and simplify the process of having contractual employees at employers’ discretion. The reform initiative would also protect the interest and benefits of employees in fixed terms as regular workers. In a nutshell, it provides clarity of law, and a road map has been defined in terms of fixed-term employment. This should help both employers and their employees, thus creating ease in doing business.

The code will open doors for providing employment to many labour market outsiders across industries. It will also enable employers to hire employees for short-duration projects, employees interested in doing more than one job as well as when employers want to hire additional number of employees due to seasonal increase in business.

However, if an employer wishes to terminate an employee’s contract early, if such provisions are absent in an agreement— the fear of loss of employment may remain for the employee. Also, currently, the non-renewal of a fixed-term contract constitutes a dismissal in law. Such aspects are now left open in the IR Code Bill 2019. The proposed law has vested powers with the government officers for adjudication of disputes involving penalty as fines, thereby lessening the burden on tribunal.

The proposed legislation will help create an ecosystem for job creation and will support startups seeking talent across skill sets with short-term engagements.

The re-skilling budget couldn’t have come at a better time. With the changing world of work, re-skilling helps create an ecosystem of learning and will support startups seeking talent across skill sets with short-term engagements. Given the new gig economy environment, employment has moved from a lifetime contract to a taxicab relationship. Flexibility and adaptability take priority over long-term structured employment. And while every employer requires skilled workers, we have a market failure in skill financing. The proposed re-skilling fund will help deal with the skilling challenges that both employers and employees face during transition between roles or organizations. Employers could go a step further and redirect the savings realized from automation and AI into skilling retrenched employees and converting them into an upgraded, productive workforce. The focus would be on creating agile workforces with transferable skills.

For companies, while re-skilling, the costs incurred include primarily the cost of re-skilling, wages and lost productivity while the employee retrains. It is worth asking what the costs incurred would be if instead of re-skilling, employers choose to fire employees and hire new ones. For governments, on the other hand, the considerations include the costs and benefits of re-skilling of workforce, who would otherwise remain unemployed for extended periods of time. The other aspects of the bill pave way for requirement-based hiring and promote setting up of more enterprises, thereby creating more job opportunities. Not only does this increase transparency and accountability but also leads to higher productivity.

Neeti Sharma is senior vice-president, and Prashant Singh is head, compliance and payroll business at Teamlease Services.

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