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Thursday, October 22, 2020

Firms with up to 300 workers can hire and fire without Govt nod: Bill in Lok Sabha

The Industrial Relations Code has raised the threshold for requirement of a standing order -- rules of conduct for workmen employed in industrial establishments -- to over 300 workers.

Written by Aanchal Magazine | New Delhi | Updated: September 20, 2020 11:34:50 am
Firms with up to 300 workers can hire and fire without Govt nod: Bill in Lok SabhaThe Standing Committee on Labour had recommended against the expansion of the required notice period for strike beyond the public utility services, as is the case at present. (Representational Image)

The government has proposed to introduce more conditions restricting the rights of workers to strike, alongside an increase in the threshold relating to layoffs and retrenchment in industrial establishments with 300 workers, from 100 workers or more at present — steps that are likely to provide more flexibility to employers for hiring and firing workers without government permission.

These changes have been proposed in The Industrial Relations Code Bill, 2020, introduced in Lok Sabha Saturday. Labour and Employment Minister Santosh Kumar Gangwar also introduced two other labour code Bills: The Code on Social Security, 2020, and The Occupational Safety, Health and Working Conditions Code, 2020.

The Industrial Relations Code has raised the threshold for requirement of a standing order — rules of conduct for workmen employed in industrial establishments — to over 300 workers.

Explained

Dilutes rights of workers

Workers in small establishments (with up to 300 workers) will have their rights watered down with no protection of trade unions, labour laws. Moreover, there's a provision that makes a legal strike well-nigh impossible.

This implies that industrial establishments with up to 300 workers will not be required to furnish a standing order, a move which experts say will enable companies to introduce arbitrary service conditions for workers.

Read | Cut House short but don’t use Covid to duck debate, push Bills, says Opp

In its report submitted in April, the Standing Committee on Labour had also suggested hiking the threshold to 300 workers, noting that some state governments like Rajasthan had already increased the threshold and this, according to the Labour Ministry, had resulted in “an increase in employment and decrease in retrenchment”.

“The Committee desire that the threshold be increased accordingly in the Code itself and the words ‘as may be notified by the Appropriate Government’ be removed because reform of labour laws through the executive route is undesirable and should be avoided to the extent possible,” it stated.

The Industrial Relations Code states that the provision for standing order will be applicable to “every industrial establishment wherein three hundred or more than three hundred workers, are employed, or were employed on any day of the  preceding twelve months”.

XLRI professor and labour economist KR Shyam Sundar said: “The increase in the threshold for standing orders from the existing 100 to 300 is uncalled for and shows the government is very keen to give tremendous amount of flexibility to employers in terms of hiring and firing… dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all industrial establishments employing less than 300 workers. This is complete demolition of employment security.”

The IR Code also proposes that no person employed in an industrial establishment shall go on strike without a 60-day notice and during the pendency of proceedings before a Tribunal or a National Industrial Tribunal, and sixty days after the  conclusion of such proceedings, with the latter being a freshly introduced condition for strikes in the latest version of the Code.

The Standing Committee on Labour had recommended against the expansion of the required notice period for strike beyond the public utility services, as is the case at present.

At present, a person employed in a public utility service cannot go on strike unless he gives notice for a strike within six weeks before going on strike or within fourteen days of giving such notice, which the IR Code now proposes to apply for all industrial establishments.

“The Committee finds no plausible reason for expanding the ambit of this provision indiscriminately to all the industrial establishments as restrictions should not apply to all strikes and demonstrations which are meant to assure freedom of industrial actions. The Committee, therefore, desires that the requirement of fourteen days’ notice to go on strike be made applicable only to public utility services like water, electricity, natural gas, telephone and other essential services,” the Standing Committee had said.

The IR Code Bill has also proposed a worker re-skilling fund though the contributions for the fund are only detailed from the employer of an industrial establishment amounting to fifteen days wages last drawn by the worker immediately before the 35 retrenchment along with the contribution from such other sources. The mention of other sources for funding the re-skilling fund, experts said, is vague.

“The reskilling fund is arbitrarily framed as the Code has no idea from where the funds for the same will come apart from employers’ contributions. These are left to the rule-making processes and the bureaucrats. Further, who will  reskill the workers and how adequate the funding will be are not clear.

In European countries, retraining and other labour market policies should be put in place by the employer in consultation  with the trade unions for the retrenched workers. The Code lacks clarity on the substantive and procedural aspects of this Fund which will fizzle out like the National Renewal Fund in the 1990s unless the government has a clear picture in mind,” Sundar said.

The other two codes have also proposed changes for expanding social security and inclusion of inter-state migrant workers in the definition of
workers.

The Social Security Code proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers. Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security, with the total contribution not exceeding 5 per cent of the amount payable by the aggregator to gig and platform workers.

The Occupational Safety, Health and Working Conditions Code has defined inter-state migrant workers as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month. The proposed definition makes a distinction from the present definition of only contractual employment.

However, the Code has dropped the earlier provision for temporary accommodation for workers near worksites. It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.

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