Layoffs: Labour panel asks for ‘better deal’ for workers

With an amendment in 1982, prior approval had got limited to establishments hiring 100 or more workers from the previous limit of 300 and plus. Earlier this year, the Union Cabinet had approved raising this limit to 1,000 but an amendement in the labour law to incorporate the change has not been done. As a sop to the workers, the Commission has pegged higher the retrenchment compensation linked to the operational status of the enterprise and also introduced other safeguards, such as the company offering outsourced jobs to retrenched workers, giving them or their union a chance to take

up the management and underwrite facilities for medical treatment and education of children.

In the case of closure of a sick unit, a worker’s compensation has been pegged at 30 days wage for each completed year of service. The rate has been suggested at 45 days wage for each year where layoffs are being done to improve the viability of the sick unit.

For profit-making organisations, a compensation rate of 45 days wages for each year has been recommended where the unit is being shut down and 60 days wages in case of retrenchment to improve the unit’s economics.

Currently, the compensation is paid at 15 days wages for each completed year of service.

For establishments employing less than 100 workers, the commission has prescribed half of the compensation rates suggested for enterprises employing 300 or more.

Labour Minister Sahib Singh Verma is trying to garner support from the unions and the employers before the report is placed in Parliament for discussion. The Commission has recommended that before the management undertakes the closure or the layoffs, it must — as a precondition to closure or retrenchment—clear all arrears and compensation due to the worker.

While raising the compensation, the Commission has suggested that Chapter VA of the Industrial Disputes Act be amended to cut down the notice period for retrenchment and closure. Workers should be given two months’ notice or pay in lieu of that instead of three months’ notice that they are currently entitled to, adds the report.