Wider social security net for labour: Officials | Economic Times

NEW DELHI The new Industrial Relations Code that sets fresh rules for hiring and firing of labour will not lead to "mass-scale exploitation" of workers, as it has not compromised on the aspects that protect workers’ rights of employment, officials in know of the matter said.Critics of the new law have raised concerns over the code increasing the threshold to retrench workers and close industrial units without government permission to 300 workers, three times the previous cap."There has been no empirical evidence that it will promote hire and fire. Further, the IR Code envisages a monetary benefit equivalent to 15 days of wages under the newly created re-skilling fund," an official said.The new code protects rights such as notice before retrenchment, compensation at the rate of 15 days wages per completed year of service and pay in lieu of notice period, the official said.The Economic Survey, 2019 had highlighted a phenomenon of 'dwarfism' — of firms which were surviving for more than 10 years but with stunted growth in terms of employment. "The decisions were taken as it was observed that the threshold under labour legislation creates a perverse incentive to remain small," he said.The Centre had particularly looked into the case of Rajasthan that in 2014 had done away with the requirement of prior permission before retrenchment for firms having fewer than 300 workers. After this, the number of factories in Rajasthan having over 100 workers increased significantly, the official said.Sixteen states had already increased the threshold under the Industrial Disputes Act to 300 workers before Parliament passed the code. Officials said even in the existing Industrial Disputes Act, 1947, the requirement of permission was only in respect of factories, mines and plantations.FIXED-TERM EMPLOYMENTFixed-term employment is an "option that would give more opportunities to workers", said the official. While such employees have been made statutorily entitled for all benefits and service conditions equivalent to those of a regular employee, the code on industrial relations also extends benefit of gratuity even for an FTE contract of one year, which is five years in case of a regular employee.SOCIAL SECURITY NETCiting new welfare provisions that have been introduced in the Occupational Safety, Health and Working Condition Code, 2020, the official said while ESIC has been extended to plantation workers, an appointment letter had been made compulsory, free annual health check-up has been introduced, and a bipartite safety committee has been introduced for establishments in factory, mines and plantation in place of hazardous factories.The new rules also reduced the threshold for establishments to provide canteen and crèche facilities, said the official. Meanwhile, migrant workers will be able to port ration facilities and avail of benefits from the building and other construction cess. The code would entitle women to be employed in all establishments for all types of work, and even during night, the official said.Experts are, however, apprehensive about the changes.