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Labour Reforms Bill will Make it Tougher for Workers to Strike

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New Delhi: The Union Cabinet on Wednesday approved The Industrial Relations Code Bill, 2019, which proposes to consolidate The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947. The Narendra Modi government has proposed to make it difficult for employee unions to go on strike, while easing the way for firms to retrench workers, in the new labour code on industrial relations that it is scheduled to table in Parliament Wednesday.

The move follows recent government initiatives to boost investment, including a sharp cut in corporate taxes, relaxation of foreign investor rules, and a push for privatization. A comprehensive reforms push may help revive a slowing economy and ultimately boost employment generation.

 

The bill includes fixed-term employment as a category of employment in classification of workers, a provision that workers and unions view as casualization of the workforce. However, it has been a long pending demand of employers to manage elasticity of demand at the shop floor without hiring permanent employees.

Termination of service of a worker at the completion of tenure of fixed-term employment will not be considered retrenchment. At the same time, even though the government has retained the clause that firms with more than 100 employees will need permission from the appropriate government for closure, retrenchment and layoffs, it has provided the flexibility to state governments to reduce or increase this threshold.

In many states like Maharashtra, West Bengal, Gujarat and Kerala, there are already state laws in force recognising trade unions and the proposed central code won’t override these laws. But in other states, including Uttar Pradesh, Tamil Nadu, Karnataka and Rajasthan, the Central law will apply in this regard.