To facilitate gainful re-employment of workers retrenched by firms, the government is considering helping them acquire new skills by part-funding the training. According to a proposal that is likely to be included in the draft code on industrial relations being prepared by the labour ministry, in addition to an enhanced 45 days’ severance pay from the employer, a retrenched worker would get up to 15 days’ wage from the government for undergoing a skill development course provided he too makes a matching or higher contribution.
Currently, the severance package for workers is 15 days’ pay for every completed year of service and the draft code also includes a proposal to raise this to 45 days’ pay. The government’s contribution to skill development of a retrenched worker would be 15 day’s pay for every completed year of service.
Official sources told FE the move is aimed at encouraging workers to invest in self-development and improve their employability rather than spend the entire compensation money received from employers for consumption.
The sources added that the proposal was now in the “discussion stage” only but could find its way into the draft code. The new code on industrial relations would amalgamate three extant labour laws — the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947.
“If a move of this sort is being contemplated by the government, it would incentivise the youth to invest in their skill development. The job crisis that stares at us doesn’t simply need more rights or resources, it needs a paradigm which helps the people adopt the skills necessary for getting decent jobs,” said Rituparna Chakraborty, co-founder and senior vice-president at recruitment company TeamLease.
However, workers at establishments where less than 50 people are employed on a permanent basis would not stand to benefit from the labour ministry’s new proposal. Also, it may not apply to workers in industrial establishments that takes up economic activities of a seasonal nature and employ people on a temporary basis. No compensation would be paid if a worker refuses to accept any alternative employment in the same establishment from which he has been laid off.
Analysts are of the view that the government should mandate the industry to pay the retrenched workers a part of the compensation amount in hand and the balance through a voucher which could be redeemed in a skill development institution for taking up a professional course.