"There is no harm in liberalising labour laws with a quid pro quo... unemployment insurance," NCEUS Chairman Arjun Sengupta said, while addressing the eighth Editor's Conference on social sector issues.
NCEUS, which has undertaken a review of the Indian labour law, is likely to present its report to the government by February after consulting trade unions and industry chambers, he said.
The suggestions would include amendments to the Industrial Dispute Act, which prohibit retrenchment of workers by enterprises employing over 100 persons without permission from the government.
In addition, NCEUS would also be suggesting creation of a labour code to simplify labour laws in the country.
Explaining the proposals being prepared by the Commission, NCEUS member K P Kannan said part of the unemployment insurance could be provided by the employers to ensure that retrenched worker has some kind of social security till he manages to find another job.
Sengupta also dismissed the general apprehension that rigid labour laws are preventing employment generation but added, "flexible labour laws are needed as they would be good for the workers."