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.
The omnibus Industrial Relations Code soon to be tabled in Parliament, amalgamating four existing Central laws, will make it near impossible for trade unions to hold the employers to ransom, even as it seeks to pioneer the concept of unions with defined representative character as determined negotiating agents for the causes of workers. It would also get more difficult to strike work legally in establishments once the Code takes effect, as it proposes to extend the mandatory 14-days prior notice condition to practically all sectors, while currently such notice is required to be served only in case of “public utility services”, although these are defined very broadly.
Also, when the conciliation process is on — which usually follows the strike notice and often takes several months — unions cannot resort to strikes.
Furthermore, either party — employer and the sole negotiating union — will have the option under the Code to refer an industrial dispute for adjudication. This again could come in handy for the businesses to frustrate bids to use strike tools like mass leaves because once the adjudication process begins, strikes will be illegal till it reaches a finality.
According to the Code, in cases where there are multiple trade unions in an industrial establishment, for any union to be designated as sole negotiating union, it will require the support of 75% of workers on the muster roll, a condition which experts say would make it virtually impossible for any union to get the title. If no union meets the criterion, a negotiating council will be set up.
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.
The Code providing for full-benefit, fixed-term employment of any duration in all industries would come in handy for manufacturing units, including MSMEs to adjust their pay rolls to the seasonality and vicissitudes of their businesses. This flexibility, first introduced in the export-intensive garment sector in June 2016, was later extended to the leather industry and put into effect in all sectors via a March 2018 notification issued under the Industrial Employment (Standing Orders) Act, 1946 and the Code would cement the norm.
Although a key proposal in an earlier version of the Code to allow factories, mines and plantations employing up to 300 people -— against 100 now -— to retrench/lay off workers and/or shut shop without government approval has been removed, states will have a window to change the employee strength threshold for retrenchment purpose via notification route. This, according to industry bodies, too, could address a major concern of companies, including MSMEs.
It is, however, not clear if the Code would bar outsiders from becoming office-bearers of trade unions in the organised sector. The earlier version had proposed this but there were reports that the government was having second thoughts on this, given the opposition from unions. “The Code has made the workers’ right to resort to strike difficult. Earlier those providing public utility services would have give a notice 14 days in advance before resorting to a strike. The threshold has not been changed in the Code and has been made applicable to all industrial sectors,” said KR Shyam Sundar, professor at XLRI Jamshedpur and a labour law expert.
According to him, making stringent provision for a legal strike applicable to all industrial establishments will make a legal strike virtually impossible. “Stringent conditions to define the legality of strike will eventually weaken the democratic right of the workers to resort to strike,” he contended.
RSS-affiliated Bharatiya Mazdoor Sangh’s general secretary Vrijesh Upadhyay said, “Earlier, we used to get registration only; the IR code will give us recognition.”