As labour is in the concurrent list, the Union government should come out openly relating to this number in the law itself.
In a big boost to proposed labour reforms, the parliamentary standing committee on labour has asked the Centre to make it part of the Industrial Relations Code 2019 that firms with up to 300 employees can fire people or close down units without prior consent of the government. In an interview to FE’s Prasanta Sahu, the panel’s chairman and BJD MP, Bhartruhari Mahtab, said that the Rajasthan experience of giving such freedom to firms has resulted in more permanent jobs. Edited excerpts:
The industry was asking for a higher threshold for firms to have freedom to retrench workers and/or shut down.
There was a demand from the industry that the limit should be raised to firms with 300 employees. There was also a demand from the trade unions side that the limit should be at 100 as they feared increasing threshold will lead to large-scale retrenchments. The Centre was of the view that it should left to respective state governments to fix the cap. In our view, leaving the matter to states to decide will lead to complications as different states might adopt different policies.
As labour is in the concurrent list, the Union government should come out openly relating to this number in the law itself. Rajasthan, which has implemented the 300-employee norm, has generated more employment of permanent nature. Therefore, on balance, we recommended that the cap in this regard should be 300 and not 500 (as demanded by some industries).
Why did the panel not favour fixed term employment (FTE) as suggested in the Code?
A number of stakeholders like trade unions were opposed to FTE. The central government was of the opinion that FTE is the norm of the day and should be open ended. Instead of keeping it open ended, we have suggested to keep it
to two terms as is happening in China.
The minimum and maximum tenure of the term should be specified in the law itself. We also took into cognizance the trade unions’ concern that FTE may lead to loss of permanent job. But it is also necessity in today’s times. For example, in the civil aviation industry, engineers and pilots are needed for fixed term.
Will the panel’s suggestions address the concerns of various stakeholders?
This is a balanced report. It looks into the interest of the workforce to a very great extent. It also helps the industry to maintain good relations with workforce. I think our report will be appreciated by both by the industry, the labour force and the government.