Labour Codes aimed at expanding welfare measures to workers in sectors, criticisms unfounded: Govt

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The workers' rights such as notice before retrenchment and pay in lieu of notice period have not been compromised," the ministry said

The Union Ministry of Labour and Employment on Monday allayed doubts over the reforms Bills known as Labour Codes passed by Parliament a few days ago and said that the criticisms being aired are unfounded.

The ministry said that the Labour Codes aimed at expanding labour welfare measures not only to the existing beneficiaries but also to over 40 crore workers in the unorganised sector.

On raising the employee limit of smaller units for closure to 300, the ministry said that the Parliamentary Standing Committee had also recommended an increase in threshold from 100 workers to 300 workers for seeking prior permission for retrenchment, lay-off and closure.

It is only the aspect of prior permission of the appropriate government which has been removed and other benefits and workers' rights have been kept intact.

“The workers' rights such as notice before retrenchment, compensation at the rate of 15 days wages per completed year of service and pay in lieu of notice period has not been compromised," the ministry said.

The IR Code envisages an additional monetary benefit equivalent to 15 days of wages under the newly created reskilling fund. There has been no empirical evidence to suggest that a higher threshold promotes hire and fire, said the ministry in a statement, the government said.

The ministry also said that the Economic Survey, 2019 has analysed about the pain of dwarfism prevalent in Indian firms.  Dwarfism refers to firms which are surviving for more than 10 years but their growth in terms of employment is stunted.

It further said that following the example of Rajasthan, 16 states, including Rajasthan, had already increased threshold under the ID Act from 100 workers to 300 workers, before passing of IR Code. 

“These states include, AP, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, HP, Jharkhand, Karnataka, MP,  Meghalaya, Odisha, requirement of permission before retrenchment or closure does not serve much purpose but at the same time leads to accumulation of losses and liabilities of the firm on the verge of closure,” the government said.

The ministry said that fixed-term employment is pro-worker. It has already been notified by Central government and 14 other States, including Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

Image credit: The Hindu

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