[Answered]“Labour reforms are much needed for Indian progress towards a $5 trillion economy.” In light of this discuss the changes made in The Industrial Relations Code Bill, 2019? What are the issues related to the changes?

Demand of the question

Introduction. Contextual Introduction.

Body. Discuss the importance, changes and issues related to The Industrial Relations Code Bill, 2019.

Conclusion. Way forward.

The road to a $5 trillion economy by 2025 is beset with many road blocks, one being various labour issues. Government is trying to push various labour reforms like The Code on Wages, 2019. The Industrial Relations Code Bill, 2019 is another such effort which proposes to amalgamate The Trade Unions Act, 1926, The Industrial Employment Act, 1946and The Industrial Disputes Act, 1947.

 Importance of TheIndustrial Relations Code Bill, 2019:

  1. The most important aspect of the Bill is that it presents the legal framework for ushering in the concept of ‘fixed-term employment’ through contract workers on a pan-India basis.Currently, companies hire contract workers through contractors.
  2. With the introduction of fixed-term employment, they will be able to hire workers directly under a fixed-term contract, with the flexibility to tweak the length of the contract based on the seasonality of industry.
  3. These workers will be treated on a par with regular workers during the tenure of the contract.
  4. The move to include it in a central law will help in wider reach, and states are expected to follow similar applicability.
  5. Fixed-term employment will help in keeping salaries and facilities to workers such as Provident Fund, gratuity, and medical benefits, the same as those for permanent labour.

Changes in TheIndustrial Relations Code Bill, 2019:

  1. The threshold required for government permission for retrenchment has been kept unchanged at 100 employees, as against the proposal for 300 employees in an earlier draft of the Bill, which was opposed by trade unions.
  2. Instead, the government has now provided flexibility for changing the threshold through notification. The rigidity of labour laws about laying off labour has often been cited by industry as the main reason limiting scalability and employment generation. At present, any company having 100 workers or more has to seek government approval for retrenchment.
  3. The provision of fixed-term employment, which helps in the flow of social security benefits to all workers along with making it easier for companies to hire and fire, in The Industrial Relations Code Bill.
  4. Workers under a fixed-term contract would be taken up depending upon the seasonality of the industry, but would be treated on a par with regular workers.

Issues related to Industrial Relations Code Bill, 2019:

  1. The unclear provision regarding retrenchment would lead to uncertainty, and discretionary behaviour during implementation by the central or state government.
  2. The moment the law will provide flexibility for the applicability, it leaves the matter to the discretion to the appropriate government (states or Centre). Then the clause can be misused.
  3. Any discretion in law leads to uncertainty, lack of clarity, discriminatory implementation, and provides scope for unnecessary usage.
  4. The government should be clear whether to increase the threshold or retain the threshold and face the consequences.
  5. Also, fixed-term employment needs to be introduced with adequate safeguards, otherwise it runs the risk of encouraging conversion of permanent employment into fixed-term employment.

The Industrial Relations Bill, 2019 is a welcome step towards labour reform needed to push nation towards $5 trillion economic goal by 2025. Labour reforms areone of the driver of economic growth and is must to push industrial productivity and efficiency. Government should accelerate their efforts in pushing such reforms for the economic health.

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