In order to bring about long-needed reforms in labour and employment legislation and to boost its “Make in India” programe, the Government has proposed a draft Labour Code on Industrial Relations Bill and the Labour Code on Wages Bill. Some of the key proposals include:
- Employers’ ability and flexibility to hire and dismiss workers will be enhanced – existing provisions relating to compensation or quantum thereof for dismissal, or obtaining permission from the government for mass retrenchment or layoffs, are proposed to be relaxed or entirely done away with.
- In order to minimize the negative impact of unionization and to ensure that adequate numbers of workers are actually represented in trade unions, the Code proposes to enhance the minimum number of workers necessary to form a union, from the current minimum of 7 workers to the greater of 10% of the total workers in an establishment or 100 workers.
- The draft Code on Wages proposes a uniform definition of “wages”, in contrast to several different definitions provided under separate current legislation – this is with a view to provide simplified and uniform protection for all workers.
The draft Code has met with resistance from unions and employers’ representatives alike, and it may be at least a year before the new Codes are actually tabled in Parliament.