The Industrial Relations Code is touted as one that would energise industry and spur economic activity, as it aims to free employees from the constraints of earlier labour laws.
What are the main features of the Industrial Relations Code?
The Industrial Relations Code combines the features of three erstwhile laws —
The Trade Unions Act, 1926,
The Industrial Employment (Standing Orders) Act, 1946, and
The Industrial Disputes Act, 1947.
It defines ‘workers’ to include, besides all persons employed in a skilled or unskilled, manual, technical, operational and clerical capacity, supervisory staff drawing up to ?18,000 a month as salary.
It introduces ‘fixed term employment’, giving employers the flexibility to hire workers based on requirement through a written contract.
Fixed term employees should be treated on a par with permanent workers in terms of hours of work, wages, allowances and other benefits, including statutory benefits such as gratuity.
It confers on the ‘appropriate Government’, that is the Centre or the State governments, the power to exempt, with or without conditions, any industrial establishment or class of industrial establishments from all or any of the provisions of the Code, if it is satisfied that adequate provisions exist to fulfil its objectives.
What does it say on trade unions?
Where there is more than one trade union in an establishment, the sole negotiating union status will be given to the one that has 51% of the employees as its members.
Where no union qualifies under this criterion, the employer must constitute a ‘negotiating council’ consisting of representatives drawn from the various unions, with only those with at least 20% of employees as its members.
What are the provisions on lay-off and closure?
The provisions that require the prior permission of the government for lay-off, retrenchment and closure are made applicable to only establishments that had employed 300 or more workers on an average per working day in the preceding 12 months.
The Code also allows the government to raise this threshold by notification.
A lay-off would be deemed illegal if it is effected without permission or is done despite refusal of permission, but it will not be so if the employee had been offered alternative employment that does not require any special skill or cause undue hardship.
The Code prescribes notice period, or payment in lieu of notice period, and prior government permission before retrenchment of anyone who has been in continuous service for a year or more.
Such a prior permission requirement is in place also for closure of a unit, with the application to be filed 90 days prior to the intended closure.
How does the new Code affect the right to strike?
The Code prohibits strikes and lock-outs in all industrial establishments without notice.
Similar restrictions have been given on the employer from announcing a lock-out.
The Industrial Disputes Act, 1947, had placed such restrictions on announcing strikes only in respect of public utility services. However, the present Code extends it to all establishments.