Industrial Relations Code Bill, 2019

The Union Cabinet had approved The Industrial Relations Code Bill, 2019, in November last year. The bill intends to amalgamate The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947. It is the third labor code out of four that got approved by the cabinet.

Key Features of the Bill

• The bill attempts to enable companies to hire workers on a fixed-term contract of any duration.
• It has retained the limit of the worker count at 100 for prior approval before reduction but maintains a provision for changing the number of such contractual employees through notification.
• It also has provisions for setting up a two-member tribunal where important cases will be settled jointly. The rest, less urgent cases are to be handled by a single member tribunal, thus allowing speedier disposal of cases.
• It entrusts powers to the government officers for judging disputes concerning penalties as fines.
• A feature of ‘recognition of negotiating union’ has been introduced. Under this provision, a trade union will be recognized as the only ‘negotiating union’ in case it has the support of 75% or more of the workers of an establishment.
• When there are several trade unions active in a company, it is improbable that one group has 75% support. To prevent taking away the worker’s right to negotiate, a negotiating council will be formed in such cases.
• It also states that such contractual employees will get all statutory benefits on a par with the full-time employees for doing similar work.
• Termination of service of any worker at the end of the contract will not be considered as dismissal.
• It also proposes the setting up of a “re-skilling fund” for the purposes of training of employees that are part of any downsizing. They will also be paid 15 days’ wages from the fund within 45 days of their dismissal. 

Why is this bill the right step forward?

Not only does this bill offer a level of flexibility on government permissions for curtailing, perhaps the most important part is that it presents the legal framework contract workers throughout the country. At the moment, companies are supplied with contract workers through contractors. With the introduction of the idea of contract workers as fixed-time employees, the workers can directly be hired under a fixed-term contract, with the flexibility to modify the length of the contract based on the need of their industry. The workers will be treated as equals as regular workers throughout their tenure. The central law helps it reach all states and Union Territories.