Nasscom Feedback on The Industrial Relations Code, 2019

The Industrial Relations Code, 2019 which seeks to replace The Industrial Disputes Act, 1947, The Trade Unions Act, 1926 and The Industrial Employment (Standing Orders) Act, 1946 was introduced in Lok Sabha by the Minister of Labour and Employment, Mr. Santosh Kumar Gangwar, on November 28, 2019. Subsequently, on 23rd December 2019, the bill was referred to the Standing Committee on Labour, chaired by Shri Bhatruhari Mahtab, MP.

NASSCOM, based on the inputs that it received from members, submitted its comment on the provisions of the bill including some suggestions for change. Some of the key suggestions that were part of the submission are listed below.

  • Exempt IT-ITES sector from the requirements related to Standing Order: The provisions related to Standing orders are designed based on the working condition of employees in the traditional industrial sectors (Manufacturing / Construction) and are not in line with the manner the technology sector in India operates. Considering the difficulties involved on operationalising these provisions, we suggested exempting the IT-ITeS sector from the applicability of chapter covering Standing orders.
  • Penalty should be monetary, not imprisonment: The penalties for non-compliance with the law, as laid out in Chapter XII of the bill, includes imprisonment in certain cases. For example, second instance of violation of section 79, which provides the conditions and procedure to be followed for retrenchment, is punishable with fine or imprisonment (of upto 6 months) or both. So, any procedural lapse on meeting any of these requirements can lead to imprisonment. Considering that the offence quoted in the above example (and the others listed in the Act) are borne out of actions that are performed in the course of management of business, we therefore suggested that the penalty should only be in monetary terms.
  • Amend definition of “Worker”: As per clause 4, of section 2 (zm), the definition of worker excludes any person employed in the industry, “who is employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month”. While the roles and responsibilities should continue to be a determining factor, the wages drawn by an employee should also be taken into consideration for the purpose of determining whether the individual is a ‘worker’ or not. Therefore, we have suggested that a wage threshold should be considered, beyond which, employees drawing a higher wage should not be categorized as ‘workers’ for the purposes of the Code.
  • Amend definition of “settlement”: The definition of settlement in section 2(zd) mandates that the settlement arrived at between the employer and worker should be sent to an officer authorised in this behalf by the appropriate Government and to the conciliation officer. Since settlement terms may contains certain sensitive information, this may impinge on the privacy of the parties concerned. Therefore, we have suggested that the requirement of sharing the details of the settlement may be done away with.
  • Amend definition of “layoff”: The definition of ‘layoff in section 2(q) does not consider, situations that may arise on account of business downturn. We have therefore suggested that that the definition of ‘lay-off’ be amended to include “lack of demand or viable business” as an additional ground warranting lay-off situation.
  • Worker Re-skilling Fund: As per section 83, the retrenched worker will receive fifteen days wages last drawn, for the purpose of reskilling him/herself. However, there is no procedure has been proposed to verify or ensure that this amount is used by the retrenched worker is for reskilling. So, practically, the worker can use this payment for any purpose. So, the payment provided under section 83, for all practical purpose would end up being another form of compensation, defeating the intent of the provision which is to support reskilling. Therefore, we recommended deletion of this clause.

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