Govt. Seeks comments on draft industrial relations code rules

Govt. seeks comments on draft Industrial Relations Code rules

The Union Labour and Employment Ministry published the draft rules framed under the Industrial Relations Code, 2020, that would require firms with 300 or more workers to seek government approval for lay-offs 15 days prior to the intended action.

Key Highlights of the Draft Rules:

1. Firms with 300 or more workers are required to seek approval from the government before 15-day notice for lay-offs, 60-day notice for retrenchment, and 90-day notice for closure.
2. The rules propose electronic methods for most communication including maintenance of an electronic register for standing orders for all industrial establishments among others.
3. The notice of strike has to be signed by the secretary and five elected representatives of the registered trade union and given to the employer, with a copy sent to the Chief Labour Commissioner (Central) electronically or otherwise.
4. The rules also proposed establishing a re-skilling fund for retrenched workers. Employers would have to electronically transfer an amount equal to 15 days of the last drawn wages of the retrenched workers or workers into an account maintained by the government within 10 days of the retrenchment.

Key Issues and Analysis

1. The Code prohibits strikes or lock-outs in any establishment unless a prior notice of 14 days is provided. Similar provisions existed in the Industrial Disputes Act, 1947 for public utility services (such as, railways and airlines). The Code expands these provisions to apply to all industrial establishments.
2. The Code permits the government to defer, reject or modify awards passed by Industrial Tribunals and the National Industrial Tribunal. A similar provision in the Industrial Disputes Act, 1947 was struck down by the Madras High Court in 2011, as it violated the principle of separation of powers by allowing the government to change the decision of a Tribunal through executive action.
3. The Code requires the employer of establishments with at least 100 workers to obtain permission from the appropriate government prior to the retrenchment of a worker. The government may increase or decrease this threshold through a notification.