22/11/2019 - Government Policies | Mainstorming

IAS Parliament 5 years

KEY POINTS

Importance of the Bill

· The most important aspect of the Bill is that it presents the legal framework for ushering in the concept of ‘fixed-term employment’ through contract workers on a pan-India basis.

· With the introduction of fixed-term employment, companies will be able to hire workers directly under a fixed-term contract, with the flexibility to tweak the length of the contract based on the seasonality of industry.

· These workers will be treated on a par with regular workers during the tenure of the contract.

· The move to include it in a central law will help in wider reach, and states are expected to follow similar applicability. The Bill now ensures a pan-India impact of this move.

Changes in the Bill

· The rigidity of labour laws about laying off labour has often been cited by industry as the main reason limiting scalability and employment generation.

· The provision of fixed-term employment, which helps in the flow of social security benefits to all workers along with making it easier for companies to hire and fire, in The Industrial Relations Code Bill.

Opposition to the Bill

· While industry has welcomed the changes, others have said that the unclear provision regarding retrenchment would lead to uncertainty, and discretionary behaviour during implementation by the central or state government.

· Also, fixed-term employment needs to be introduced with adequate safeguards, otherwise it runs the risk of encouraging conversion of permanent employment into fixed-term employment.