The Labour and Employment Ministry today said the Parliamentary Standing Committee on Labour had given its consent for Industrial Relations Code provision to retrench, layoff or close a unit, without government permission, for institutions with 300 employees, in place of earlier limit of 100 workers. Defending the three new Labour Codes passed by Parliament in its Monsoon Session, the Ministry said, “there has been no empirical evidence to suggest that higher threshold promotes hire and fire.”

It was only the aspect of prior permission of the appropriate government, which was removed in the Code, while other benefits and workers’ rights were kept intact, it said.

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The workers’ rights such as notice before retrenchment, compensation at the rate of 15 days wages per completed year of service and pay in lieu of notice period were not compromised in the new law, the Ministry said.

The IR Code envisages an additional monetary benefit equivalent to 15 days of wages from a newly created Reskilling Fund.

The Ministry said the Economic Survey, 2019 had analysed the “pain of dwarfism prevalent in Indian firms.” Dwarfism refers to firms which are surviving for more than 10 years but their growth in terms of employment is stunted. One of the inhibiting factors in creation of employment was observed to be the threshold of 100 workers under the Industrial Disputes Act, 1947.

Rajasthan in 2014 had increased the threshold from 100 to 300 workers.

Rajasthan’s example was followed by Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, HP, Jharkhand, Karnataka, MP, Meghalaya and Odisha. Refuting rumours that Fixed Term Employment (FTE) introduces hire and fire, the Ministry said FTE was already notified by the Centre and 14 other states.

The definition of interstate migrant worker was restrictive in Inter-State Migrant Worker Act, 1979. The Occupational Safety and Health Code expands the definition of migrant worker to include those workers who would be directly employed. A migrant who comes on his own in destination-state, can declare himself a migrant worker by registering on electronic portal on the basis of self-declaration seeded with Aadhaar.