New Delhi: The Ministry of Labour and Employment on Monday allayed apprehensions about the Labour Codes passed last week by Parliament, saying the "criticisms being aired are misfounded".
The ministry in a statement termed the bills as historical game-changer reform bills. "The criticisms being aired are misfounded", it asserted.
In a pointed clarification on raising employee limit of smaller units for closure to 300, the ministry has underlined that the department-related Parliamentary Standing Committee had also recommended an increase in threshold from 100 workers to 300 workers for seeking prior permission for retrenchment, lay-off and closure.
It is only the aspect of prior permission of the appropriate government which has been removed and other benefits and workers' rights have been kept intact, it added.
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 has not been compromised.
Further, the IR (industrial relations) Code envisages an additional monetary benefit equivalent to 15 days of wages under the newly created Reskilling Fund.
There has been no empirical evidence to suggest that higher threshold promotes hire and fire, it said, adding that the Economic Survey, 2019 has analysed about 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.
It was observed that threshold under labour legislation creates perverse incentive to remain small, it added.
The ministry explained that fixed-term employment has already been notified by Central government and 14 other states.
The ministry has dubbed apprehensions regarding 14 day notice period (for strike) as totally misfounded.
It has said that it only adds an opportunity for resolving the labour grievance before going on strike.
Talking about the definition of Inter-State Migrant worker, the Inter-State Migrant Worker Act, 1979 has been subsumed in OSH (occupational safety health) Code.
The various provisions of the erstwhile Act have been further strengthened in the OSH Code.