This Bill will decide how India Inc hires and fires

Sitharaman said the Bill has proposed giving a legal framework for fixed-term employment through which contract workers serving a fixed-tenure will get equal statutory social security benefits as regular workers in the same unit.

The Centre on Wednesday approved the Code on Industrial Relations (IR) Bill, 2019 - considered to be the most contentious labour law amendments.

The central government has withdrawn its proposal to give flexibility to big companies, in terms of manpower, to retrench or lay off workers and shut shop without seeking official consent, a government official said, requesting anonymity.

As a result, another proposal to increase the compensation for retrenched or laid off workers is also not a part of the Bill.

However, instead of going for a change in the central law, there are provisions in the Bill which safeguards the amendments brought in by various state governments, giving flexibility to companies to “hire and fire” workers - a move that may be cheered by the industry.

To further help industries in hiring contract workers directly, the government has proposed to introduce the concept of fixed-term employment in the labour laws.

Sitharaman said the Bill has proposed giving a legal framework for fixed-term employment through which contract workers serving a fixed-tenure will get equal statutory social security benefits as regular workers in the same unit.

Under the present system, firms resort to hiring contract workers through contractors and they argue that it’s a resourceful exercise.

Through the fixed-term employment system, companies will be able to hire contract workers directly.

“All workers, under a fixed-term contract, will be taken up on depending upon seasonality of industry but will be treated on a par with regular workers.

"This is the biggest feature (of this labour law amendment),” Sitharaman said.

She was quick to add that labour and employment minister Santosh Kumar Gangwar “spent a lot of time in consultation” with the trade unions and other stakeholders - pointing to the difficulties the government had in approving the labour code which was first proposed in its previous tenure in April 2015.

Without divulging further details about the Bill, the finance minister said that the “state governments can take it (the proposed law) further.”

The code will be introduced in the ongoing winter session of the Parliament.

Photograph: Manvender Vashist/PTI Photo