The Union government on Monday defended its decision to ease retrenchment norms for companies in the labour codes approved by the Parliament, saying the existing provisions in the law for seeking government’s permission was unnecessary.
The government further defended its move to introduce fixed-term employment, insisting that the present system of hiring workers through contractors is exploitative.
The Industrial Relations Code, 2020 has allowed companies with up to 300 workers to retrench and lay off staff, or shut shop without seeking official permission. Earlier this rule was applicable only to units with 100 ore less workers.
“There has been no empirical evidence to suggest that higher threshold promotes hire and fire… requirement of permission before retrenchment or closure does not serve much purpose but at the same time leads to accumulation of losses and liabilities of the firm on the verge of closure,” the Union labour and employment ministry said in a statement on Monday.
Source: Business Standard
