Features of the Draft Labour Code on Industrial Relations Bill, 2015 while throwing light on various concerns raised by the Trade Unions.

The proposed Labour draft code seeks to replace the three laws viz. Trade Unions Act, 1926; Industrial Employment Act, 1946 and the Industrial Disputes Act, 1947.Key Provisions of the Draft Bill are as follows:

  • The draft bill will increase the employee limit from 100 to 300 above which, the government approval is needed for layoff/retrenchment/closure.
  • The draft code provides that 10 per cent of workers shall apply (be applicant) for registering a trade union.
  • For employers employing less than 50 employees, the requirement to provide a minimum of 1 months’ notice and retrenchment compensation (severance) is to be removed.
  • The draft code raises the retrenchment/closure compensation payable to workers from 15 days wages to 45 days wages for every completed year of service.
  • It also prohibits a person holding office in more than 10 unions.
  • The registration of a trade union may be cancelled if it fails to hold bi-annual elections and fails to submit annual returns.

Though the draft bill aims to create greater labour market flexibility and discipline in labour, it is criticised on various fronts. Trade unions argue that the draft code has been prepared keeping in mind only employer because the limit of more than 300 employees to get permission from government for layoff will reduce the accountability of employers and will lead to arbitrary closures and en masse termination. Further, the mandate of registration in a trade union to become office-bearer is against the standards contained in the ILO Convention.


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