The New Code on Industrial Relations (2019) was brought to reduce labour disputes and improve ease of doing business but it has restricted the collective bargaining power of the workers. Analyse.

Code on Industrial Relations (2019) was brought to incorporate various laws on labour unions and employee-employer relationship to provide a single comprehensive code.

Code on Industrial Relations reduced labour dispute as well as increased ease of doing business through:

  • Implementation of uniformity in labour laws.
  • Defining fixed term employment and associated concerns.
  • Delineating social security benefits to workers.
  • Recognising trade unions with 25% of support and prevent the regular disruption.
  • Recognise strike with support of more than 75% workers.
  • Form negotiating team and intervention by government in minor disputes.
  • Reskilling fund and wage security in case of retrenchment (15 day wage to be given).
  • Provide window of negotiation and proper code to clause-by-clause discussion on issue-specific-concerns of industry.

However, critiques argue that it has restricted the collective bargaining power of workers.

Their argument is based on following facts:

  • Act reduces scope of trade union formation by raising the amount of support required for recognition.
  • Fixed term employment clause may lead to contractual workers.
  • Strike and disruption have been avoided which reduces the bargaining power of the workers.
  • Affect the voice of workers and bring them in conflict with legislations.
  • May lead to an era of pre-1920 when labour exploitation was vehemently done and trade unions were ineffective due to legal loopholes.

Code on Industrial Relations has been a right step in rationalizing the numerous laws but it fails to incorporate labour concerns. Wider consultations and specific concerns need to be deliberated to prevent any unforeseen situation.


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