Abolition of Labour Courts

The Code on Industrial Relations abolishes district labour courts and provides for a single industrial dispute tribunal in each State. Thus, the grievance and dispute redressal mechanism may prove to be cumbersome for workers. 

It also places a limit of three years for the resolution of disputes. Industrial establishments employing fewer than 50 workers or those engaged in “seasonal employment” or intermittent work will not be required to pay compensation for retrenchment. 

The decision of the government concerned shall be final should a dispute arise about whether the work was seasonal or not.

Laid-off workers will not get any compensation if they decline to accept alternative employment offered by the employer either in the same establishment or in an establishment that is located within a radius of eight kilometers. 

Before the closure of an establishment, the owner is required to give 60 days' notice to the government. But exemptions are allowed under certain circumstances, such as an accident or death of the employer or natural calamities. Besides, this notice period does not apply to establishments employing fewer than 50 workers.

If the government is satisfied that an establishment can fulfil any provision of the Code, it can by notification, exempt it from that provision. In the case of new establishments, if the government is convinced that it is in the public interest, the establishment can be exempted from any or all of the provisions of the Code.

The Code on Social Security amalgamates nine Central laws with the sole objective of facilitating the implementation and use of technology to enable ease of compliance for employers. There is nothing new suggested other than powers arrogated to the Central government to defer or reduce Provident Fund contributions by employers or employees for a period of three months in the eventuality of a pandemic, an epidemic or a natural disaster. 

The other achievement of this amalgamation is a proposal to create separate accounts under the social security fund for unorganised sector workers and gig and platform workers and a separate account for the amount collected as fines for violating the Codes.

The fixed term employee is the biggest evidence of the government's commitment to workers' welfare. The aim of labour reforms has also been to improve India's ranking in the World Bank's Ease of Doing Business ratings and boost investor confidence.