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Labour code provisions will not promote hiring and firing:Clarifies Govt.

The labour Ministry clarified on 28th Sep. that the new labour codes provisions are aimed at expanding labour welfare measures not only to existing beneficiaries but also to over 40 crore more workers in the unorganised sector and not hiring and firing kind of things.

 “The criticisms being aired are misfounded,” the labour ministry said in a statement issued . Clarifying the government’s stand on raising the employee limit of smaller units for closure to 300, the ministry said there has been no empirical evidence to suggest that a higher threshold promotes hire and fire.

Pointing out to the observations in the Economic Survey 2019, the ministry said one of the inhibiting factors in creation of employment was observed to be the threshold of 100 workers under the Industrial Disputes Act, 1947. “It was observed that the threshold under labour legislation creates perverse incentive to remain small,” it said.

Citing the example of Rajasthan which had raised the threshold to 300 way back in 2014, the ministry said the average number of factories in Rajasthan having more than 100 increased significantly as compared to the rest of India. “The total output in those factories also increased,” it said, adding that so far 15 more states have already enhanced the threshold to 300 workers.

Refuting rumours that fixed term employment introduces hire and fire, the ministry said that fixed-term employment has already been notified by the central government and 14 other states.

“Fixed-term employment is pro-worker. It would be possible for an employer to enter into a fixed term contract directly with the worker or the employee rather than going through a contractor,” it said, adding it will lower the transaction cost per worker besides ensuring all benefits including minimum wages and other social security benefits are passed to the workers.

Clarifying on the definition of inter-state migrant worker in the erstwhile Inter-State Migrant Worker Act, 1979, subsumed in the Code on Occupational Safety, Health and Working Conditions, the ministry said the earlier definition was very restrictive.

“The OSH Code expands the definition of migrant worker to include those workers who would be directly employed by the employer besides by contractor,” it said, adding a provision has also been made for self declaration by a worker in the destination state.