Employing and terminating contractual staff will be easier

By eliminating third-party contractors, the new Labour Code (Industrial Relations Code 2019), will be more advantageous to the employers.


The Industrial Relations Code 2019, also called the Labour Code, will soon be introduced in the Parliament for approval. Once approved, it will be converted into a law, making it very easy for employers to hire and fire contractual employees without any hurdles from third-party contractors.

This new Code, aimed at simplifying the labour laws in the country, will be a mix of The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946 and The Industrial Disputes Act, 1947.

The objective of the Code is to ensure equal treatment for permanent and contractual employees. It is aimed at improving the working conditions for contractual workers.

This will also mean that an organisation will now not require different hiring policies for contractual and regular employees. Benefits, such as maternity leave and leave extension for new mothers will now be easier to manage. The new Code will also eliminate the need for third-party contractors because now it will be possible to hire contract workers directly for a fixed time period.

Depending on the job or position, the term of contract can be adjusted, which will make it easy for organisations to not only hire but also terminate employees. Also, there will be no intervention from contractors now.

The Code also suggests the setting up of a two-member tribunal to handle labour disputes. With the one-member team earlier, resolving disputes used to be a long-drawn and time-consuming affair, and employees used to often lose out on wages while attending these hearings.


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