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Parliament committee in support of pay cut-layoffs! Advice not to pressurize companies

New Delhi: A 40-day lockdown is in force in the country due to the Coronavirus. The lockdown period ends on 3 May. In this situation, there are reports of frequent layoffs or pay cuts of employees from across the country. However, Prime Minister Narendra Modi is repeatedly appealing to companies not to do so.

Now the Parliament’s committee on labor has also supported layoffs or pay cuts. According to news agency PTI, the committee suggested that companies with less than 300 employees should have the freedom of layoffs or closure. There is no need for government intervention. Trade unions have strongly opposed the committee’s suggestion.

What did the committee say?

Bhartuhari Mahtab, chairman of the Parliamentary Committee and Biju Janata Dal MP, has said that industries cannot be pressured to pay salaries for the lockdown period. The committee has recommended that special provisions related to retrenchment or closing of the company should be applicable to those industrial establishments which have 300 employees.

If the government accepts the recommendation of the committee of Parliament, then a company with less than 300 employees will have the freedom to retrench. Currently, these provisions apply to companies with 100 employees. 

No-fault of the employer in case of disaster

In the report, the committee has said that in the event of an earthquake, floods, cyclone, etc. many times the establishments have to be closed down for a long period. There is no fault of the employer in this. In such a situation, it would be inappropriate to ask employers to pay salaries. Bhartuhari Mahtab said that the industries have had to do the current closure due to the COVID-19 crisis. In such a situation, they cannot be pressured to give the employees the pay of the closed period, this is not right.

Small enterprises & NBFC will get help

Meanwhile, the Economic Advice Committee of the 15th Finance Commission has suggested helping small enterprises and non-banking financial companies (NBFCs). The committee has said that it can save them from bankruptcy. All members of the committee were unanimous that the estimates of real GDP growth made before March 2020 need to be revisited and substantially reduced.