The layoff of around 800 employees at the Kochi and Kozhikode centres of US-based healthcare analytics firm CorroHealth has escalated into a political confrontation between the Kerala government and the Centre, with the dispute centring on the applicability of India's new labour codes.
According to Deccan Herald, the ruling CPI(M) has criticised the BJP-led Central government over the labour codes, while Kerala's Congress government has rejected the company's claim that the layoffs were carried out under the provisions of the new legislation.
The employees received termination notices on Friday, triggering protests, political intervention and renewed scrutiny of labour law implementation in the state.
Kerala rejects company's labour code defence
CorroHealth has maintained that the workforce reduction was carried out in accordance with the provisions of the new labour code.
The Kerala government, however, disputes this position.
State Labour Minister Bindu Krishna said the new labour codes have not been implemented in Kerala. According to the state government's interpretation, layoff-related matters continue to be governed by the Industrial Disputes Act, 1947.
The minister also said the government would strongly protect the interests of affected workers.
Political pressure mounts
The layoffs have drawn sharp political reactions across party lines. According to Deccan Herald:
- Leader of the Opposition Pinarayi Vijayan wrote to Chief Minister V D Satheesan, urging the government to revoke the terminations and refrain from implementing the new labour codes in the state.
- Congress MP Hibi Eden said he would raise the matter with the Central government.
- CPI(M) Rajya Sabha MP A A Rahim described the layoffs as an example of what he called the adverse impact of the labour codes introduced in 2020.
The issue has evolved from a corporate restructuring into a broader debate over labour reforms and workers' rights.
Tensions rise outside company offices
The dispute intensified on Monday after employees reported they were initially denied entry to CorroHealth's offices despite an understanding reached with the state government to maintain the status quo until talks scheduled later in the week.
Trade unions affiliated with the Left and Congress parties staged protests outside the company's offices. According to Deccan Herald, employees were subsequently allowed to enter the premises.
The developments came despite ongoing discussions between the company, employees and the state government.
Questions raised over compliance
The company has defended the layoffs by citing provisions under the new labour code.
However, according to Deccan Herald, critics have questioned whether key statutory requirements were followed. The issues raised include:
- Whether government approval was required for layoffs involving more than 300 employees.
- Whether employees should have received one month's prior notice.
- Whether provisions relating to compensation equivalent to 15 days' wages for every completed year of service were followed.
- Whether a reskilling fund for affected employees was constituted.
The state government's position remains that these provisions are not applicable because the new labour codes have not yet come into force in Kerala.
Labour law debate returns to the spotlight
The CorroHealth layoffs have revived a wider discussion on the implementation of India's labour reforms and the extent of state powers over employment regulation.
While the company maintains its actions comply with the new labour framework, Kerala continues to rely on the Industrial Disputes Act, creating a legal and political disagreement over which provisions govern large-scale layoffs in the state.
With talks between the company, employees and the state government expected to continue, the outcome could influence how similar workforce reductions are handled in states where the new labour codes are yet to be implemented.