News: Labour ministry to collate data on layoffs, pay cuts & present to PMO

Employee Relations

Labour ministry to collate data on layoffs, pay cuts & present to PMO

After releasing an advisory to employers asking them to not cut salaries or fire employees, the ministry will now collect and analyze data from all sectors to get a sense of the worst-affected sectors as well as workers impacted by the closure of establishments post the lockdown.
Labour ministry to collate data on layoffs, pay cuts & present to PMO

The Employees Provident Fund Organisation (EPFO) and Employees State Insurance Corporation (ESIC) will call up employees to collect details about their salary clearance, jobs. After collating data on job losses, salary cuts and delayed payment, a report will be presented to the Prime Minister’s Office (PMO).

After Prime Minister Narendra Modi’s repeated appeals to employers to be considerate to employees and ministry’s advisory to employers asking them to not cut salaries or fire employees, the government is now looking to further deep dive into the matter. 

According to the report, the exercise has already begun and particular attention will be paid on the last day of April and May 7 — as salaries are usually paid on a month’s last day or the 7th of the next month.

The target group for this exercise is fairly large as EPFO has 60 million subscribers, including pensioners, while ESIC has over 30 million subscribers. There is also some overlap between the two sets, how the two divisions look to manage work remains uncertain. What’s known is that Regional EPFO offices have been asked to reach out to subscribers via telephone calls.

Further the labour ministry, under the initiative of the Central Chief Labour Commissioner, has set up 20 call centres to record and resolve workers’ grievances related to salary cuts or job losses.

India has a workforce of nearly 500 million, of which over 10% or around 50 million, is in the organised sector. In its first relief package, the Centre had made a commitment of contributing for 3 months the mandatory 24% savings of some employees — those earning less than Rs 15,000 per month in firms where 90% of employees are getting salaries less than Rs 15,000. However, a large population of the workforce still remains out of this pool. 

As the COVID-19 outbreak and the subsequent lockdown stresses the economic situation and raises fears of widespread layoffs/salary reductions in India’s organized sector, the government's decision to collate the data and gain more clarity of the situation seems to be wise. After the phase one of lockdown itself some companies had started to announce layoffs and pay cuts. Now as the lockdown gets extended till the 3rd of May, a few others have made similar announcements or asked employees to go on leave without pay. Latest is Vistara, which has asked one third of its staff to go on leave without pay.

What actions would the government take after collating the data on layoffs and paycuts is to look forward to. Meanwhile, read how some of the other governments across the globe rmanaging the pandemic: How governments are responding to COVID-19

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Topics: Employee Relations, #COVID-19

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