Retrenchments in Kerala: Labour codes and its rules | Explained
The Kerala state government is navigating the implementation of new central labor codes which mandate specific procedures for worker retrenchment. A key provision includes the establishment of a dedicated re-skilling fund to assist displaced employees in transitioning to new roles.
Under Chapter XI of the new Labor Code, the appropriate government is required to establish a worker re-skilling fund. This initiative is designed to provide a financial safety net and skill development opportunities for workers who have been retrenched from their positions.
Employers are legally obligated to contribute to this fund whenever a retrenchment occurs. The contribution amount is specified as the equivalent of 15 days of wages, based on the last drawn salary of the employee immediately prior to their termination.
These rules aim to modernize industrial relations in Kerala by balancing employer flexibility with social security requirements. The implementation process involves coordinating state-level rules with the overarching federal framework to ensure legal consistency across sectors.
Source: Chapter XI of the Code provides that the appropriate Government shall set up a worker re-skilling fund, and the employer must contribute to the fund an amount equal to 15 days’ wages last drawn by the worker immediately before the retrenchment.
