Kerala: Union Leader Condemns Mass Layoffs at Medical Coding Firm, Cites New Labour Codes
The Centre for Indian Trade Unions (CITU) has strongly condemned the reported mass termination of nearly 800 employees by CorroHealth Infotech Private Limited across its centres in Kerala. CITU state secretary and former Labour Minister V. Sivankutty alleged that the U.S.-based medical coding firm is exploiting the Centre's new Labour Codes to undermine workers' rights.
Speaking at a press conference in Thiruvananthapuram on Sunday, Mr. Sivankutty noted that under the previous legal framework, establishments employing 100 or more workers were required to obtain prior government permission before closure, retrenchment or layoffs. However, the new Industrial Relations Code has increased the threshold to 300 employees, thereby weakening job security. He claimed that the developments at CorroHealth have exposed the consequences of this policy shift.
Mr. Sivankutty criticised the manner in which the company allegedly dealt with employees who had protested against severe labour exploitation. He warned that CITU would launch strong agitations against such practices, which he said have taken place in IT and IT-enabled service companies in Thiruvananthapuram, Kochi and Kozhikode. He pointed out that the absence of strong trade union movements in IT and allied sectors has enabled managements to implement anti-worker decisions without effective resistance.
He also highlighted that since the Centre's Labour Codes have not yet been implemented in Kerala, workers continue to enjoy the protection of the Industrial Disputes Act, 1947. Under that law, establishments employing 100 or more workers cannot undertake layoffs, retrenchment or closure without obtaining prior approval from the government. Mr. Sivankutty asserted that CITU will pursue all available legal remedies, including raising the matter as an industrial dispute before the Labour Commissioner and the Labour Courts.
The former Minister urged the State government to immediately act on the recommendations submitted by the expert committee headed by former Supreme Court judge V. Gopala Gowda, which studied the implications of the Labour Codes. According to Mr. Sivankutty, the committee found the Labour Codes to run contrary to constitutional principles of social and economic justice and to weaken labour rights.
He added that the panel had clarified that the Codes merely prescribe minimum standards and do not prevent states from introducing more beneficial provisions for workers. The report recommends that states can enact laws requiring prior government approval for layoffs and retrenchment even in establishments employing as few as 50 workers, despite the central legislation increasing the threshold to 300 employees. It also calls for expanding the legal definition of workers to prevent exploitation, revising wage-related provisions, amending various sections of the Labour Codes, and introducing state-specific legislation aimed at strengthening labour rights.
Since labour falls within the Concurrent List of the Constitution, Mr. Sivankutty said state governments possess the legislative authority to safeguard workers by framing laws and regulations that provide stronger protections than those guaranteed under the central legislation.
