Employees of the U.S.-based CorroHealth Infotech Private Limited, who were terminated without prior notice, were waiting at the entrance of the company office in Kochi on the morning of July 7, 2026.
| Photo Credit: H. Vibhu
The story so far:
U.S. technology firm CorroHealth Infotech Private Limited retrenched about 800 employees from its Kochi and Kozhikode centres. While the company cited operational losses for the decision, both the Government of Kerala and the Opposition in the State said the move was illegal. Kerala Labour Minister Bindu Krishna said she will raise the matter with Union Labour Minister Mansukh Mandaviya on Monday (July 13, 2026).
While the Union Government is tight-lipped about the matter, senior officials have been arguing that had Kerala implemented the four Labour Codes, the workers would have received a better deal. Senior Congress MP K.C. Venugopal and former Kerala Labour Minister and CPI(M) leader V. Sivan Kutti blamed the implementation of the Labour Codes for such unilateral retrenchments.
The provisions in Labour Code
The Industrial Disputes Act of 1947, the Trade Unions Act of 1926 and the Industrial Employment (Standing Orders) Act of 1946 are merged into the Code on Industrial Relations. It defines retrenchment as the termination by the employer of the service of a worker for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. It does not include retirement or termination of the service of the worker as a result of the non-renewal of the contract or after ending fixed term of employment.
Chapter IX of the Industrial Relations Code lays down the conditions for lay-off, retrenchment and closure in establishments. It has provisions for conditions precedent to retrenchment of workers, procedure for retrenchment, reemployment of retrenched workers, and compensation to workers in case of transfer of establishment. It says that no worker shall be retrenched until the worker has been given one month’s notice in writing indicating the reasons for retrenchment, compensation equivalent to fifteen days’ average pay for every completed year of continuous service and a notice to the appropriate authority on retrenchment.
Provisions in Rules
The Rules of the Industrial Relations Code, published recently, mandate that the employer shall serve prior notice of retrenchment in Form-XIII to the Central Government and to the concerned Deputy Chief Labour Commissioner (Central) through e-mail or speed post on the retrenchment. “An application shall be made in Form XIV by the employer to the Central Government electronically, stating clearly the reasons for the intended retrenchment therein and a copy of such application shall be sent to the concerned workers electronically, or in person, or by speed post,” the Rule says.
Worker Skilling Fund
Chapter XI of the Code provides that the appropriate Government shall set up a worker re-skilling fund. The employer must contribute to the fund an amount equal to 15 days’ wages last drawn by the worker immediately before the retrenchment. “The fund shall be utilised by crediting fifteen days’ wages last drawn by the worker to his account who is retrenched within forty-five days of such retrenchment, in such manner as may be prescribed,” the Code adds.
The Rule also provides that every employer who has retrenched a worker in an industrial establishment shall, within ten days from the date of such retrenchment, electronically transfer an amount equivalent to fifteen days of the last drawn wages of such retrenched worker or workers to the fund. It shall be displayed on the website of the Ministry of Labour and Employment.
Kerala Situation
Although the Kerala Government pre-published the draft Rules for all four Codes, it decided to suspend them following opposition from trade unions. The then Pinarayi Vijayan Government constituted an expert committee headed by retired Supreme Court Judge V. Gopal Gowda on January 22, 2026, to study the four Labour Codes.
The panel submitted its report in March 5, 2026 and said that the Labour Codes are “an active and conscious departure” from the foundational principles of the Constitution. The report said that by enacting the Codes, the State, instead of acting as a guarantor of workers’ rights, has openly aligned itself with the interests of the corporate and employer class. The Committee said the State government is empowered to amend the Labour Codes to protect the rights of workers.
After the election, the newly formed UDF Government made it clear that the State will hold wider consultations before taking a call on implementing the Labour Codes. Labour Minister Bindu Krishna said in the Assembly that the State government had not yet finalised its position on framing rules under the Labour Codes and would first undertake a detailed examination of the recommendations submitted by the Justice Gowda committee.
Trade Unions on retrenchments
The trade Unions argue that in Kerala, as the draft Rules of the Codes were suspended, the Codes or their Rules will not be applicable. “Here in Kerala, the existing law is the Industrial Disputes Act and the State rules on this Act and the other Acts which were displaced by the Codes. Labour is a concurrent subject,” said President of Trade Union Centre of India Fredy K. Thazhath.
“The State is yet to adopt the Labour Codes and their Rules due to objections from the working class represented by the trade unions, including the Bharatiya Mazdoor Sangh of the Sangh Parivar. In this particular case of retrenchments, too, the existing State laws will prevail. In either case, an employer cannot fire 800 workers on its own without the permission of the government. That is illegal. It is a question of the legality of the entire process. The Union Government, however, is overlooking this question of illegality and conniving with the foreign corporations,” Mr. Thazhath said.
Published – July 13, 2026 09:22 am IST
