Since the release of the report of 2nd National Commission on Labour in 2002, there has been a major apprehension regarding its philosophy among scholars, political parties and general public alike. There has been a general apprehension that this report espouses a philosophy of ‘hire and fire’ and in doing so, it compromises the aspect of labour welfare. In the present paper, we have attempted to understand and analyse the real philosophy espoused by this report and in doing so, provide a proper evaluation of this report. In analysing the report, we have tried to understand whether there was an actual need for having a reform in Indian labour regulation regime and if at all reform was a necessity, whether the present scheme of reform has addressed such needs or not. Finally, by such analysis of the scheme of reform, we have attempted to answer the question as to whether such reform scheme is indeed a compromise with labour welfare.