Amid the BJP-led Central government talking about reviewing ‘outdated’ labour laws, a committee, under the ministry of labour, has called a meeting on May 28 to “examine all aspects of labour laws affecting micro and small enterprises”.
The key agenda item for the meeting is to relax labour laws for small scale units.
A senior official told The Indian Express that given the new government’s intention to make India a hub for cost-competitive, labour-intensive mass manufacturing, the timing of the meeting is significant.
“An order has already been sent to all the concerned stakeholders including employees’ organisations, employers’ organisations, state governments, DIPP, MSME, and women and child development department, among others. The meeting is on examining all aspects of labour laws affecting micro and small enterprises,” the official said.
“The committee will consider how to amend the definition of factory in small scale industry,” the official added.
The committee has representations from all the concerned stakeholders. It would also discuss issues ranging from multiplicity and complexities of labour laws, rationalisation of inspections to difficulty in affecting changes in service conditions and maintenance of records.
Amendments in the labour laws have also been sought by the ministry of commerce and industry to promote manufacturing in India under the national manufacturing policy. The meeting would also see discussion on labour law flexibilities sought by the ministry including employment of women in three shifts, temporary status of employees; flexibility to downsize; number of hours per shift; social security scheme for the work force among others.
“The DIPP is already engaged with the labour ministry on amending section 25 FFF(1A) of the Industrial Dispute Act. The DIPP has said that the section should be extended to the manufacturing sector as well,” the official said.
The section applies only to mining operations, saying if a mining undertaking closes down due to exhaustion of the minerals in the area, no workman shall be entitled to any notice or compensation if the employer provides him/her with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive and same terms and conditions.
As Gujarat’s chief minister, Narendra Modi, who will take oath as Prime Minister of the country on Monday, undertook a series of steps to make its labour laws flexible.
The state amended the Industrial Disputes Act in 2004 to allow greater flexibility in the labour market for Special Economic Zones. It also allowed the firms within SEZs to lay off workers, without government approval by giving a one-month notice to the worker.
By implementing such reforms, according to US investment bank Goldman Sachs, Gujarat experienced a 60 per cent growth in manufacturing employment between 2000 and 2012. The report, published in March, also said that India can add 40 million jobs in the next decade if states follow flexible laws such as in Gujarat.