In the midst of its fight against Covid-19, Madhya Pradesh on Thursday announced a slew of reforms in labour laws to give employers more freedom to operate. These include changing contract labour conditions, allowing third party inspections, allowing workers to work up to 72 hours a week if they are willing and are paid overtime, and introducing compounding provisions to reduce industrial disputes.
Chief Minister Shivraj Singh Chouhan said the reforms would attract new industries, create jobs for youths, and the unemployed workers, by creating a positive atmosphere for investment. He said MP was the first state to usher in this revolution by amending laws that are within its ambit.
To bring other changes into effect the state has already sent, or is in the process of sending proposals, to the Centre that requires its approval.
More investment means more revenue
EXEMPTING factories and industrial units from adhering to multiple labour laws will help Madhya Pradesh attract more businesses to invest in the state. The proposed relaxations will help units hire more workers, increase work hours, and simultaneously keep inspectors at bay. Eventually, this will attract more investment, and help generate not just jobs, but also more tax revenues.
Registration and license for industries, shops and bidi manufacturers among others, will now be given in just one day against the existing provision of 30 days. The state has already notified changes in the Public Services Delivery Guarantee Act that will entail a fine on the authority responsible for registration and licencing these services. The applicant will receive the fine as compensation.
Factory license will henceforth be required to be renewed only once in ten years instead of annual renewal. Under the Contract Labour Act, the state will now give license for the entire duration of the contract rather than for a calendar year.
Contractors who employ less than 20 workers are not required to seek registration. The state has proposed to the Centre to increase the number of workers to 50 to give the contractors more freedom. Also, the registration will be granted online. It is sending a proposal to the Centre to make punishable offences under the Contract Labour Act compoundable.
Except the clause that deals with safety of workers, the MP government has given relaxations in all provisions of the Factory Act for the next three months. Chouhan said the state has done what was possible within its ambit, but it wants to extend similar relaxations for the next 1,000 days for which it has sent a proposal to the Centre.
Except Section 25 of the Industrial Disputes Act, the state has relaxed all other provisions to allow industry owners to select workers as per convenience. Industries employing less than 100 workers have been exempted from the provisions of the MP Industrial Employment (Permanent Order) Act.
Now MSMEs will be able to hire labourers as per their requirement to increase productivity. The Industrial Employment Act which was applicable to establishments with more than 50 workers will now be applicable if the number of workers is 100 or more.
At present, under the Factory Act, units running on power need registration if they employ 10 workers. The state has sent a proposal to the Centre to increase the number of workers to 50. The state has argued that it will give freedom to such units from the provisions of the Factory Act and they will be able to increase production to their full capacity. Also, industries not running on power are required to be registered if they employ 20 workers. The state has proposed to the Centre that the limit should be removed.
The state has already issued a notification allowing shops and establishment to remain open from 6 am to 12 pm arguing that on one hand it will create more jobs and on the other it will avoid crowding.
Citing the conditions created by COVID 19 pandemic, the state has allowed industries to increase workers’ shifts from eight to 12 hours. Employees will be able to work up to 72 hours a week if they are willing and are paid additional amount for putting in more hours.
Various labour laws require industries to maintain 61 registers and file 13 returns. Now they will have to maintain just one register and file one return, with self-certification being treated as sufficient.
Calling it a “complete end of inspector raj”, the CM said employers can now choose third party inspection for their industries because they often complained of harassment. Earlier third part inspectors could be registered only in Mumbai, but now they can register with MP Labour Commissioner.
Small and cottage industries employing less than 50 workers have been kept free from inspection. Henceforth, they could be inspected only with the permission of the labour commissioner and in the event of someone filing a complaint.
The state has issued a notification relaxing provisions of MP Industrial Relations Act till further orders. This will allow factory manager and the trade union to resolve disputes according to their convenience without going to the labour court.
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