In the proposed labour reforms to ease the closure of factories in the state, the government has proposed that factories would not require prior permission if they paid the proposed compensation to retrenched workers. According to officials from the labour department, any factory having more than 100 employees requires government permission for closure. Now, it has proposed to increase that number to 300 in the Industrial Disputes Act. Besides, it has proposed to include a provision stating that prior permission of the government would not be required if the factories pay compensation of 60 days’ average pay for every completed year of continuous services. Currently, there is no such provision.
It has also proposed to add a new section in the Act for raising any dispute related to retrenchment or dismissal from service within three years only. At present, there is no such bar. A dispute can be raised at any time. While it has proposed to increase the compensation for retrenched workers by three times, the compensation for labourers at the time of closure has been doubled.
These reforms have been proposed as a part of ease of doing business on the lines of the Central Model Act circulated by the Union government and considering the amendments made by the Rajasthan government. Officials from the labour department said it meant all factories in the state would not require permission for closure if they abode by the compensation clause. “We have proposed to include a provision, of applying closure and retrenchment permission from government, to safeguard the interests of the labourers to prevent any misuse by factories, to maintain industrial peace or any other issues,” said Rajesh Kumar, Principal Secretary, Labour.
According to the labour department, there are a total of 37,234 registered factories with 25.16 lakh employees in the state. Of these, 32,443 factories employ less that 100 labourers, and together have a total of 7.95 lakh employees. There are 3,426 factories that employ between 100 and 300 labourers and have 5.84 employees in total. As many as 1,365 factories employ more than 300 labourers and have a total of 11.37 lakh employees.
Another official from the labour department said they had attempted to balance out the provisions in the interest of factories and labourers. “As per the proposed amendment, no factories in the state would require our permission for closure. By increasing compensation for labourers at the time of retrenchment and closure, we are trying to give more benefits to them as well,” said an official.
However, the labour unions attached to the Shiv Sena and the Rashtriya Swayamsevak Sangh have opposed these reforms saying it would further lead to labour exploitation and create more insecurity among the labourers. The Sena has also demanded that a meeting of labour unions be called before taking any decision on this.