Deshmukh soft-pedals labour reforms

After hearing the views of leading industrialists Rahul Bajaj and Mukesh Ambani, Deshmukh set up a three-member committee comprising Labour Minister Hussain Dalwai, Industries Minister Patangrao Kadam and Finance Minister Patangrao Kadam to hold talks with labour leaders on proposed amendments in labour laws.

The contention of the industrialists was labour laws should be amended since they have become outdated and counterproductive. They particularly emphasised on abolition of the Contract Labour (Prevention and Abolition) Act as well as relaxation in the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act.

The industries department, which subscribes to the same views, had also proposed drastic changes in the Contract Labour (Regulation and Abolition) Act, Minimum Wages act, Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, Factories Act and the Bombay Shops and Establishments Act.

But the Labour Department has taken the view that since the Centre itself is considering major amendments to labour legislations, the state government should not take any step in haste. “Except the Bombay Industrial Relations Act, all legislations are enacted by the Centre. Any amendment to these acts will be against the Constitution. We should wait for the recommendations of the National Labour Commission, whose report is expected any day,” a senior official of the labour department said.

Regarding the need for reforms, an official of the industries department said since the government has discontinued sales tax incentives, relative advantage to backward areas has reduced significantly. Also, since budgetary provisions for other fiscal incentives have been grossly inadequate, it is necessary to consider non-financial incentives for industries, he said.

Changes proposed in the laws include curbing visits of inspectors and exempting units in backward areas from the provisions of the Contract Labour (Regulation and Abolition) Act. “It has been proposed to reduce coverage of the act by an increase in minimum number of workers (permitted) from 20 to 50 or 100 in developed and backward areas,” an official said, adding the labour department has opposed the proposal, saying such a step would increase exploitation.

Regarding the Factories act, the industries department has proposed that the limits be relaxed to 25 workers (for units with power) and 50 workers (for those without) compared to the existing provision of 10 and 20 and that the period of license under the act should be increased to 10 years, which has been agreed to by the labour department.

On the Trade Unions Act, the industries department has proposed that for registration of a trade union, atleast 30 per cent of the members should belong to that industrial unit. No registration should be granted to a union where the labour force is less than 25 and that no registered union should have more than one third or two (whichever is less) office bearers from outside, it has said.

On the Industrial Disputes Act, the industries department has proposed that for backward areas, the clause on retrenchment should be relaxed. At the moment, for less than 100 workers, permission from the government is not required. Now it has been proposed that the limit should be enhanced to 300.

A labour department official said if all the recommendations of the industries department are accepted, then the government would have to wind up the labour department.