Firms
with 300 workers need no govt nod to sack
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SOMESH JHA
New Delhi, 8 November
Paving the way for the first set of labour reforms in
the country, President Pranab Mukherjee has given his assent to Rajasthan’s
amendments to three laws. Among major changes, the Industrial Disputes Act
will allow companies employing up to 300 staffers to lay off workers or close
down without taking the government’s prior approval. Earlier, those with up
to 100 employees were allowed to do so.
“The government of Rajasthan received assent papers
on November 7on three labour law amendment Bills relating to the Industrial
Disputes Act, 1947, the Contract Labour Act, 1970 and the Factories Act,
1947,” Rajat Mishra, Rajasthan’ labour secretary,
told Business Standard.
Mishra said these amendments were aimed at creating
employment opportunities through greater investments and at easing the
conduct of business in the state.
The Rajasthan Assembly had three months ago passed
Bills amending the three laws, as well as the Apprenticeship Act. Since these
laws fall under the Constitution’s concurrent list, where both the Centre and
states can legislate with the central law prevailing in case of a difference,
they needed the President’s assent before becoming law.
“This will go a long way in providing relief to
industry, especially smallscale industry. We hope the ambit of such reforms
will be expanded in the near future. This will also play a major role in
setting the direction for labour reforms,” said Chandrajit Banerjee,
director- general of the Confederation of Indian Industry ( CII). Industry
chambers have demanded similar changes at the Centre as well.
Other states are expected to follow Rajasthan, with
the Union Labour Minister Narendra Singh Tomar signalling states can amend
labour laws to suit local conditions. Madhya Pradesh’s Cabinet has approved
amendments on similar lines.
The steps taken by Rajasthan will facilitate
flexibility in hiring and bring more workers under the labour legislation.
Rajasthan expects this to make it abetter investment
destination. Mishra said Indian and foreign investors were showing interest
in the state since announcement of the changes.
“The amendments are expected to create better
opportunities in the organised labour sector, which is essential for quality
employment. More investments will open up new avenues for labour,” said a senior
state government official who did not wish to be named.
Turn to Page 12 >
State expects more investment as industry cheers move
PRESIDENT OKAYS RAJASTHAN LABOUR REFORMS KICKING
OFF REFORMS
Some of the important changes to laws
INDUSTRIAL DISPUTES ACT
|Firms employing up to 300 workers can retrench or
shut shop without govt’s permission (against current limit of 100) |In case
of retrenchment, a worker should raise an objection within 3 months ( there
is no time limit at present) |Trade union can be formed only if it gets 30%
of the workers as members ( 15% condition currently)
FACTORIES ACT
|The Act will apply to factories with 40 workers, if
without electricity; and 20 workers, if with electricity ( the present
condition respectively is 20 and 10) |Complaints against an employer about
violation of this Act would not receive cognisance by a court without prior
written permission from the state govt |A provision for compounding of
offences has been added
CONTRACT LABOUR ACT
|The Act will apply to companies employing more than
50 workers ( against 20 currently) |The industries will be able to hire more
temporary workers without passing on to them the benefits contract workers
are entitled to
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Click here to read more...Turn to Page 12 >
The official said investors feared employing more than 100 workers in factories because they had to approach the government over small issues. " Investors will now concentrate on doing business rather than spending time on formalities. These moves will help workers, too, as more people will be on payrolls rather than on contract," the official added.
Official estimates show around 85 per cent of
factories in Rajasthan employ less than 100 workers. The move would generate
1.5 million additional jobs in the state, Rajasthan Chief Minister Vasundhara
Raje had said.
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