In what could be called a major step towards reforming the country’s archaic labour laws, the government has started discussion on amending the Industrial Dispute Act to allow easier retrenchment of workers in National Investment Manufacturing Zones (NIMZs).
?Tripartite consultations are being held for amendment in the Industrial Disputes Act of 1947 in regard to NIMZ,” minister of state for labour Vishnu Deo Sai said in a written reply to Lok Sabha to a query whether the government has any proposal to amend the restrictive labour law for easier retrenchment of workers in NIMZs. He did not give details of what changes are being contemplated.
At present, the ID Act mandates companies employing more than 100 workers to go through a cumbersome process of seeking government’s permission for closing down a factory.
While the NDA government under Atal Behari Vajpayee had considered amendment in the ID Act to raise the threshold limit to 300 workers from 100 for a company to seek government permission, it was never carried out. The UPA government junked the proposal outright fearing political backlash.
However, the National Manufacturing Policy, which was drawn up by the previous UPA government in 2011, had proposed some flexibility in labour laws to help in increasing the share of manufacturing to GDP to 25% from the present 16% and creation of 100 million by 2022.
The NMP had laid down major changes needed in rules and regulations for simple and speedy exit mechanism for closure of sick units while protecting labour interests through adequate compensation from a sinking fund and redeployment of retrenched workers to other NIMZs.
The Modi government has already initiated the process of reviewing all labour laws including the Factories Act, Minimum Wages Act and Apprenticeship Act apart from easing procedures and cutting down on unnecessary inspections.