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Hitches
still on Contract Labour ACT
Sharad
all set to herald exit policy
Chandra
Shekhar
New Delhi, Jan 2: After eight meetings of the group of
ministers, spread over one-and-a-half years, the labour ministry
has finally agreed to amend the Industrial Disputes Act to permit
industries employing less than 1,000 workers to retrench workers
and close units without seeking permission from the government.
The ministry, however, has not yet agreed to amend the Contract
Labour Act to facilitate outsourcing of activities by industrial
houses.
Labour minister Sharad Yadav will shortly prepare a Cabinet
note seeking to amend the ID Act.
The GoM, however, failed to sort out the contentious issues
concerning the Contract Labour (regulations and abolition) Act.
These issues will be deliberated further at the next round of
GoM meetings slated for later this month. While the finance
ministry wants the differentiation between the core and non-core
activities, as provided in the Act, to be done away with, the
labour ministry is having reservations.
The labour ministry, however, has agreed to increase the upper
ceiling of workers entitled for protection under the Payment
of Wages Act from Rs 1,600 per month to Rs 6,500 a month. A
Cabinet note in this regard will also be prepared by the ministry
shortly.
It can be recalled that labour reforms have been moving haltingly
since the GoM was set up in April, 00. As the GoM was not getting
anywhere even after having met four times during April-May 00
and again in August 00, the Prime Minister had reconstituted
the GoM under the chairmanship of Planning Commission deputy
chairman KC Pant in October 01. Since then, the group of ministers
had met thrice and at its last meeting in December 01 had decided
to push reforms in those areas where there was at least some
semblance of convergence of views among the different ministries.
Although finance minister Yashwant Sinha, while presenting his
last Budget had assured the Lok Sabha that the then labour minister
Satyanarain Jatiya would introduce legislative changes during
that Budget session itself to amend both the ID Act and the
Contract Labour Act, the Budget session, Monsoon session and
even the Winter session ended without the government introducing
any amendments to these critical Acts.
The chapter V-B of the ID Act stipulates that employers in specified
industrial units must obtain prior approval of the appropriate
government authority for effecting lay-off, retrenchment and
closure, after following the prescribed procedure. Mr Sinha
proposed that these provisions should apply to establishments
employing not less than 1,000 workers instead of the prevailing
100 workers.
He had also proposed that the separation compensation be increased
from 15 days to 45 days for every completed year of service,
and had claimed that the enhancement of compensation would act
as deterrent on employers to take recourse to lay-off, retrenchment
and closure in a routine manner.
These arguments, however, did not find favour with Mr Jaitya.
Things, however, started moving with the change of minister
in the labour ministry and reconstitution of the GoM.
The GoM, however, could not reach a consensus on the proposed
amendments to the Contract Labour Act. Mr Sinha had proposed
to amendment section 10 of the Act which enables a contract
labourer engaged in prohibited jobs to become direct employee
of the principal employer. The amendments to the Act were proposed
with a view to facilitating outsorcing of activities without
any restrictions. It was also proposed to do away with the differentiation
between core and non-core activities, and at the same time provide
protection to labour engaged in outsourced activities in terms
of health, safety, welfare, social security etc.
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