With the political climate cooling in favour of the Manmohan Singh government?s reform agenda, work is set to begin on fixing one of the Prime Minister?s pet laments in recent times?India?s archaic labour laws. Nearly three years after the PM assigned the task of framinga blueprint for organised sector labour law reforms to the National Commission for Enterprises in the Unorganised Sector (NCEUS), it has finally completed its work.
?The rigidities of (our) labour legislations have created a situation where we have industry but it does not grow at a fast enough pace to create lot more jobs for our young. Problems of labour rigidity, labour flexibility? these are still hurdles in India realising its chosen destiny,? Singh had said in an extempore speech recently.
In November 2005, the ministry of labour had mooted two reform measures that could have the maximum impact on creating employment. The first was changes in Chapter V B of the Industrial Disputes Act, 1947, that sets for industries stringent conditions for retrenching workers and elaborate procedures for winding up units. The second?a change in Section 10 of the Contract Labour Act that empowers the government to notify the type of jobs contract labourers can?t be used for.
At the time, the PM had asked NCEUS chairman Arjun Sengupta to examine the entire basket of 43 central labour laws and suggest changes. Sengupta told FE, ?The report is complete. We will start consulting the labour unions in a few days? time after the political scene cools down.?
Apart from an easier ?hire and fire? policy, the report is expected to recommend a ?Labour law code? by simplifying and minimising the 43 labour laws. Also expected is a move away from the ?inspector raj? to a regime where most compliance is voluntary. ?We are going to recommend a substantial increase in flexibility but without affecting workers? rights,? Sengupta had said.
While big-ticket labour law reforms have been off the agenda, thanks to the UPA?s communist fetters in the last four years, the Left parties had even scuttled modest changes to a 1988 law introduced in the Rajya Sabha in 2005. The Labour Laws (Exemption From Furnishing Returns And Maintaining Registers By Certain Establishments) Amendment Bill 2005 was aimed at simplifying labour law compliance for small and very small firms by allowing them to electronically file returns.
The Left opposed the Bill though it was in line with the NCMP that promised the small-scale industry that has suffered extensively in recent years ?will be freed from the inspector raj.?
