Prime Minister Manmohan Singh?s Left-free second innings provides the perfect opportunity to bring age-old labour legislations that he has often lamented about, in sync with the industrial liberalisation he kicked off as finance minister in 1991.

An expert group entrusted by the PM with the task of formulating a blueprint for reforming the myriad labour laws as far back as 2005, has finally submitted its report.

The blueprint for labour law reforms argues to expand the focus of reforms beyond easier ?hire and fire? norms and advocates clubbing the 43 central labour laws into a simpler National Labour Code. The report, drafted by noted labour expert TS Papola, was delivered to the PM on April 30.

With the economy in a downturn and industrial output suffering, embarking on labour law reforms assumes even more importance. The finance ministry?s chief economic advisor Arvind Virmani, in a research paper for the department of economic affairs, has stressed that factory output is being crippled in the absence of labour reforms.

What will be music to industry?s ears is that the expert group has backed doing away with the need to take prior government permission to retrench workers under Chapter VB of the Industrial Disputes Act of 1947. Stressing that the retrenchment compensation paid to workers in India is among the lowest in the world, the report has called for increasing it from 15 days of pay for every year of completed service to 45 days. Incidentally, UPA?s last labour minister Oscar Fernandes had called for this compensation to be raised to 75 days.

Calling for disputes regarding retrenchment decisions to be resolved through collective bargaining instead of time-consuming conciliation procedures, the report has also urged the Centre to make Chapter VA, which requires employers with 50 or more workers to serve a month?s notice before retrenching workers and compensate workers, applicable to all establishments.

Along with easing retrenchment provisions, the report has said that the experience of the unemployment allowance scheme launched by the Employees? State Insurance Corporation (ESIC) in 2005 can be used to convert the employers? liability to pay retrenchment compensation into ?an insurance-based social security benefit.?

Incidentally, the ESIC scheme had been recently amended to increase the period for which unemployment benefits are paid from six months to 1 year. But the benefit is only available to those who have contributed to ESIC for at least five years, which the expert group has suggested should be reduced to one year.

Mooting a holistic approach to reforms, the report has suggested creation of a single labour law code that will bring about uniformity in definitions of basic terms. At present, there are 43 central labour laws with wide variations in coverage and definitions of common terms like ?worker,? ?wages? and ?factory??with the definition alone leading to extensive litigations. For instance, all workmen are employees but not all employees are workmen.

?Such multiplicity of labour laws has emerged because each piece of legislation was enacted as and when the need for the regulation of some segment or an aspect of the labour market arose. An integrated view does not appear to have been taken. To avoid such confusion, the commission has recommended a National Labour Code that will be used across the country,? said Savitur Prasad, joint secretary, National Commission for Enterprises in the Unorganised Sector. The PM had asked the commission to delve into organized sector labour laws separately.

Seeking amendments to the Contract Labour (Regulation and Abolition) Act, 1970, the expert group has called for a more pragmatic method to identify activities where contract workers cannot be employed. The commission has also suggested social security benefits to contract labourers, for which the principal employer should contribute.

Citing the case put out by various industry associations to reduce the number of inspectors on labour issues, the commission said there have always been ?legitimate complaints? on the misuse of law for harassment, bribery and corruption. ?Several states have already done away with regular inspections. They have instead made inspection necessary only if a complaint is received and that too only after getting prior permission from civil authorities,? an official said.

The commission noted that a bill to amend the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act 1988, which seeks to reduce the number of returns, registers and records submitted to the government, is already pending before Parliament. The experts moot extending the amendments to all establishments.

Incidentally, the Bill was to be passed by the Rajya Sabha in its last session, but then labour minister Oscar Fernandes failed to table it fearing opposition from Left Front MPs. Commenting on the expert group?s recommendations, a senior labour ministry official said, ?The report has some sound ideas which we hope will be debated actively and taken to their logical conclusion. In many areas, states have to become more serious about enforcing existing laws.?

Apart from big-ticket labour law reforms, several existing initiatives of the labour ministry need a fresh push from the new minister. These include amendments to the Factories Act of 1966 to allow women workers to work at night; changes to the Mines Safety Act; extending social security cover under the Employees? Provident Fund Act to firms hiring ten employees or more from the present limit of 20 employees. A first-ever National Employment Policy also awaits Cabinet clearance.

On the agenda

•Rationalise and consolidate labour laws. Formulate a National Labour Code to bring laws into cognate groups such as wages, labour relations, working conditions and social security

•Amend the Contract Labour (Regulation and Abolition) Act, to make all labour laws relating to working conditions and social security applicable for contract workers. Clearly specify ?core? or ?perennial? nature of work and formulate a ?more rational? method to identify activities that require fluctuating number of workers

•To curb inspector raj, reduce the number of laws and corresponding authorities. Extend the proposed amendments to the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act 1988, to all establishments. The amendments, pending in Parliament, sharply reduce the number of records to be submitted by employers to the government

•Allow retrenchment under the Industrial Disputes Act of 1947, without prior government permission, but raise compensation from 15 days of salary for every year of service to 45 days. Create an unemployment insurance net, that could later substitute employers? need to pay retrenchment compensation

•Greater reliance on collective bargaining process to resolve labour disputes in order to lessen the burden on labour judiciary. With more than 18,000 cases pending before industrial tribunals-cum-labour courts, there is a need to strengthen labour judiciary and encourage Lok Adalats to reduce backlog

•Resolve disputes on notices about changes in working conditions or retrenchment by collective bargaining instead of time-consuming conciliation proceedings