Modi govt to push big labour reforms, including hire & fire norms

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Updated: May 6, 2016 7:15:37 AM

The government is firm on achieving all it can on labour reforms despite political hurdles.

Labour minister Bandaru Dattatreya told FE that two labour-related codes — one on wages and another on industrial relations — would be introduced for “discussion and passage” in the monsoon session of Parliament. (Express Photo)Labour minister Bandaru Dattatreya told FE that two labour-related codes — one on wages and another on industrial relations — would be introduced for “discussion and passage” in the monsoon session of Parliament. (Express Photo)

The government is firm on achieving all it can on labour reforms despite political hurdles. In spite of protests from unions, it is unlikely to relent on the proposal to allow units employing up to 300 to lay off workers sans government approval. It is also in no mood to withdraw proposals to make it tougher to form trade unions and bar outsiders as union leaders.

Labour minister Bandaru Dattatreya told FE that two labour-related codes — one on wages and another on industrial relations — would be introduced for “discussion and passage” in the monsoon session of Parliament. When asked about the aforementioned contentious proposals, he said: “By and large the provisions will remain the same” as in earlier drafts, hinting that moves to give more labour flexibility to the industry are afoot.

While firms employing more than 100 people now require government’s prior approval for labour retrenchment, the minimum employee strength to set up a trade union is 10. The draft code on industrial relations proposes to bar outsiders from being leaders of trade unions in organised-sector units, in what could end the practice of professional trade union leaders, seen by many as detrimental to the interests of both industry and workers.

Dattatreya said that a tripartite mechanism for the other two proposed labour codes — one on social security and another on working conditions and safety — would be completed by June and then these would also be sent for vetting by the law ministry and subsequently tabled in Parliament for passage.

Admitting that there had been delays in passing the two codes, he said, “Delays are not always in our hands. These (the codes) are lagging because these are complex subjects and we cannot push such legislation without reaching to a consensus through a tripartite mechanism.”

Asked about tightening norms for outsiders to become office bearers of trade unions, he said ideally all office-bearers of a trade union in an organisation should be from within the organisation. The proposal to restrict the number of trade unions in the unorganised sector to two would also stay.

The need to push labour reforms has become more urgent in view of the unsatisfactory job growth in recent quarters, analysts said. As reported by FE earlier, new jobs in eight labour-intensive industries fell to a six-year low in January-October 2015. During this period, just 1.55 lakh new jobs were created while the new jobs in the corresponding period of the previous two years were almost double this level.

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