Key labour reforms stuck on Cabinet nod to code

By: | Published: March 29, 2016 1:28 AM

The key labour reform proposals closely linked to Prime Minister Narendra Modi’s ‘Make in India’ initiative are not likely to be implemented anytime soon, sources in the labour ministry said.

The key labour reform proposals closely linked to Prime Minister Narendra Modi’s ‘Make in India’ initiative are not likely to be implemented anytime soon, sources in the labour ministry said.

This is because the code on industrial relations, which is considered the main law on which the other labour reforms are dependent, is yet to be sent for approval of the Cabinet. It can be tabled in Parliament only after the Cabinet’s nod.

The code on industrial relations makes it tougher to form trade unions and prohibits politicians from becoming union leaders in organised sector establishments. It also proposes to allow employers with up to 300 workers to go for retrenchment, lay-off and closure without government permission from the current 100 employees.

Labour ministry officials remain tightlipped when asked whether the code on industrial relations has any chance of being put up for passage in the second leg of the Budget session that starts on April 25.

The code on wages, which would allow states to fix minimum wages and make national wage mandatory, however, has been sent for the Cabinet’s approval, sources said, adding that the Small Factories Bill has also been sent for the nod of the government’s highest decision-making body.

The Cabinet note for Employees’ Provident Fund & Miscellaneous Provisions Bill is yet to be circulated and is still being vetted by the law ministry. The EPF Bill seeks to provide subscribers of the retirement fund body an option of choosing between EPF and the New Pension System (NPS).

In the winter session, the Payment of Bonus (Amendment) Bill, 2015 was passed that enhances pay eligibility limit of an employee for bonus to `21,000 per month from `10,000, and the monthly bonus calculation ceiling to `7,000 per month from `3,500 a month earlier.

Immediately after taking over, the new government had itemised labour reforms as an important agenda. It decided
to do away with some of the 44 extant central labour laws or merge them, with just four codes aimed at ensuring ease of doing business, where India ranks poorly in the world.

The proposed reforms are tipped to be the biggest labour reforms since Independence.

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