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  1. Labour reforms: How Narendra Modi govt is looking to empower companies with up to 300 workers

Labour reforms: How Narendra Modi govt is looking to empower companies with up to 300 workers

Even though it hasn’t yet got the Opposition to agree to the agenda, at least one of the two important Bills in this regard will be pressed in the ongoing Budget session.

By: | New Delhi | Published: February 8, 2017 6:59 AM
Labour minister Bandaru Dattatreya. Labour minister Bandaru Dattatreya.

The Modi government is fast-tracking the legislative part of labour reforms, long held up due to political reasons. Even though it hasn’t yet got the Opposition to agree to the agenda, at least one of the two important Bills in this regard will be pressed in the ongoing Budget session. If things go as per the Centre’s plan, establishments employing up to 300 will soon have the right to lay off workers without government approval and outsiders — read professional politicians — will be barred from leading trade unions in the organised sector. Currently, only smaller units employing up to 100 people can lay off workers sans government nod.

Labour minister Bandaru Dattatreya told FE: “We are going ahead… The drafts of both the wage code and the industrial relations (IR) code have been prepared. Presentations to different ministries have been made and a tripartite committee meeting has been held. In the second leg of the Budget session, we will definitely introduce the wage code. Although we are simultaneously working on the IR code, it may come up only in the next session.”

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The proposed reforms are, however, not just industry-friendly — they also tend to make the workers’ rights more robust. For instance, the wage code will make national minimum wage mandatory for all establishments. Currently, the wage thresholds prescribed by the Centre are not followed by all states. In the proposed regime, while the states will have the power to fix the minimum wages, these can’t be below the national threshold. All four wage-related central Acts — the Minimum Wages Act, 1948, Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976 — will be amalgamated under the proposed comprehensive wage code. The IR code also proposes to bar strikes without 14 days’ notice.

However, an inter-ministerial meeting convened on Tuesday to take a call on introducing the codes in Parliament was postponed due to finance minister Arun Jaitley’s busy schedule. Dattatreya said that the meeting would take place in a day or two. A fresh momentum has been imparted to passage of the codes after the go-ahead from the finance minister, a source said.

The Modi government feels that labour reforms at the national and state levels are integral to improving India’s unimpressive ease of doing business rank and accomplishing the objective of making India a global manufacturing hub.

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