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New Delhi, May 4, 2015

After proposing an overhaul in labour laws, the Narendra Modi-led central government is considering more reforms, this time for small factories. The Cabinet is set to discuss this week a Bill to exempt the factories that employ up to 40 workers from 14 labour laws.

The government has drafted the Small Factories (Regulation of Employment and Conditions of Services) Bill, which is meant to keep small factories out of the ambit of certain major labour laws, such as the Industrial Disputes Act, the Factories Act, and the Payment of Wages Act. Besides, there will also be some relaxation in provisions of the Employees Provident Funds Act for these firms.

According to sources, the Union government plans to introduce this Bill in the current session of Parliament. This will come as a huge boost for around 70 per cent of all factories in the country - of the 175,710 operational factories in India, 125,301 employ less than 50 workers, show Annual Survey of Industries (ASI) data for 2011-12.

The Bill, if enacted in its current form, will allow businessmen to register or shut their small factories electronically. A factory will be deemed registered within 30 days of filing an application, if no action is taken in this regard. All that the employer will have to do is apply online or give a written application within 60 days of starting a factory.

There will be no inspectors; they will be replaced by "facilitators", who will act as "guide for the establishment". These facilitators will issue "improvement notices" to employers if they observe any defect.

And, in case of shutting down, the owner will have to notify to these facilitators electronically within 15 days of closing a unit. Once the facilitator is convinced about the nature of closure, and after ensuring the wages to employees have been settled, he will remove the factory from his registers and cancel the registration certificate.

The Union government had in February this year held a meeting with representatives of worker and employer groups to discuss this Bill. "The interest of the workers will always be foremost and this law is only for simplification and ease of doing business," Labour Minister Bandaru Dattatreya had said at the meeting, minutes of which have been reviewed by Business Standard.

For the welfare of workers, all social security schemes will continue to apply at small factories, too. For instance, firms with more than 20 workers will mandatorily contribute to the Employees Provident Fund Organisation (EPFO).

Also, workers will get their wages through bank accounts, provided their salary exceeds Rs 1,000 a month. The draft Bill says the employer "should take the effort" to open a zero-balance bank account, in case the worker does not have one.

Workers at small factories will be allowed to do 96 hours of overtime in a quarter, compared with the earlier provision of 50 hours under the Factories Act.

Filing annual reports will become simpler for employers, as these will now be a considerably reduced document. For this purpose, a unique labour identification number (LIN) will be allotted to each employer after registration. There also is a provision for employers to maintain their registers and records electronically.

The Bill will make it tougher for workers to go on strike. If 10 or more workers are absent from duty without proper reason and in "a concerted manner", the employer will be allowed to deduct eight days' wages of each worker.

Raising disputes related to unfair labour practices at small factories will become stringent, as these will require at least 51 per cent of workers to do so. In the Industrial Disputes Act, there is no minimum requirement to raise a dispute. Also, workers who have worked for up to 240 days in a calendar year might be retrenched without prior notice.

Recently, the Union labour ministry had proposed integrating three laws - the Trade Unions Act, the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act - into a single code for industrial relations, as part of its labour reform measures.

From India, Mumbai
Dear All,

Please find a news article on : UNIONS OPPOSE CHANGES TO LABOUR LAWS


Trade unions are up in arms over the Labour Ministry’s proposals to allow firms with up to 300 workers to retrench employees without prior permission of the government and make it tougher to form a trade union.

The proposals are part of the draft Labour Code on Industrial Relations Bill, 2015, prepared by the Labour Ministry to combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.

Central trade unions, including the BJP-backed Bharatiya Mazdoor Sangh (BMS), are planning to protest strongly against the proposals.

“We will protest against this provision under which firms will not have to take prior permission for retrenchment under draft Labour Code on Industrial Relation Bill 2015,” Bharatiya Mazdoor Sangh Zonal Organising Secretary Pawan Kumar told PTI.

At present, firms employing 100 or more workers are required to seek government’s permission for retrenchment under the Industrial Dispute Act.

“We will also oppose the proposal to make it tougher to form trade unions. Our President BN Rai will attend the tripartite consultation on the bill on May 6. The union is unanimous on opposing the government’s proposal,” he said.

At present, any seven or more members of a trade union can apply for registration of the Trade Union.

The proposed provision in draft code provides that 10 per cent of workers shall apply (be applicant) for registering a trade union.

In cases where 10 per cent of workers is less than 7, at least seven workers are required (to apply) for the purpose and where the 10 per cent of workers exceed 100, hundred workers shall be sufficient for registering the trade union.

“We have been opposing this when this was being implemented in Rajasthan. We will oppose it on May 6 meeting. They cannot make law stringent for forming trade unions,” Hind Mazdoor Sabha Secretary A D Nagapal said.

“When Rajasthan Government had sent the state bill with the provision (retrenchment) for Presidential assent, then Labour Minister Narendra Singh Tomar has assured us that it will not be done. But now they want to amend the central law, which would be be applicable to entire country,” he added.

All India Trade Union Congress Secretary DL Sachdev said, “We will strongly oppose the proposal to exempt firm with up to 300 employees from seeking permission from the government to retrench and new provisions which would discourage formation of trade unions in India.”

He suggested that government should constitute a tripartite committee with employees’ and employers’ representative on board along experts to study the bill in detail before firming up the draft bill.”

From India, Mumbai
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