Rajasthan's Labor Reforms Approved by President
President Pranab Mukherjee has given his assent to Rajasthan's amendments to three labor laws, paving the way for the first set of labor reforms in the country. Among the major changes, the Industrial Disputes Act will now allow companies employing up to 300 staff members to lay off workers or close down without needing the government's prior approval. Previously, this was only applicable to companies with up to 100 employees.
"The government of Rajasthan received assent papers on November 7 for three labor law amendment Bills related to the Industrial Disputes Act, 1947, the Contract Labor Act, 1970, and the Factories Act, 1947," Rajat Mishra, Rajasthan's labor secretary, told Business Standard.
Mishra stated that these amendments aim to create employment opportunities through greater investments and ease the conduct of business in the state.
Legislative Process and Impact
The Rajasthan Assembly passed Bills amending the three laws, as well as the Apprenticeship Act, three months ago. Since these laws fall under the Constitution's concurrent list, where both the Centre and states can legislate with the central law prevailing in case of a difference, they needed the President's assent before becoming law.
"This will provide significant relief to the industry, especially small-scale industries. We hope the scope of such reforms will expand in the near future. This will also play a major role in setting the direction for labor reforms," said Chandrajit Banerjee, director-general of the Confederation of Indian Industry (CII). Industry chambers have demanded similar changes at the Centre as well.
Other states are expected to follow Rajasthan, with the Union Labor Minister Narendra Singh Tomar indicating that states can amend labor laws to suit local conditions. Madhya Pradesh's Cabinet has approved amendments on similar lines.
Economic Implications and Future Prospects
The steps taken by Rajasthan will facilitate flexibility in hiring and bring more workers under labor legislation. Rajasthan expects this to enhance its appeal as an investment destination. Mishra mentioned that both Indian and foreign investors have shown interest in the state since the announcement of these changes.
"The amendments are expected to create better opportunities in the organized labor sector, which is essential for quality employment. More investments will open up new avenues for labor," said a senior state government official who wished to remain anonymous.
The official noted that investors previously hesitated to employ more than 100 workers in factories due to the need to approach the government over minor issues. "Investors will now focus on business rather than spending time on formalities. These moves will also benefit workers, as more people will be on payrolls rather than on contract," the official added.
Official estimates indicate that around 85 percent of factories in Rajasthan employ fewer than 100 workers. The move is expected to generate 1.5 million additional jobs in the state, according to Rajasthan Chief Minister Vasundhara Raje.
Source:
President okays Rajasthan labor reforms: Firms with 300 workers need no govt nod to sack | Business Standard News
From India, Malappuram
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1446President Pranab Mukherjee has given his assent to Rajasthan's amendments to three labor laws, paving the way for the first set of labor reforms in the country. Among the major changes, the Industrial Disputes Act will now allow companies employing up to 300 staff members to lay off workers or close down without needing the government's prior approval. Previously, this was only applicable to companies with up to 100 employees.
"The government of Rajasthan received assent papers on November 7 for three labor law amendment Bills related to the Industrial Disputes Act, 1947, the Contract Labor Act, 1970, and the Factories Act, 1947," Rajat Mishra, Rajasthan's labor secretary, told Business Standard.
Mishra stated that these amendments aim to create employment opportunities through greater investments and ease the conduct of business in the state.
Legislative Process and Impact
The Rajasthan Assembly passed Bills amending the three laws, as well as the Apprenticeship Act, three months ago. Since these laws fall under the Constitution's concurrent list, where both the Centre and states can legislate with the central law prevailing in case of a difference, they needed the President's assent before becoming law.
"This will provide significant relief to the industry, especially small-scale industries. We hope the scope of such reforms will expand in the near future. This will also play a major role in setting the direction for labor reforms," said Chandrajit Banerjee, director-general of the Confederation of Indian Industry (CII). Industry chambers have demanded similar changes at the Centre as well.
Other states are expected to follow Rajasthan, with the Union Labor Minister Narendra Singh Tomar indicating that states can amend labor laws to suit local conditions. Madhya Pradesh's Cabinet has approved amendments on similar lines.
Economic Implications and Future Prospects
The steps taken by Rajasthan will facilitate flexibility in hiring and bring more workers under labor legislation. Rajasthan expects this to enhance its appeal as an investment destination. Mishra mentioned that both Indian and foreign investors have shown interest in the state since the announcement of these changes.
"The amendments are expected to create better opportunities in the organized labor sector, which is essential for quality employment. More investments will open up new avenues for labor," said a senior state government official who wished to remain anonymous.
The official noted that investors previously hesitated to employ more than 100 workers in factories due to the need to approach the government over minor issues. "Investors will now focus on business rather than spending time on formalities. These moves will also benefit workers, as more people will be on payrolls rather than on contract," the official added.
Official estimates indicate that around 85 percent of factories in Rajasthan employ fewer than 100 workers. The move is expected to generate 1.5 million additional jobs in the state, according to Rajasthan Chief Minister Vasundhara Raje.
Source:
President okays Rajasthan labor reforms: Firms with 300 workers need no govt nod to sack | Business Standard News
From India, Malappuram
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Advocating for a Hire-and-Fire Policy
Congratulations to those who are advocating a hire-and-fire policy for workers/employees. It seems that the Central Government is also working on a similar philosophy by drafting the Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014. It is expected that the said bill will be introduced in the coming session of the honorable parliament.
Future of Job Security and Social Benefits
In the coming years, in the industrial/labor sector, perhaps the provisions of job security, social security, and social health insurance for the working force will be a matter of the past and a dream for the coming generations. However, every such facility will be available on a contractual basis, on a commercial basis, and not as a legal right or as a policy of the State.
From India, Noida
Acknowledge(0)Amend(0)
Congratulations to those who are advocating a hire-and-fire policy for workers/employees. It seems that the Central Government is also working on a similar philosophy by drafting the Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014. It is expected that the said bill will be introduced in the coming session of the honorable parliament.
Future of Job Security and Social Benefits
In the coming years, in the industrial/labor sector, perhaps the provisions of job security, social security, and social health insurance for the working force will be a matter of the past and a dream for the coming generations. However, every such facility will be available on a contractual basis, on a commercial basis, and not as a legal right or as a policy of the State.
From India, Noida
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Industrial Employment Standing Oder Act.doc
Industrial Employment Standing Orders Act 1946.pdf