Ever since Rajasthan proposed amendments to its labour laws that would significantly ease restrictions on industry, making it simpler for workers to be fired and harder to unionise, there have been concerns that the central government will go down the same road. Though the government seemed more inclined to allow other states to replicate Rajasthan’s measures, some had expressed hope – while others trepidation – that New Delhi might look to reshape India’s labour market from the centre, as it had promised in its manifesto.
On Wednesday, the Cabinet cleared a number of amendments to three laws governing industry and labour in the country, prompting the media to call it an overhaul of the labour market that would make it easier to do business. However, far from endorsing the Rajasthan reforms – which were passed by the state government on Thursday – the amendments that the Cabinet has approved and expects to table in Parliament in this session are primarily aimed at improving worker welfare.
Barring a few changes that hope to reduce red tape, most of the measures proposed are tilted towards workers, suggesting, at the least, that Prime Minister Narendra Modi’s intention is to eschew labour reform controversy in at least the early part of his tenure.
This was reflected in the tone of the ministry as well: “The Government is of the opinion that for inclusive growth, conducive atmosphere for industrial growth as well as protection of labour force from exploitation and taking care of their welfare is essential,” wrote minister of state for labour and employment Vishnu Deo Sai, in a reply in Parliament.
Worker welfare
The changes come in the form of amendments to three acts, the Factories Act, 1948, the Apprenticeship Act, 1961 and the Labour Laws Act, 1988.
The changes to the Factories Act are the most comprehensive, introducing up to 54 alterations to the law, the majority of which update portions of the current legislation. The amendments involve making alterations as simple as replacing the word “horsepower” with “kilowatts”, to lowering the threshold after which a company has to ensure the provision of restrooms and lunchrooms from 250 or more workers to just 100.
Other provisions are also welfare-focused, such as prohibiting companies from employing pregnant women or people with disabilities near heavy machinery, and making it mandatory for companies to provide annual leave with wages to employees who have worked for 90 days, as opposed to the 240 days that were required earlier.
The proposed amendments to the other two pieces of legislation are largely focused on red tape, either expanding the focus of previously restricted laws or lowering reporting requirements. The changes to the Apprenticeship Act, for example, are expected to be quite significant, because they substantially expand the list of trades that come under it. It also drops a provision that would require heads of companies to be imprisoned in case they don’t fully implement the Apprenticeship Act.
Future indications
Mixed in among the welfare-focused provisions, however, are a few proposed changes that could have far-reaching effects.
For one, in the Labour Laws Act, the government redefines small industries to cover those having up to 40 workers, as opposed to 19 in the current law. For the moment, this changes the requirement of those companies to maintain a certain number of registers that can be inspected by the labour department, but the indication was enough for the Bharatiya Mazdoor Sangh – a Rashtriya Swayamsevak Sangh affiliated trade union – to oppose it, saying it would go against the welfare of workers.
State to the centre
The amendments to the Factories Act also include a change that shifts a certain amount of power from the states to the centre. The change, which the government justified based on a conference of state labour ministers that was held back in 1988, amends the law in such a way that allows the central government to make rules to govern the Factories Act, which was primarily a state concern until then.
Similarly, various other provisions across all three of the labour laws slightly ease the legislation governing owners of factories, whether it is removing draconian provisions that govern whether they can be arrested for petty infractions, or serious issues of how they handle the welfare of employed workers.
While the government has made it clear that it doesn’t intend to directly take on either trade unions or general pro-labour stakeholders, even though it has managed to anger them to some extent, the overall intent of changing the business atmosphere to benefit industry is impossible to ignore.
On Wednesday, the Cabinet cleared a number of amendments to three laws governing industry and labour in the country, prompting the media to call it an overhaul of the labour market that would make it easier to do business. However, far from endorsing the Rajasthan reforms – which were passed by the state government on Thursday – the amendments that the Cabinet has approved and expects to table in Parliament in this session are primarily aimed at improving worker welfare.
Barring a few changes that hope to reduce red tape, most of the measures proposed are tilted towards workers, suggesting, at the least, that Prime Minister Narendra Modi’s intention is to eschew labour reform controversy in at least the early part of his tenure.
This was reflected in the tone of the ministry as well: “The Government is of the opinion that for inclusive growth, conducive atmosphere for industrial growth as well as protection of labour force from exploitation and taking care of their welfare is essential,” wrote minister of state for labour and employment Vishnu Deo Sai, in a reply in Parliament.
Worker welfare
The changes come in the form of amendments to three acts, the Factories Act, 1948, the Apprenticeship Act, 1961 and the Labour Laws Act, 1988.
The changes to the Factories Act are the most comprehensive, introducing up to 54 alterations to the law, the majority of which update portions of the current legislation. The amendments involve making alterations as simple as replacing the word “horsepower” with “kilowatts”, to lowering the threshold after which a company has to ensure the provision of restrooms and lunchrooms from 250 or more workers to just 100.
Other provisions are also welfare-focused, such as prohibiting companies from employing pregnant women or people with disabilities near heavy machinery, and making it mandatory for companies to provide annual leave with wages to employees who have worked for 90 days, as opposed to the 240 days that were required earlier.
The proposed amendments to the other two pieces of legislation are largely focused on red tape, either expanding the focus of previously restricted laws or lowering reporting requirements. The changes to the Apprenticeship Act, for example, are expected to be quite significant, because they substantially expand the list of trades that come under it. It also drops a provision that would require heads of companies to be imprisoned in case they don’t fully implement the Apprenticeship Act.
Future indications
Mixed in among the welfare-focused provisions, however, are a few proposed changes that could have far-reaching effects.
For one, in the Labour Laws Act, the government redefines small industries to cover those having up to 40 workers, as opposed to 19 in the current law. For the moment, this changes the requirement of those companies to maintain a certain number of registers that can be inspected by the labour department, but the indication was enough for the Bharatiya Mazdoor Sangh – a Rashtriya Swayamsevak Sangh affiliated trade union – to oppose it, saying it would go against the welfare of workers.
State to the centre
The amendments to the Factories Act also include a change that shifts a certain amount of power from the states to the centre. The change, which the government justified based on a conference of state labour ministers that was held back in 1988, amends the law in such a way that allows the central government to make rules to govern the Factories Act, which was primarily a state concern until then.
Similarly, various other provisions across all three of the labour laws slightly ease the legislation governing owners of factories, whether it is removing draconian provisions that govern whether they can be arrested for petty infractions, or serious issues of how they handle the welfare of employed workers.
While the government has made it clear that it doesn’t intend to directly take on either trade unions or general pro-labour stakeholders, even though it has managed to anger them to some extent, the overall intent of changing the business atmosphere to benefit industry is impossible to ignore.
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