Labour Laws overhaul soon says Union Minister

The Union Government is all set to consolidate a part of the labour laws in the country by integrating Trade Unions Act, Industrial Disputes Act and Industrial Employment (Standing Orders) Act into a single legislation.

It is being said that the new law will have an easier hire-and-fire rules and will also make it tough for workers to form unions. However, the severance pay may be increased three times to protect the interest of workers.

Speaking on the move of the Government, the Labour Minister Bandaru Dattatreya said, "Labour reforms are needed in the present context to make conducive environment for business to flourish and create harmonious atmosphere between industry and workers because our main purpose is that employability should be increased." He also emphasized that the law needs to be looked at with a new perspective and added, "For that you need to have simplification and rationalisation of laws. But that will not be at the cost of workers' interest. Workers' right will be protected. But at the same time for increasing employability, ease of doing business in necessary."

Reportedly, the major changes in the new code may be the removal of requiring an official sanction for firing up to 500 employees, while the current figure stands at 100.  While, increasing the benefits for the workmen, the government proposes to make it mandatory to pay an average salary of 45 days to workers in case of retrenchment, while at the present, it is only average salary of 15 days. The notice period for firing workers will also be increased to three months from the present one month. Moreover, workers will also get a right to object to being fired within three years.

However, the trade unions seem to be not so happy with the prospective law and are all set to call a day-long strike on September 2.Labour Minister BandaruDattatreya meanwhile has said that the Government is trying to have more consultations with the Trade Unions and tripartite consultations are on and the Prime Minister has formed a ministerial committee headed by Finance Minister ArunJaitley to look into the issues highlighted by Unions and as a result, the Bill will not be introduced in the upcoming session of Parliament.

Unions are also opposed to the Small Factories Bill which states that units employing less than 40 workers be kept out of the purview of 14 labour laws including EPF & MP Act 1951, ESI Act 1948 and Industrial Dispute Act 1947.

However, as per the Minister, "The objective behind the entire exercise is to strengthen the social security net for labourers and to ensure compliance of laws.This is to make hiring flexible and bring more workers under labour legislation.”

Making changes to law relating to strikes, the new law may ban strikes during conciliatory proceedings. It is also being proposed that mass casual leaves be considered as strikes, i.e. casual leave by more than 50 percent employees will be considered as a strike. The new law may also regulate unions by debarring outsiders from becoming office bearers of the union in the organized sector and allowing two representatives in the unorganized sector.

Reportedly, the new law will bring every employee under the ambit of minimum wages. While the industrial tribunal will continue, various arbitration forums including labour courts may well be scrapped under the labour law.